Agent: Agent is a licensed individual or organization that is authorized to sell as well as service insurance policies for an insurance company.
Agreed Medical Examiner (AME): Agreed Medical Examiner is a physician who is responsible for assessing any disputed medical-legal issues. This physician is maybe selected jointly by the parties in cases where an attorney represents the injured employee.
Binder: Binder refers to the short term agreement that provides a temporary insurance coverage until the policy can be delivered or issued.
Broker: A person or an organization which is responsible for selling and servicing the insurance policies on behalf of you is termed as broker.
Broker-agent: Broker-agent is an individual who has the license to operate as an agent to represent one or multiple insurers. S/he also works as a broker who deals with one or more insurers on behalf of you, representing you interests.
Cancellation: Termination of an in-force insurance contract before it reaches the normal expiration date is termed as “cancellation”.
Claim: Claim refers to the notice that an insurance company receives regarding a loss that has taken place which may fulfill the requirements to get covered according to the terms and conditions of the policy.
Claim Adjuster: Claim adjuster is an individual who assess the damage caused by a covered loss and calculates the amount that is required to be paid under the terms of the policy.
Commercial Lines: Commercial lines represent the insurance coverages provided for the business organizations, commercial institutions and professional organizations (as contrasted with the personal insurance).
Commission: The part of a policy premium that an agent receives from the insurance company as the compensation for his/her service is called commission.
Conditions: Conditions refer to the part of an insurance contract that describes the rights as well as duties of both the insured and insurer.
Consequential Bodily Injury: Under some special situations, a work related wound can lead towards another injury that is not related to work in case of Workers Compensation- in such conditions, this term is used. (you may check out some other terms like: Loss of Consortium, Dual Capacity and Third Party for more relevant information).
Coverage: The protection that is offered under the insurance policy is termed as “coverage”.
Declarations (DEC) Page: Declarations page is normally the first page of an insurance policy that includes the complete legal name of the insurance company, the policy number, the payable premium, effective as well as expiration dates, the amount and types of coverage and deductibles.
Deductible: Deductible refers to the amount of loss that is required to be paid by an insured before the benefits under the insurance policy becomes payable.
Dual capacity: as far as Workers Compensation is taken under consideration, an employer can be accountable to a worker/employee in two ways if the employee gets physically injured while s/he is on duty by using a product or service produced by the employer. In that case first of all, the employee is eligible to receive the benefits of the Workers Compensation and secondly, s/he may sue the employer for his/her defective product or service which led to that injury.
Earned Premium: A certain part of the policy premium that is paid by the insured which has been allocated to the loss experience, expenses and profit year to date of the insurance company is called “earned premium”.
Endorsement: Endorsement is a written agreement that modifies an insurance policy through including or deducting coverage.
Effective Date: Effective date is the date when an insurance policy starts or becomes effective.
Exclusion: Exclusion is a contractual provision under an insurance policy which restricts the coverage for certain individuals, locations, perils (risks) or property.
Experience Modification: Alteration of the premium from the use of experience refers to “Experience Modification”. The past loss experience of the insured (where generally the last three years are taken under consideration) is reflected through the experience rating plans which apply the experience in order to modify and determine the premium for the current policy year.
Expiration Date: Expiration Date is the date mentioned in an insurance policy when the coverage gets terminated.
First Party: First party is the insured or policyholder in an insurance contract.
Flat Cancellation: Flat cancellation is the cancellation which occurs on the policy effective date. In such cases, other charges (like the service charge) may apply although no premium charge will be applicable.
Fraud: A deceptive act done by an individual(s) deliberately in order to gain illegal or unfair advantage (which usually involves monetary gains) is termed as “fraud”.
Frequency: Frequency refers to the number of times a loss takes place.
Hazard: An event that enhances the likelihood or potential severity of a loss is termed as “hazard”.
Indemnity: Usually the term “indemnity” refers to the compensation for a loss. As far as a property and casualty contract is taken under consideration, the goal is to secure the same sort of financial condition for the insured after the occurrence of a loss that s/he enjoyed before the loss took place.
Independent Adjuster: Independent adjuster can be an individual or an organization that operates on the basis of contracts offering claim adjustment services to different insurers.
Insurance: The method or process through which an individual, business or organization can shift their risk(s) to an insurance company for which that individual, business or organization needs to pay a certain premium to the company. Under this system, the insurance company pledges its commitment to be responsible to cover the losses.
Insured: The policyholder(s) who are eligible to receive the coverage from an insurance company under the insurance policy is known as the insured.
Insurer: A company that offers insurance and agrees to cover losses and offers covered benefits is known as an insurer.
Judgment Rating: Judgment rating refers to the modification of the rating (either by decreasing or increasing) which is done on the basis of the experience, best judgment and analysis of an underwriter in classifying as well as underwriting a particular kind of risk.
Lapse: Lapse refers to the cancellation or termination of a policy in case of property and casualty insurance because of the failure to pay the premium within the due time.
Liability Insurance: Liability insurance provides the necessary coverage for the legal liability of a policyholder which occurs due to the injuries of other people or damages to their property.
License: A certificate that CDI issues to an agent, broker, broker-agent or insurer in order to give them the legitimacy to conduct insurance business is known as “license”.
Limits of Insurance: Limits of insurance refers to the highest amount of benefits that an insurance company agrees to pay for a loss or damage.
Loss of Consortium: Loss of Consortium refers to that situation where in case of a bodily injury claim (which includes the Workers Compensation claims too) a spouse argues that the physical injury suffered by his/her partner deprives them from natural affection or spousal duty, assistance as well as the companionship of the said spouse.
