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Insurance Glossary P





Package policy

Any combination of insuring agreements that combines property and casualty coverages. Homeowners, business owners, and garage policies are examples. 


A specific risk or cause of loss, such as fire, windstorm, flood or theft.  A named-peril policy covers only the risks named in the policy, while an all-risk policy covers all causes of loss except those specifically excluded. 

Personal injury protection (PIP)

An extension of car insurance available in some U.S. states that covers medical expenses, and in some cases, lost wages and other damages.  PIP is sometimes referred to as  “no fault” coverage, because the statutes enacting it are generally known as no-fault laws, and PIP is designed to be paid without regard to “fault,” or more properly, legal liability. 

Personal liability insurance

Insurance for individuals or members of a household offering protection against claims by third parties. (outsiders) alleging bodily injury or property damage due to negligence. 

Personal lines

Personal insurance for individual and family needs, such as home and auto. 

Policy and endorsements

The contract of insurance that details the coverages, exclusions, conditions, and loss settlement of a claim.  Endorsements amend the policy, either adding or restricting coverage outlined in the policy.


The price an insurance company charges for coverage, based on many different factors, including past loss history.  Prices vary from company to company.

Products and completed operations liability

The liability exposure of the manufacturer whose malfunctioning products may cause injury or property damage or of the contractors whose failed structures or projects may do the same. Coverage of the exposure is a feature of the commercial general liability policy. The insurance does not in any way constitute a guarantee of either the insured’s product or work. Contrast with "premises and operations liability." 

Professional liability

A form of errors and omissions insurance, (sometimes called "malpractice" coverage of errors alleged against those in the healing and legal professions). Arbitrarily it seems, "error and omissions" is the term applied most often to insurance covering liability for mistakes in matters affecting property, i.e., coverage for "Insurance Agents E&O," "Architects E&O while "professional liability" is used in reference to coverages such as "Druggists Professional Liability," Physicians and Surgeons Professional Liability," and "Lawyers Professional Liability."

Proximate cause

That event which, in an unbroken sequence, results in direct physical loss under an insurance policy. For example, wind is the proximate cause of loss when a windstorm blows out a window that in turn topples a lit candle that sets fire to a structure and burns it down.

Pure risk

The only consideration is the possibility of loss. Contrast with "speculative risk."

Products-Completed operations hazard

Refers to bodily injury and property damage that occur somewhere other than the insured’s premises, and involve the insured’s products or work, subject to the limitations and parameters specified in the Commercial General Liability coverage forms. 

Property Damage

In the Commercial General Liability coverage forms, refers to physical damage to tangible property and to loss of use tangible property, whether or not physically damaged. 


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