Associate of the Chartered Insurance Institute. (British)


Associate of the Insurance Institute of Canada.


To voluntarily relinquish all right, title, claim and possession of property

with the intention of not re-claiming it


A lapse in succession when there is no one in whom title is vested.

Abridgment Of Damages

In certain cases, the right of the court to reduce a damage award.

Absent Renewal

An employer may wish to engage an employee on a temporary or contract basis, with the understanding that upon the expiry of the fixed term of employment or at the end of the contract, the employment relationship will be at an end and the employee will not be entitled to any compensation as a result of the termination of the employment relationship.

Absentee Landlord

Normally the owner of real property who does not live on the premises.

Absolute Liability

Responsibility without fault or negligence.

Abstract Of Title

A concise chronological history of the title to land, consisting of a summary of all the conveyances which in any manner affect said land, or any estate or interest therein, together with a statement of all liens, charges, or liabilities to which the same may be subject, and of which purchasers must be apprised.

Abutting Owner

An owner of land which abuts or adjoins.

Accelerate Depreciation

A method of depreciation that yields larger deductions early in the life of an asset compared to the straight-life method of depreciation.

Acceleration Clauses A penalty

Clause that permits the rent due during a period to be accelerated.


When the insurer agrees to accept the application and to issue a policy and communicates same to applicant.


An unforeseen event or occurrence at a given time and place, occasioning physical injury to person or property. A more comprehensive term than “negligence”.

Accident and Health (Sickness) Insurance

Insurance which undertakes to indemnify the individual for loss as a result of an accident or illness.Payment is usually a fixed rate per month while the consequent disability lasts, and sometimes includes the payment of fixed sum to his heirs in case of death by accident within the term of the policy.

Accident Year Experience

Matching losses with premiums earned during a specific period.


Happening by chance; fortuitous.

Accommodation Business

The request for coverage on a risk which is substandard or marginal but which the underwriter agrees to accept as a favour or accommodation to the broker.

Accommodation Line

A risk which would ordinarily be rejected on a strict underwriting basis but is accepted by an insurer to maintain a good relationship with a valuable agent/broker.


One who knowingly and voluntarily assists in the commission of a crime.


is the ability to measure actions and the willingness to bear the consequences of one’s actions, whether positive or negative.

Account Current

The details of premiums written, return premiums, commissions and net amount due to balance that is regularly reported by an agent/broker to the insurer.

Accounting – Accrual Basis

Showing expenses incurred and income earned for a given period, although they may not have been actually paid or received.

Accounting – Cash Method

Income and expense are recorded only when received or paid out.

Accounts Receivable Insurance

Protects business against inability to collect accounts receivables because of loss of supporting records form an insured peril.

Acid Test

An accounting test that measures the ability of a business to pay its current liabilities. Sum of cash, marketable securities, and receivables divided by current liabilities. Also called the “quick ratio.”

Acquisition Cost

The cost of putting business on the books. For an insurer, such costs can include against’/brokers’ commissions, office overhead costs, and premium tax.


n. In a general sense, signifies something done voluntarily by a person.

Act of God

A flood, an earthquake or other act occasioned exclusively by violence of nature that is without any human intervention and that could not have been prevented by reasonable care or foresight.

Actio Ex Delicto

In civil and common law, an action arising out of fault, misconduct, or malfeasance.


A suit brought in a court; a formal complaint within the jurisdiction of a court of law.

Action Plan

The term action plan is used to refer to plans that would apply to a particular business unit and generally have a one-year time horizon. Action plans are much more detailed than the strategic plan for the entire brokerage.

Activities Standards

Involves evaluating the effectiveness of the risk management program using standers based on activities, not based on, what for the most part are, uncontrollable losses.

Actual Cash Value

The fair or reasonable cash price property would bring in a fair market, allowing for depreciation.

Actual Loss

Loss resulting from the real and substantial destruction of the insured property.

Actual Loss Sustained

Refers to the basis of payment under most Business Interruption policies. The amount of the payment is limited to the actual amount the business would have earned had the loss not occurred.

Actual Total Loss

In marine insurance, a loss in which the subject property is totally lost or is so badly damaged that it has no value left.

Additional Insured

Person(s) covered by policy in addition to the named insured.

Additional Interest

Same as Additional Insured.

Additional Living Expense Insurance

A form of coverage which provides funds to pay for increased living costs which result from damage covered by the policy.


Where mail and other communications will reach person.

Adjacent Property

Property lying near or close to the insured property which may affect the hazard or loss or the premium rate.


To determine the amount to be paid to insured by insure to cover loss or damage sustained.


A representative of the insurer who seeks to determine the extent of the firm’s liability for loss when a claim is submitted.

Public Adjuster

One who is employed by an insured to represent him in negotiations with an insurance company.

Adjuster’s License Bond

Guarantees reimbursement to a claimant of the loss suffered as a result of any improper or illegal act of an adjuster.


The ascertainment of the amount of a loss and the retable distribution of it among those liable to pay it.


A person appointed by the court to manage the assets and liabilities of a deceased person.

Admiralty Bond

In marine insurance, replaces the ship as security and guarantees payment of whatever amount may be awarded to the claimant. Once the bond is posted the ship is released.

Admiralty Courts

Courts of law which deal with matters pertaining to the sea.

Admitted Company

Insurer or reinsurer licensed or approved to conduct business in a particular jurisdiction.


One who has attained the legal age of majority, generally 18 years. At civil law, a male who had attained the age of 14 and a female who had attained the age of 12.


in marine insurance, an agreed percentage increase applied to the total of invoice plus freight, for unknown expenses at the time of shipment, and also for a portion of the insured’s profit.

Advance Payment Bond

Guarantees the principal will use monies advanced form construction or other contract for purpose intended.

Advance Premium

The initial payment made at the beginning of a policy period where the policy provides for premium adjustments during its term or at its expiration.


In marine insurance, the exposure of property to risk at sea.

Joint Adventure

A Commercial or maritime enterprise undertaken by several persons jointly.

Adverse Selection

Situation occurring when applicants for insurance are largely those most likely to suffer a loss. If an insurance company did not properly screen all proposals for insurance, it would become the victim of adverse selection.

Advertiser’s Liability Insurance

Covers against claims for libel, slander, defamation, infringement of copyright, etc., arising out of its advertising program.

Advisory Council

An advisory council is comprised of members of brokerages who sell their products. These councils meet regularly to discuss company policy and how the decisions made by the insurance company effect the production force.

Aesthetic Value

The artistic worth of something as contrasted with its practical value.


A written or printed declaration or statement of facts, made voluntarily, and sworn before a person having authority to administer such oath or affirmation.


A condition of being in close connection, allied, associated, or attached as a member or branch.

Affirmative Warranty

Confirms a fact is in existence at time insurance policy is entered into, as contrasted to a promissory warranty which requires that something be done or not done after policy has taken effect.