Managerial General Agent (MGA): Managerial General Agent is an individual who gets appointed by an insurance company with the authorization to manage all or partial business activities of the insurer. The responsibilities of a Managerial General Agent may include: appointing and supervising other agents, dealing with the marketing, policy insurance, premium collecting as well as underwriting, dealing with reinsurance related negotiation, payments for claims and so on.
Material Misrepresentation: Material Misrepresentation refers to the factual falsification which has been conducted in such a way that if the truth was revealed to the insurance company during the time of the issuance of a policy, the company would refuse to insure the risk. An insurance company can cancel a contract if it finds any material misrepresentation in case of a policy.
Misquote: Misquote refers to the estimate of an insurance premium which is not correct.
Nonpayment of Premium: If a policyholder fails to make payment for the premium on a policy or pay the installment premium payment that is due on a policy, then it will be called as nonpayment of premium.
Nonrenewal: Nonrenewal refers to the termination of an insurance policy on its usual expiration date.
Occupational Accident: If an employee or worker suffers a work-related accident and gets injured because of this, then that accident will be termed as occupational accident.
Occupational Disease: Occupational disease refers to the illness suffered by an employee or worker due to job-related exposures or conditions.
Occupational Hazard: A certain condition of an occupation and the surrounding work environment which enhances the peril of illness, accident or death is called occupational hazard.
Occurrence: The liability insurance policy which covers the claims that arises out of occurrences that takes place during the policy period (regardless of the time when the claim was filed) is known as occurrence.
Permanent Disability Rating Schedule: Permanent Disability Rating Schedule is a schedule that is used to find out an injured worker’s percentage of permanent disability and modify it.
Personal Line: As contrasted with the commercial lines, the personal line is the insurance that is written on an individual’s (or on more than one individual’s) private and real property in order to include such policies as personal auto insurance and homeowners insurance.
Policy: Policy is the contract that includes the rights as well as the duties of both the insurance company and the insured.
Premium: Premium is a type of monetary payment that is made by an insured to the insurance company in return of a contract that indemnifies the insured against potential loss or damage. The insured makes this payment in order to keep the insurance policy in effect.
Producer: Individuals like agents, brokers, broker-agents and solicitors are referred as producer in the insurance industry.
Pro Rata Cancellation: If an insurance company returns the unearned premium to the policyholder after the policy being cancelled, then it will be termed as Pro Rata Cancellation. The returned premium is that part of the premium for rest of the time period that the policy will not be in effect.
Provisions: Provisions refers to the statement of policy conditions included in the insurance policy.
Qualified Medical Evaluator (QME): A Qualified Medical Evaluator or in short QME is appointed and regulated by the DWC Medical Unit. A QME is responsible for assessing the permanent impairment and limitations of an injured employee and conducts evaluation of a wide range of issues involving medical disputes. In many cases you will find the QME in action for conducting a separate medical evaluation where the opinion of the treating physician is disputed.
Quotation: Quotation is the estimated cost of insurance which is calculated based on the information that is supplied to the agent, broker, broker-agent or the insurance company.
Recision (or Recession): Recision is the termination of an insurance policy back to the date when it came in effect. In such cases, all premium that was charged has to be retuned.
Regulations: The CDI established requirements CDI which implements the laws that the legislature has passed falls under the term “regulations”. It is to be mentioned that the regulations needs to go through a public comment process and also needs to get the approval from the state Office of Administrative Law.
Reinstatement: The restoration of a canceled or lapsed policy is known as reinstatement.
Renewal: If a policyholder continues to go on with an exiting insurance policy (offer of renewal) into a new term with the same insurance company that offered that policy, then it will be referred as renewal.
Scheduled Rating: Schedule rating is the process through which the price for property and liability insurance is determined. Under this system, debits and credits are used in order to modify a base rate which is determined by special characteristics of the risk exposure. Considering the fact that actuarial experience shows a direct connection between specific physical characteristics and possibility of loss, the insurers develop the Schedule Rating. In most cases, the schedule rating plans are required to be filed with CDI in order to get the approval.
Second Party: The insurance company involved in the contract is known as the second party.
Self-Insured Retention (SIR): Self-Insured Retention refers to that portion of a liability or property loss that a policyholder retains.
Severity: The size of the loss is called severity. Loss severity is taken under consideration when it comes to determining the rates of the premiums.
Short rate Cancellation: In cases where the cancellation of a policy gets initiated by policyholder request, the premium that is returned becomes a subject for administrative penalty which is applied on the policyholder.
Subrogation: Subrogation is the process through which the amount of losses that are paid to a policyholder (by the party that is legally accountable for making the payment) is recovered. When the legally liable third party is persuaded by a company, in the recovery process it has to take the deductible of the policyholder into account.
Third Party: Third Party is an individual other than the policyholder and the insurance company who got negatively affected (suffered a damage or loss) and maybe eligible to obtain compensation according to the policy based on the acts of negligence or omissions of the policyholder.
Third Party Over: Third Party Over refers to the doctrine which allows an injured worker/employee to bring suit against a third party for some reason where the third party can bring an action against the employer.
Underwrite: Underwrite is the procedure through which an insurance application along with the independent sources are evaluated in an attempt to verify the provided information and also to assess the acceptability of the risk.
Underwriter: The person who is responsible for dealing with the process of underwriting in order to accept, reject or modify the risks on behalf of the insurer is known as the underwriter.
Unearned Premium: Unearned premium is that part of the written premium which is applicable to the unused or unexpired portion of the policy period for which the premium was paid. Say for example, in case of an annual policy, at the end of the policy’s first month, as much as 11/12 of the premium is unearned.
Waiver: Waiver is the relinquishment of a right which is known, something which may be implied or expressed.
Written Premium: The total premium that an insurer writes for a certain period of time for all policies-without considering which part of it has been earned- is called written premium.