Affreightment Contract

In marine insurance, contract which sets forth the obligations of both shipper and carrier concerning transportation of the merchandise. The most common forms of affreightent are Bills of Lading and Waybills.

Agency Public Interest

Act or agreement which has been declared to be detrimental to the general good or public welfare.


The relationship established by contract whereby one person, known as the principal, employs and authorizes another person, called the agents, as a representative in business transactions with third parties.

Agency Agreement

An agency Agreement will provide the brokerage with the authority to bind the insurer for certain classes of risks and limits.

Agency Contract

Legal agreement between an insurer and an agent/broker outlining their respective rights and duties.

Agency Experience

Insurance agency’s loss ratio used by insurers to assess an agency’s profitability.

Agency Number

Number issued by insurer to agent or agency under which all transactions are recorded.


A person authorized by another to act for him. One who represents and acts for another under the contract or relation of agency. In insurance, person authorized to represent insurer in dealing with third parties in matters relating to insurance.

Agent Of Record

The agent indicated on each insurance policy, binder, bond or acceptance.

Age Of

Majority Age at which a person may contract, execute a valid will or vote, and age at which payments for support by parents may generally be terminated, now 18 in most jurisdictions.


Total amount.

Aggregate Limit

The aggregate limit stated on the Declarations is the most the policy will pay during the policy period for all claims for which insurance is provided.

Aggregate Products Liability

Total amount which the liability policy will pay for claims arising out of the use and distribution of products during policy period.


Extreme physical pain or mental distress.

Agreed Amount Clause

Clause in policy providing that the insured will carry a stated amount of insurance coverage.

Agreed Value

The agreed value on an ocean marine cargo policy is how much is insured regardless of the fact that this value may be below or above the true value.


The coming together of two or more minds with respect to their right s and duties.

Express Agreement

Whereby the terms and stipulations are specifically declared and acknowledged by the parties at the time of making the agreement.

Implied Agreement

(a) Implied in fact. One presumed from the acts or behaviour of the parties, rather than that expressed by them in written or spoken words.(b) Implied in law. One where a promise is implied to perform a legal duty.

Agreement For Insurance

A short term agreement often made prior to filling out and delivery of policy with specific stipulations. See Binder.

Agricultural Equipment Floater

Insures equipment usual to a farm or ranch.

Air Cargo Liability Insurance

Covers the legal liability of an air carrier for loss or damage to cargo while in its care, custody or control.

Air Carrier Bond

Guarantees passengers will not be left stranded by charter flight operators.

Aircraft Hull Insurance

Covers physical damage to aircraft while in flight or on the ground.

Aircraft Liability Insurance

Protects insured for liability for property damage and bodily injury arising out of the ownership or use of insured aircraft.

Aircraft Passenger Liability Insurance

Protects insured for liability resulting from bodily injury, sickness or disease suffered by passengers arising out of the ownership or use of insured aircraft.

Aircraft Product Liability Insurance

Protects those who manufacture, sell or repair or maintain aircraft their components and equipment against liability resulting in injury or damage caused by defects in the products or from improperly completed operations.

Alienation Clause

In fire insurance policy, provision voiding such policy upon transfer of ownership by insured.

Alien Company, Carrier or Insurer

A company doing business in Canada but incorporated in a foreign country.

Allied Lines

Coverages which are associated with property insurance.

All Risk Policy

A policy which does not name the perils which are covered but one which covers against all perils except those specifically excluded in its terms.


To make a change in some of the elements or ingredients or details without exchanging an entirely new thing or destroying the identity of the thing that is affected.

Alternative Dispute Resolution

To refer disputes between parties to a mediator or arbitrator to help resolve the issues.


Dispute resolution which allows each party to weight respective concerns and interests of their own case and the opposing party’s case in a more direct and personal manner.


may be binding or non-binding and involves a decision by an impartial arbitrator adjudicating the merits of the case.


Lack of clearness or definiteness; capable of having more than one interpretation.




To improve.


A change or modification for the better.

Amortization Period

Amount of time required to discharge a financial obligation.

Amount Covered

The amount that is insured and for which insurer is liable under a policy of insurance.

Amount Of Insurance

The limit of payment for which an insure is liable under the policy.

Amount Subject

The value which may reasonably be expected to be lost in one fire or conflagration.


Extreme pain of body or mind, particularly mental suffering or distress of great intensity.


Animal life other than human. Domestic animals are tame, living in or near a person’s home. Wild animals are generally those who are undomesticated and live in the wild.

Anniversary Date

Yearly recurring date of the initial issuance date of the policy.


Coming or happening yearly.


An investment of money entitling investor to series of equal annual sums.


Abolish, cancel; declare invalid.

Anti-Discriminatory Laws

Those Laws which prohibit companies form giving preferential terms or rates not warranted by the underwriting of the risk.

Apparent Authority

In the law of agency, such authority as the principal knowingly or negligently permits the agent to assume, or which he holds the agent out as possessing.

Apparent Defects

Defects in goods which can be readily seen.


Resort to higher court to review the decision of a lower court or administrative agency that is deemed erroneous in the application or interpretation for the law or the facts.

Appeal Bond

The bond given on taking an appeal, by which the appellant and his sureties are bound to pay costs if he fails to prosecute the appeal with effect.


The party who appeals the decision of a lower court to a higher court.

Appellate Court

Court having jurisdiction of appeal and review.


The party requesting insurance.


Initial request, declaration, or statement made when applying for an insurance policy. Can be verbal, written or by use of a printed form.


To assign power to discharge the duties of a particular office or trust.


To allocate and share proportionally.


When more than one policy involved in a loss, the process through which it is determined how much each policy on a risk must pay.

Apportionment Clause

Clause which distributes insurance in proportion to the total coverage.


A valuation or an estimation of value of property normally done by experts who have no personal interest in the property.

Appraisal (Statutory Condition)

A clause in insurance policy which extends right t insured and /or insurer to demand an appraisal of damaged or lost property.


To fix or set a price or value upon a thing, usually in writing.


A just and true valuation of property, especially that seized by Court, or in execution or by distraint.


One who, because of specialized knowledge, is selected or appointed to make an appraisement.


Something which belongs to something else, e.g., appurtenances of automobile. Usually, the two will remain in relationship, and will pass with ownership.


A person bound to decide according to the rules of law and equity, as opposed to an arbitrator, who may proceed wholly at his own discretion.


Reference of a dispute to an impartial third party chosen by the parties to the dispute who agree in advance to abide by the arbitrator’s award. The award is issued after a hearing at which both parties have an opportunity to be heard.

Arbitration Clause

Clause in a policy of insurance, reinsurance, or other contract that provides for compulsory arbitration in the event of a disagreement between the parties.


Private, disinterested person(s), chosen by the parties to a disputed question, for the purpose of hearing their contention, and gibing judgment between them. The parties submit themselves in advance either voluntarily or compulsorily to the arbitrator’s decision.


A designer of buildings who prepares plans and superintends its construction.

Area Protection

Crime insurance. Prevents against intrusion into areas not protected by perimeter protection devices, i.e., the interior of buildings.


Taking custody of another for the purpose of holding or detaining him to answer a criminal charge or civil demand.

Civil Arrest

Apprehending a person by virtue of lawful authority to answer the demand against him in a civil action.


In marine insurance, a vessel’s arrival means an arrival for purposes of business, requiring an entry and clearance and stay at the port so long as to require some of the acts connected with business. Arrival dose not include merely touching at a port because of adverse weather, for advice, or to determine the state of the market.


At common law, the malicious burning of the property by its owner or some other person.

Articles Of Incorporation

The basic documentation filed with the appropriate government agency when a business is incorporated.


Created or produced by man, as opposed to “natural”.

Artificial Person

Persons created and devised by law. Corporations are examples of artificial persons.


One who is skilled in a trade, craft, or art requiring manual dexterity.

Artisan’s Lien

An artisan’s legal right to possess the object that he has worked on until he has been paid for his labour.

As Is

When this expression is used in a sales agreement, it implies that the buyer takes the entire risk as to the quality of the goods involved and he must trust to his own inspection. Implied and express warranties are excluded in sales of goods “as in”.


Any willful attempt or threat to inflict injury upon the person of another, if it is apparent that the ability to injure is present. Also, any intentional display of force such as would give the victim reason to fear or expect immediate bodily harm. It would be considered an assault even if there is no actual touching, or striking, or doing bodily harm, to another person.

Assault And Battery

Any unlawful touching of another which is without justification or excuse. Battery requires physical contact of some sort whereas assault is committed without physical contract of some sort whereas assault is committed without physical contact. See Battery.


A number of persons meeting or gathering at the same place. Also refers to the persons so gathered.


Approval of something done.

Express Assent

That which is openly declared.

Implied Assent

That which is presumed by law, and proved by conduct of the parties.

Mutual Assent

The agreement of all parties to a contact to all its terms and conditions.

Assessable Insurance

Insurance policy under which an insured is liable to pay an additional premium if losses prove to be unusually large.

Assessment Insurance

Type of mutual insurance where the policyholders are levied an amount whenever there is a loss.


All property, real, personal, tangible and intangible, that belongs to any person including a corporation and the estate of a decedent.

Current Assets

All property that is readily convertible into cash, such as accounts receivable, notes, and securities.

Quick Assets

An accounting term used to describe cash and receivable, including notes and sometimes marketable investments, which, as part of normal operations, will be converted into cash.


To transfer to another.

Assigned Risk

A risk which is poor and not ordinarily acceptable to insurers but for which coverage is required by provincial statute and which is, therefore, assigned to insurers participating in an assigned risk pool.

Assigned Risk Plan

A plan between insurance companies who are compelled to write coverage for persons who are unable to buy coverage in those provinces having compulsory motor vehicle insurance.


One to whom an assignment is made.

Associate of the Chartered Insurance Institute (ACII)

A professional designation (Britain) earned by examination following study courses.

As Soon As Practicable

Within a liability policy, requires the insured will notify the insurer of an occurrence within a reasonable time in view of all the facts and circumstances of each case. This does not mean the same “as soon as possible.”


To promise or undertake. In insurance, to agree to insure a risk is to “assume” it.

Assumed Liability

Liability which would not rest upon a person except that he has accepted responsibility by contract expressed or implied. This is also known as Contractual Liability.

Assumed Portfolio

Insurer’s transfer of insurance liability to a reinsurer to settle all liabilities of a partial or total portfolio of the insurer for appropriate consideration.

Assumption Certificate

Coverage provided by a reinsurer which guarantees payment to parties not participating in the reinsurance contract.

Assumption Of Risk

The doctrine of assumption of risk, also known as volenti non fit injuria, means legally that a plaintiff may not recover for an injury received when he voluntarily exposes himself to a known and appreciated danger.


Term used in England and Canada which is synonymous with “Insurance”.


Used interchangeably with “insure” in insurance law.


One who has been insured by an insurance company or underwriter against losses or perils as indicated in the insurance policy. Synonymous with “insured”.


Insurer against certain perils and dangers.

A Tort

Wrongfully; unjustly; without reason.

A Tort Of A Droit

Right or wrong.


To seize property under a writ of attachment. In insurance, a policy “attaches” when it comes into force.


A remedy to an action by which the plaintiff is granted the right to acquire a lien upon a defendant’s property to satisfy a judgment which the plaintiff may obtain.

Attachment Bond (Defendant’s)

A bond used to dissolve an attachment in order that the property subject to the attachment can be sold or disposed of. Such a bond would suffice to satisfy the plaintiff’s judgment.

Attachment Bond (Plaintiff’s)

A bond which the court requires a plaintiff to furnish which indemnifies the defendant against loss or damage if the property taken as security by the plaintiff from the defendant is not returned should the plaintiff lose his case.

Attachment Of Risk

Used to describe that time when title passes when risk of loss for destruction of property which is subject of sale passes to buyer from seller.


(a) To witness a signature.

(b) To certify to be true or genuine.


In a general sense, denotes an agent or substitute, or one who is appointed and authorized to act in the place or stead of another. Usually, however, it means “attorney at law”, “lawyer” or “counselor at law”.

Attractive Nuisance Doctrine

A legal tort doctrine which holds that person who has or creates any condition upon his own premises, or who creates such condition on the premise of another, or in a public place, which may reasonably be considered to be a source of danger to children, is under a duty to take such precautions as a reasonably prudent man should take to prevent injury t young children whom he knows visits there or who may come there to play.


One who is authorized to sell lands or goods of other persons at public auction. This is different from a broker in that a broker may both buy and sell, whereas an auctioneer may only sell. Another difference is that brokers may sell by private contract only whereas auctioneers sell by public auction only.


(a) Survey insured’s books, made to determine the premium which should be paid the insurance company for protection furnished where the premium is based on the insured’s payroll, gross receipts, values on hand or units handled or sold.(b) Revenue Canada performing an inspection and verification of a taxpayer’s return or other transactions possessing tax consequences.


One who checks accounting records and statement for accuracy, fairness, and general acceptability and then attests to them.


The power delegated to an agent by a principal. Permission.

Binding Authority

Authority which is implied.

Apparent Authority

Authority which the principal, although not actually granted, knowingly permits the agent to exercise, or which he believes him to possess.

Authority BY Estoppel

Authority that is apparent and not actual, being placed on the principal as his conduct has been such as to mislead, so that it should be unjust to let him deny it.

Express Authority

Authority that is given explicitly either in written form or orally.

General Authority

The authority which authorizes the agent to do everything connected with a particular business, and which binds his principal to all acts within the scope of his employment.

Implied Authority

The authority which is implied form the principal’s conduct and which the principal intends his agent to possess.

Authorized Company

An insurance company licensed to do business in a province.

Automatic Coverage

Certain policies provide automatic coverage which provides coverage for property other than that covered at the commencement of the contract if and when the policyholder acquires ownership, or in the event of some similar happening which the policy describes.

Automatic Premium Loan

In a life insurance policy, a provision that allows if the premium is not paid by the policyholder with in the allotted time after the due date, the amount of the premium will be loaned to him automatically. It is limited to the cash value of the policy is not sufficient to cover the loan plus applicable interest.

Automatic Reinstatement

Once a claim has been paid or property restored, most policies automatically return the stated limited of insurance to its original amount.

Automatic Sprinklers

A water sprinkler device which protects property form fire damage.

Automobile Fleet

A number of automobiles which are owned and managed by the same entity.

Automobile Insurance

Insurance policy designed to insure exposures arising out of ownership or operation of an automobile, including but not limited to third party liability, accident benefits and physical damage to the insured automobile.

Auto Theft

The stealing away of a motor vehicle form the owner or possessor with the intention of depriving him permanently of it.

Auxiliary Heating

A heat source which is used in conjunction with a primary source of heat (e.g. woodstove)


In marine insurance, partial loss or damage.


In marine insurance, loss arising through a voluntary sacrifice of any part of the ship or cargo, or an expenditure, cargo, and which is shared between interests.

Gross Average

Commonly called “general average”, a provision whereby if loss or damage occurs to a vessel or its cargo at sea, the loss is adjusted and apportioned between the owner, the freight, and the cargo, in proportion to their respective interests and losses. In this way, one will not suffer the whole loss, but will each contribute ratably.

Particular Average

A particular average loss is a partial loss of th3e subject matter insured, caused by an insured peril, and which is not a general average loss.

Average Adjuster

A marine adjuster who carries out the following role

In the case of a general average the average adjuster prepares a statement showing what portion of a loss is payable in general average by each of the parties to the adventure in accordance with the rules set down in the bill of lading and rules or practice of the Average Adjusters Association and by marine law. In a partial loss or total loss the average adjuster ascertains what portion of loss is covered by marine insurance policies in accordance with low and practice and apportions it over the policy or polices with the amount covered by the policy.

Average Clause

An insurance policy clause that states that similar items covered by one insurance policy shall each be covered in the proportion that the value in each bears to the value in all.

Average Rate

When more than one item is insured in a single policy of insurance for a single amount of insurance, the amount of insurance on each is multiplied by its rate. The sum of all the premiums divided by the total amount of insurance will produce an “average” rate for the whole.

Average Risk

A risk in accordance with the conditions called for in establishing the basic rate.

Aviation Clause

Found in some life insurance policies which limits the insurer’s liability if a claim arises from certain actions related to flying, e.g. pilot, flying instructor or student.


To annul; cancel; make void; to destroy the efficacy of anything. To evade; escape.

Avoidable Consequences, Doctrine Of

the doctrine which imposes duty on an insured person to minimize damages.


In marine insurance, the right of an underwriter, in the event of a breach of good faith or delay in commencement of an insured voyage to step aside from the insurance contract and treat it as thought it has never been accepted.


v. After careful weighing of evidence, to grant, concede, or adjudge to, e.g. a jury awards damage, a municipality awards a contract.


n. The decision rendered by arbitrators or commissioners.




Predating a document prior to the date it was actually drawn, which does not affect its negotiability.

Bad Debt

A debt that is deemed uncollectible.

Bad Faith

Fraud; the intent to mislead or deceive; conscious doing of a wrong for dishonest purposes.Differs from negligence in that the person is operating with furtive design or ill will.

Bail Bond

A bond which guarantees the appearance of a person in court to answer a legal summons. Failure to appear forfeits the bond amount.


In the law of contracts and property. One to whom goods or property are entrusted. Can be either gratuitous (for no consideration) or for hire (for Consideration).

Bailee For Hire

One who has temporary possession of personal property of others for a purpose other than sale and who in compensated for caring for it.

Bailee Policies

Policies which provide coverage on goods of others while in possession of bailee.

Bailee’s Lien

Bailee’s right to retain goods in his possession (bailed goods) for payment of services.


The act of placing goods in the possession of a bailee.

Bailment For Hire

A contract whereby it is agreed the bailor will compensate the bailee.

Bailment For Mutual Benefit

One in which the bailor and bailee agree on a compensation in return for benefits flowing from the bailment, necessarily involving an express or implied agreement or undertaking to that effect, e.g. delivery of automobile to mechanic who, for a price, undertakes to repair it.

Gratuitous Bailment

A ailment which is made only for the benefit of the bailor and is not a source of profit to the bailee.


One who delivers goods to another in the contract of bailment.


In insurance, under surplus share reinsurance, the desired relationship between a reinsurer’s written premium and its maximum limit of liability.

Balance Sheet

Financial statement showing assets, liabilities and equity of a company in conformity with generally accepted accounting principles.


An incorporated institution that carries on the business of receiving money on deposit, chasing cheques or drafts, discounting commercial paper, making loans, and issuing promissory notes and bank notes.

Bankers Blanket Bond

Broad form of bond and insurance coverage designed for financial institutions, e.g. banks, credit unions, trust companies.

Band Inquiry Letter

Before issuing a bond. The surety corresponds with a contractor’s bank to determine his financial soundness.

Bank note

A ban-issued promissory note payable to bearer on demand.


One who is unable to pay his debts as they become due. When used within the context of the Bankruptcy Act, Refers to one who is liable to be proceeded against by his creditors therefore, or of one whose circumstances are such that he is entitled, on voluntary application, to take the benefit of the bankruptcy law.

Bankruptcy Act

Federal law for the benefit and relief of creditors and their debtors in cases when debtors are unable or unwilling to pay their debts.

Bareboat Charter

A document whereby one who leases or charters a boat becomes for all practical purposes the owner during that time.

Bare Or Mere Licensee

One whose presence on premises is only tolerated. As opposed to a ‘licensee” or “invitee” who is on the premises by express or implied invitation.


To negotiate the terms of a purchase or contract.

Barratry (Also spelled Barretry)

In marine insurance, a criminal or wrongful act by the ship’s master or crew causing loss or damage to the ship or cargo.


When legal redress r recovery is obstructed by a bar or barrier, e.g. when a claim is “barred by the statute of limitations.”


The exchange of goods and/or services without using money.


Unlawful use of force to the person of another. Commonly combined in the term “assault and battery. ”See Assault And Battery.

Technical Battery

When a health professional during the course of treatment exceeds the consent given by a patient.

Basic Bias

Is an interpretation of an insurance policy where the rights and duties of the insurer are tempered by the inequality of bargaining power between insured and insurer.

Basic Rate

The standard charge for a specific type of risk, subject to debit and credit adjustments.


One who possesses an instrument, document of title, or security payable to bearer.

Bearer Bond

Bond payable to the person who possesses it.


Capacity The load per unit area that the ground or structure can support with failing or setting.


To start; to come into existence.


To be the property of.


Something which is connected with a principal or greater thing.


One’s property and possessions. See Personal Effects.


Benchmarks are the established criteria against which actual results can be measured. Their purpose is to serve as a base for measuring performance.

Beneficial Enjoyment

The enjoyment one has of an estate in his own right, and not as trustee for another.

Beneficial Use

As distinguished from the right of occupancy or possession, refers to one’s right to use and enjoy property according to his own inclination or so as to derive a profit or benefit from it.


Receiver of benefits. In insurance, one who is entitled to take proceeds on insured’s death.

Benevolent Associations

Charitable or philanthropic associations.


By will, to give personal property.


By will, a gift of personal property.


An agreement by which two or more parties agree that a sum of money or other valuable thing shall be paid or delivered to one of them on the happening or not happening of an uncertain event.


A temporary or permanent improvement beyond mere maintenance to a property which augments its value. Also used to describe the added value which a property receives if a public improvement such as street widening is undertaken.


A space which separates. When used to indicate a measure of distance, the two termini are excluded. Similarly, in computing the time in a case where something is to be done between two certain days, both the named days are to be excluded.


A formal offer to perform work or supply goods and services for a specified price.

Open Bid

Offer to perform a contract together with the price, but with right to reduce the price to meet price quoted by others for same job.

Sealed Bid

Offer submitted under seal to perform a contract together with the price, and which is not to be opened until all bids are opened and compared.

Bid Bond

A guarantee that the contractor will enter into a contract, if it is awarded to him, and furnish such contract bond, sometimes called Performance Bond, as is required by the terms thereof.

Bid Date

The date on which bids must be submitted.


One who offers to performance a certain contract for a specified price.


Security A financial guarantee in the form of a bid bond or certified cheque which accompanies the contractor’s bid guaranteeing that, if awarded the contract, he will execute the contract according to the contract documents.

Bilateral Contract

A contract in which both parties are bound to fulfil obligations reciprocally towards each other.

Bill Of Adventure

A written certificate issued by the vessel’s owner or master or a merchant stating that the property and risk in goods or cargo shipped in his own name is actually the property of another to whom he is accountable for the proceeds alone.

Bill Of Entry

A document prepared by importers for customs officer’s use describing goods and their values.

Bill Of Lading

A receipt of goods for shipment issued by person engaged in business of transporting or forwarding goods. It describes the cargo, gives the name of the consignor, terms of the contract for carriage, and directs where the freight is to be delivered.

Clean Bill

Bill of leading which does not contain any notation that qualifies the words of the bill of lading itself, i.e., signifies that the goods were received by the carrier in good condition.

Foul Bill of Lading

Bill of lading containing a notation that when received by carrier the goods/cargo had characteristics which might be considered defective or damaged.

Negotiable Bill

Bill of lading in which terms call for goods to be delivered to bearer or to order of named persons.

Non-Negotiable Bill

Document of title in which goods are consigned to named persons but is neither signed nor capable of transferring title in the good described in it.

On Board

Bill of lading which shows that loading has been completed.

Order Bill

Bill of lading made to order which can be negotiated by any consignee presenting it.

Straight Bill

Bill of lading which stipulates that the goods are to be delivered only to the named consignee.

Through Bill

Bill of lading issued by a carrier form port of lading to port of destination (whether railroad, shipping line, airline) for a voyage requiring on carriage and involving at least one trans shipment which might be facilitated by other transport means.Trans shipment coats/freight is normally included in the fixed rate originally agreed between shipper/carrier. The issuer of the bill of lading may be responsible for the goods throughout the voyage or for only one leg acting as agent for the on-carriage.


To bring or place under definite duties or legal obligations.


A written or oral agreement from the insurer giving temporary protection to insured pending issue of the policy,

Binding Agreement

An enforceable contract.

Binding Receipt or Slip

A temporary evidence of insurance usually issued by an authorized insurance agent or broker after taking an application for insurance and pending notice of acceptance or rejection from the insurer.

Blank Bill

Bill of exchange with blank where payee’s name should be.

Blanket Bond

Blanket Bonds, issued to bankers, brokers and others engaged in the financial field, are broad contracts of insurance covering losses of property as defined in the bonds, sustained by reason of dishonesty of employees, burglary, robbery, hold-up, theft, misplacement, mysterious disappearance, damage and destruction.

Blanket Contractual Liability

This coverage protects your business when liability arises form obligations you have assumed under specific or implied contacts with others.

Blanket Coverage

Insurance policies that allow insureds to select a single limit of insurance for all property falling within a specific class.

Blanket Fidelity Bond

Covers losses of money, merchandise or other property, real or personal, belonging to the employer or in which he has a pecuniary interest or which he may be holding in any capacity, when such loss is due to dishonesty of an employee.

Blanket Policy

Policy of insurance which covers two or more items, or two or more locations, in one aggregate sum without having to list separate amounts for each item.

Blanket Position Bond

Fidelity bond covering all of the insured’s employees.

Blanket Rate

Insurance rate applied when there is more than one property or subject of insurance insured in one policy.

Blind Selling

Selling wherein a buyer or goods is not given an opportunity to examine them.

Block Limits

An insurer’s acceptable limit of fire insurance within any one block or area.

Block Policies

Broad form of coverage which insures all property belonging to, or on consignment to, the insured, including property of others held by him.


In negligence cases, the failure to do what should have been done or the doing of that which should not have been done, resulting in an event or injury such care as a reasonably prudent person would have exercised under similar circumstances.

Board Of Directors

A corporation’s governing body who is elected by the stockholders to act on major matters affecting it, such as electing officers and declaring dividends.

Bodily Injury

Generally defined in liability policies to mean bodily injury, sickness or disease sustained by a person, including death resulting from any of there at any time.

Body Injury Liability

Liability which may arise from injury or death of another person.

Body Corporate

A public or private corporation.

Bona Fide

Sincere; without deceit. In utmost good faith.


An obligation of the insurance company or surety to protect one against financial loss caused by the acts or failure of another.

Bonded Shipment

Shipments on whish duty is payable, but which are permitted to travel to inland destinations before customs inspection is made and duty is actually paid.

Bond Indenture

The contract between bondholders and the bond issuer.


Personal or corporate surety.


Something which is given in addition to what is ordinarily received or is due to be received by the recipient.

Book Value

Accounting terminology which values the assets of a company, deducts the liabilities, and divides that sum by the number of shares of common stock outstanding. This gives a going-concern value for the market value. The valuation at which assets are carried on the books as based on cost less reserve for depreciation.


Summary of insurance or reinsurance transactions between agent and company.

Border Line Risk

Risk which would ordinarily be rejected but is accepted from an agent with a good record of underwriting.


One and the other.


In maritime law, a contract by which a ship’s owner pledges the ship or part of the ship as security against a loan used to equip or repair the vessel. The document stipulates that the lender shall lose his money if the ship is lost in the specified voyage by any of the perils listed. When the loan is made on the goods on board the ship, which are to be sold during the course of the voyage, the borrower’s personal responsibility is deemed the principal security for the performance of the contract.

Bottomry Bond

The document embodying the bottomry contract. A bond that mortgages the ship as security.


adj. The condition of being constrained by the obligations of a bond, contract, covenant, or other moral or legal obligation.


Natural or artificial separations which mark the confines or line of division of two bordering properties.

Barking Distance

Sometimes called stopping distance, the total distance required to stop a motor vehicle for, time driver recognizes need to stop until vehicle is stopped. Vehicle speed, weather, road conditions, tires, and brake condition are some factors which control braking distance.

Brands and Labels Clause

This endorsement will reimburse you for costs when damage occurs to your property and it must be stamped as salvage or voided, or when your labels must be removed from the property items due to damage.


Failure to live up to the conditions or warranties contained in a policy.

Breach Of Contract

Failure, without legal excuse, to perform, any promise which forms the whole or part of a contract.

Breach Of Covenant

The nonperformance of any covenant agreed to be performed, or the doing of any act agreed not to be done.

Breach Of Duty

In general terms, violating or omitting a legal or moral duty.

Breach Of Warranty

The failure or falsehood of an affirmative promise or statement, or the non-performance of an executory stipulation.

Breathalyser Test

The test administered to one arrested for operating a motor vehicle under influence of liquor. The test determines the alcohol content of the arrestee and are admissible evidence.

Brick Construction

Building constructed of brick and mortar.

Brick Veneer Construction

Frame construction with a single course of brick as an out side covering.

Bridge Policy

Inland marine policy which insures only bridges.

Bring Suit

To initiate a legal proceeding in a suit.

Broad Form Property Damage

This coverage expands your general liability policy to include certain property while in your care, custody, or control. When performing normal operations, the property is insured from damages resulting in a loss of use, for which you (or your business) are held liable.

Broken Stowage

The space in a ship not filled with cargo.


One who is an independent middleman, not tied to a particular company, who obtains insurance for his clients from insurance companies or their agents.


One who is licensed to act both as broker and agent.

Broker of Record

The broker currently receiving commission to handle a policy.

Brokerage Agreement

The terms and conditions for representation of an insurance company. Frequently called an agency agreement or agency contract.

Brokerage Contract

A contract of agency, whereby broker is authorized to make contracts on behalf of his principal, and for which his is paid an agreed commission.

Brokerage Market

Group of reinsurers accepting business mainly through intermediaries.


A financial plan coordinating resources and expenditures.

Buffer Layer

Coverage between maximum policy limit which a primary underwriter will write and minimum deductible over which excess reinsurer will cover.

Builder’s Risk Insurance

Covers building during construction. Normally includes coverage for all materials entering into project, including landscaping. Coverage for transit exposure and property at another location usually available as coverage potions.


Structure designed for habitation, shelter, storage, trade, manufacture, religion, business, education, and the like. Usually but not necessarily covered with a roof.

Building Code

Laws and regulations setting out construction standards in a jurisdiction.

Building Lien

The statutory lien of a material man or contractor for the erection of a building.

Building Permit

The authorization that is required by local governmental bodies prior to building, expanding or altering existing structures.

Building Rate

Fire insurance rate on a building, different form the rate on contents.


Gold and silver intended to be coined.

Burden Of Proof

In the law, the need to prove facts in dispute.

Burglar Alarms

Devices which give warning that unauthorized persons are entering the premises.


In insurance policies, generally defined as the unlawful taking of property from within the premises by a person unlawfully entering or leaving the premises as evidenced by marks of forcible entry or exit.

Burglary Insurance

Insurance against loss of property caused by burglars.


Employment, occupation, profession, or commercial activity engaged in for gain, benefit, advantage or livelihood.

Business Corporation

Corporation whose purpose is the carrying on of a business for profit.

Business Interruption Insurance

Insurance against business expense and loss of income when business is partially or wholly interrupted as a result of damage to property form an insured peril.

Business Max

The mix of business between personal and commercial lines.

Business Purpose

Property that may, or may not be designated for commercial use.

Private Business

One in which the profit is for private benefit.

Public Business

A Business that the public uses for which commodities are bought and sold in such manner as to affect the community at large as to supply., price, etc.


Except that.


Vertical or upright structure supporting a wall under lateral forces.

Buy And Sell Agreement

An agreement whereby surviving owners purchase the interest of a withdrawing or deceased owner.

Buy Back Deductible

A deductible which may be removed if additional premium is paid.


Regulations, ordinances, rules or laws dealing with matters of local or internal regulation made by local authorities or by corporations or associations.

By-Law Endorsement

Insurance endorsement detailing how insurer deals with a claim which is affected by a local bylaw

By Operation Of Law

Effected by some positive legal rule or amendment.




Canadian Accredited Insurance Broker.


Canadian Certified Insurance Broker.


Cost, Insurance & Freight – Price includes cost of the goods, insurance and freight to the named destination.


Collect on delivery. A sale term under which the carrier agrees to collect the cost of the goods from the consignee.


Canadian Personal Insurance Broker.

C.S.I.O. Centre for the study of Insurance Operation

A national association of property and casualty insurers and independent insurance brokers working together. To achieving excellence in the delivery of value added electronic business solutions.


Great misfortune or cause of loss or misery, often caused by natural forces. See Act of God.

Calendar Year

Period from January 1 to December 31 inclusive. Consists of 365 days except Leap Year and 12 months of varying lengths.

Camera Floater

Extra property insurance policy which insures cameras and their equipment. Required when value exceeds policy limits.


Have a right to; have permission to.

Canada Customs Bond

Multi-purpose Customs Bond used for different customs situations.

Canadian Accredited Insurance Broker (C.A.I.B)

Professional designation awarded upon successful completion of course of study.

Canadian Certified Insurance Broker (C.C.I.B)

Professional designation earned by examination following study courses.


Canadian Professional Insurance Broker.


Termination of insurance before the end of the policy period by either the insured or the insurer or termination of the insurance policy, the insured, on effective date.

Cancellation Clause

(a) Provision in insurance policy or bond stipulating how cancellation can be effected.(b) Provision in a contract or lease which permits the parties to cancel or discharge their obligations there under.


(a) Measure of an insurer’s ability to issue insurance contracts. Usually determined by measuring largest amount it will accept on a given risk or by the maximum volume of business the company is prepared to accept.(b) Legal qualification as the ability to understand the nature and effects of one’s acts.

Capitalization Method

Method used to measure value of realty for purposes of determining value of a mortgage. Involved making estimation of the gross income which the property should realize and the expenses needed to carry it A capitalization factor, expertly chosen, is then applied to the net income amount. Depreciation must be considered when using this method.

Captain Of the Ship Doctrine

Doctrine which imposes liability on medical surgeon in charge of operation for negligence of his assistants while they are under his control, even though they are also employees of the hospital.

Captive Agent

Agents who place all their business with one insurance company.

Captive Insurance Company

Insurance company entir3ely owned by another company. The insurance company insures risks of the parent organization and in some cases, those of non-related organizations.


In the law of negligence, the amount of care demanded by the standard of reasonable conduct must be in proportion to the apparent risk. Three degrees of care frequently recognized are (i) Slight care-such as persons of ordinary prudence usually exercise about their own affairs of slight importance; (ii) Ordinary care – degree of care which persons of ordinary care and prudence are accustomed to use and employ, under the same or similar circumstances, substantially synonymous with reasonable or due care.(iii) Great cares – such as persons of ordinary prudence usually exercise about affairs of their own which are of great importance.


Reckless, negligent.

Care, Custody and Control

Term used primarily in liability coverages which refers to property belonging to another but which is legally in the insured’s possession or under his control.


The freight of a ship, train, truck, airplane or other carrier.


Transportation of goods, freight or passengers.

Carriage of Goods by Sea Act (C.O.G.S.A.)

International agreement defining the responsibilities and liabilities of an ocean carrier transporting cargo.


(a) One who transports passengers or goods for hire.(b) Insurance company which “carries” the insurance.

Common Carrier

Those who transport persons or goods of all persons without distinction.

Private Carrier

Those who transport only in particular insurances and only for those they choose to contract with.

Carrier’s Lien

Carrier’s right to hold cargo until payment for transporting it is made.


In insurance, to possess or hold.

Carte Blanche

Commonly used to mean unlimited authority or full discretionary power.

Case Law

The aggregate of reported cases as forming a body of jurisprudence, or the law of a particular subject as evidenced or formed by the adjudged cases, in distinction to statutes and other sources of law.


Money or its equivalent.

Cash Account

In bookkeeping, a record of all cash transactions.

Cash Flow

Cash funds created by business operation. Looks to the amount of cash left after all payments are made, whether they are tax deductible or not.

Cashier’s Cheque

Cheque drawn by bank which, when presented by payee, will be cashed by the bank.

Cash Market Value

The same as fair market value, reasonable market value and fair cash market value.

Cash Surrender Value

(a) Cash value which may be stipulated in life insurance policy should insured request cancellation of policy before full term. (b) Amount the insured is entitled for the unused portion of his fire and casualty insurance policy. Usually referred to as a refund.

Cash Value

The value an auricle or piece of property would bring at sale.


Happening without design and without being predicted or expected.

Casual Employment

Short term employment for a limited and temporary purpose. Employee usually not entitled to seniority rights or fringe benefits.


Accident which is serious or fatal. Insured, lost or destroyed person or things. A disastrous occurrence due to sudden, unexpected or unusual cause.

Casualty Insurance

Covers losses caused by injuries to persons and legal liability imposed upon the insured for such injury or for damage to the property of others. In practice, has come to mean that area of insurance not particularly concerned with life, fire or automobile insurance and which includes liability, burglary and glass insurance. Fidelity and surety bonds may also be included.


A major disaster.

Catastrophe Cover

Excess cover insurance companies purchase form reinsurance companies that will pay them if they suffer a large amount of loss as the result of an accumulation of net losses in a single event.

Catastrophe Limit

The maximum amount that the insurer will pay in any one disaster.

Catastrophe Number

Special number applied to claims in a catastrophe area.


Being the cause of something produced or something happening. An important doctrine in fields of negligence and criminal law.


v. To bring about.


n. Something that precedes and brings about an effect or a result. A ground of a legal action.

Intervening Cause

That which comes between the initial happening and the ultimate effect.

Superseding Cause

Something that comes between the initial happening and the ultimate effect which renders the initial happening harmless.

Cause Of Action

The fact or facts which give a person a right to judicial relief.

Cause Of Injury

That which produces injury.


To give notice of danger.


Careful in face of danger or risk.

Caveat Emptor

Let the buyer beware. This maxim is generally applied to judicial sales, auctions and the like as opposed to sales of consumer goods where consumers are protected by strict liability warranty and other consumer protection laws.


To yield up or surrender, e.g. an insurer cedes part of a risk to a reinsurer.

Ceding Company

The insurer placing reinsurance with another company is the ceding company.

Centrifugal Force

Refers to the inertia of a body that tends to move it away from the centre around which it revolves.


In law, capable of being identified from data already given; free from doubt.




In insurance, the document indicating existence of a master policy and the participation of an individual insured, e.g. employer may retain medical expense policy while each employee possesses a certificate.

Certificate Of Authority

Document supplied by insurance company to its agent indicating what authority it is conferring on him.

Certificate Of Incorporation

The basic document by which a corporation is formed under general corporation statutes. See Articles Of Incorporation.

Certificate Of Insurance

Document evidencing that policy is in effect and includes statement of the coverage in general terms.

Certificate Of Reinsurance

Written document evidencing reinsurance is in effect.

Certified Cheque

Cheque that is warranted by the bank that sufficient funds are on deposit and have been set aside. Bank is liable to pay such amount to proper party.

Certified Copy

A copy of a document or record which is certified as a true copy by the officer to whose custody the original is entrusted.


The act of ceding. When one transfers property to another.

Cession Of Goods

When one finds himself unable to pay his debts, the relinquishment of all his property to his creditors.

C. & F. (C.F.)

Meaning price includes cost and freight to named destination.


To call or put in question.


Unexpected. The opposite of intention. See Act Of God.


n. Alteration, modification or addition.


v. Alter, make different.


An individual’s moral qualities that distinguish him from others. While “character” and “reputation” are often used synonymously, they are different in that “character” is what a man is, and “reputation” is what people believe he is.


v. Hire, rent or lease for a temporary use.


n. The authority by virtue of which an organized body acts. In respect of a corporation, refers to certain rights, liberties or powers given to it under contract between the state and the corporation, between the corporation and the stockholders, and between the stockholders and the state.

Bare Boat Charter

Charter where only ship is provided by ship owner. Person chartering ship is responsible for providing personnel, insurance and other necessary materials and expenses.

Time Charter

When vessel is leased for a specific time rather than for a specific voyage.


The contact evidencing the agreement of a shipowner to lease his vessel to another person or firm for the conveyance of goods.


Property other than real property.

Personal Chattel

Moveable things. Personal property other than real estate.

Real Chattels

Property that concerns real property.

Chattel Lien

For benefit of those who expend labour, skill or materials on any chattel or furnishing storage thereof at request of owner, his agent, reputed owner, or lawful possessor. See Artisan’s Lien.

Chemical Still Operator’s Bond

Excise Bond guaranteeing that the Excise Act will be complied with, that proper accounting will be performed, and that duties and penalties will be paid.


A band draft promising to pay a certain amount of money to the payee. It is signed by the maker and is payable on demand.

Blank Cheque

Cheque with is signed but left blank where payee and/or amount is indicated.

Cashier’s Cheque

Same as certified cheque.

Personal Cheque

Cheque drawn on an individual’s bank account.

Post-Dated Cheque

Cheque which is dated after the date it is issued, and is payable on the stated date.

Child In law

offspring of parentage; unborn or recently born human being. At common law one who had not attained the age of fourteen years, thought the meaning now varies in different statutes.


Usually used before a date when the exact time is not known; e.g. circa 1900.


Regarding private rights and remedies sought by civil actions as distinguished from criminal proceedings.

Civil Action

Generally, all kinds of actions except criminal proceedings. Normally brought to enforce, redress, or protect private rights.

Civil Authority

In insurance, has been defined to mean “any person acting under the authority of the Governor General in Council of Canada or the Lieutenant Governor in Council of a Province, and/or any person acting with authority under a Federal, Provincial or Territorial legislation with respect to the protection of persons and property in the event of an emergency.”(Mass Evacuation Endorsement, IBC 11361/89)

Civil Code

The civil law of the province of Quebec which embodies the civil law of France.

Civil Commotion

A wild and irregular action of many people assembled together.

Civil Disorder

Any public disturbance involving three or more persons causing acts of violence which result in damage or injury or threat of damage or injury to others.

Civil Jury

Trial Civil action trial conducted before a jury instead of a judge.

Civil Law

The body of law concerned with civil or private rights and remedies, as contrasted with criminal law which deals with wrongs against society.

Civil Liability

Being amenable to civil action rather than to criminal prosecution.

Civil Nuisance

Anything done to hurt or annoyance of lands, tenements, or hereditaments of others.

Civil Offense

Violation of a statute making the act a public nuisance.


A demand by an individual or corporation to recover under a policy of insurance for loss which may come within that policy or may by a demand by an individual against an insured for damages caused by an event covered by a policy held by him. It frequently refers to the amount of the claim.

Claim Adjuster

Employee of insurance company or independent person or firm who negotiates and settles claims against the insurance company.

Claim Agent

In marine insurance, a person authorized to survey and certify losses, but does not have the authority to pay such losses.


One who makes a claim.

Claim Expense

Expenses incurred, other than salaries r other remuneration paid, while working on a claim and which are normally charged to that claim.

Claim Reserve

Amount of money set aside by an insurance company for reported but unpaid claims and incurred but not reported claims, including claim expenses.

Claims Examiner

Insurer’s employee designated to handle incoming claims.

Claims Made Basis

Provision in some contracts of insurance and reinsurance covering only claims made during term of the contract.


A group of persons or things sharing common characteristics.


Arrangement into groups according to established criteria.

Classification Of Risks

In fire insurance, the term used to designate the nature and situation of the insured articles, and in accident insurance to the occupation of the applicant.

Class Action

Means by which one or more of a large group of persons interested in a single matter may sue or be sued as representatives of the class without needing to join every member of the class.


Term used to identify a particular part of a policy or endorsement.

Clean Bill Of Lading

A bill of lading on which the carrier has made no indication of any problems with the condition of the cargo at the time of acceptance for carriage.


Free from encumbrance, obstruction, burden or limitation.


In maritime law, the right of a ship to leave port.

Clear Market Value

See Fair Market Value.

Clear Space (Detachment)

Generally, in commercial property insurance policies, means the distance between the insured building or building containing the property insured form other commercially rated exposures.

Clear Title

Title free form encumbrance, obstruction, burden or limitation.

Client Satisfaction

The result of the emphasis on internal service quality and employee satisfaction.

Closed Insurance Policy

An insurance contract in which the terms and rates cannot be changed.


A group of brokerages who have band together or cluster, to share “back room” services such as processing and technology.


Coaching is a planned, methodological process performed by a manger to introduce and train an employee or to help improve the performance of an employee regardless of their level of experience or expertise.

Coastal Waters

In inland marine insurance, the waters of bays and inlets, as well as of the sea, along a coast.


A number or other symbol possessing a meaning, e.g. type and class of business, age of drivers and other information are set down in general classifications which are reduced to an identifying code number.

Code Civil

The code which embodies the civil law of France.


More than one person being sued in the same litigation.


Compelled to comply.


Actual or implied compulsion to do what one’s free will would refuse.


Information entrusted to the broker to be kept in the strictest of confidence.


Fiduciary serving jointly with another.


Faculty of knowing, perceiving, conceiving, as opposed to emotion and volition.


To live together as husband and wife.

Coinsurance Clause

A clause in certain property insurance policies which provides for the application of a penalty for partial losses when owners of property fail to insure, as a minimum, to the percentage of the value of such property as specified by the insurer, e.g., 80, 90 or 100 percent.


Person Insured by property policy who suffers a coinsurance penalty and who, consequently, bears a part of the loss himself. Hence, a coinsurer.


Working together on a joint endeavour.


Falling in of building.


(a) Property which is pledged as guarantee that a debt will be repaid.(b) Security such as cash or mortgages given to a surety to induce it to issue a bond which it would not otherwise issue.

Collateral Loan

Loan secured by pledge of specific property.

Collateral Security Agreement, Collateral Receipt

Contract between surety and party depositing collateral giving the surety the right to reimburse itself by cashing the collateral in the event of a loss under the bond.

Collateral Sources Doctrine

Doctrine providing that any compensation received by an injured plaintiff from a source independent of the wrongdoer will not reduce or mitigate damages he is otherwise entitled to recover.


To clash. See Collision.


An impact or sudden contact of a mobbing body with an obstruction, whether moving or stationary. In marine insurance, physical impact between two or more ships or vessels.

Collision Of The Load

Some insurance policies which insure merchandise in transit by motor truck stipulate that collision damage to the merchandise is covered only if the vehicle itself collides with something.


An agreement between two or more persons to secretly defraud another.

Collusive Loss

Loss caused by dishonest employees acting together.

Combination Plan Reinsurance

Quota share and excess loss reinsurance indemnifying ceding company for amount of loss on each risk a defined retention, subject to a defined limit and, (b) fixed quote share percent of remaining losses, excluding excess recoveries on each risk.

Combined Ratio

The total of the expense ratio and loss ratio an insurer over a specified period of time.

Coming To Rest Doctrine

In automobile liability policies, with respect to loading and unloading clauses, coverage ceases when goods have actually come to rest and every connection of motor vehicle with respect to unlading has ceased.


To authoritatively direct.


To start.


The buying, selling and exchanging of goods.


Relates to business and commerce.

Commercial Blanket Bond

Bond issued for a fixed amount which protects an employer against loss through dishonest acts of his employees.

Commercial Broker

One who, without having possession or control of it, negotiates the sale of merchandise.

Commercial Frustration

If contract is rendered impossible by act of God, law or other party, excuse of party from performance of such contract.

Commercial General Liability Policy

Policy which provides broad coverage for claims made against insured for bodily injury or damage to property of to others for which he may become liable and which arise out of his business operations.

Commercial Impracticability

Either party to a contract can be excused from performing the contract if three conditions are present

(1) a contingency must occur, (2) performance must thereby be made “impracticable,” and (3) the nonoccurrence of the contingency must have been a basic assumption on which the contract was made.

Commercial Insolvency

When a business person is unable to pay debts s they become due.

Commercial Insurance

Insurance policies designed to insure exposures of a business.

Commercial Invoice

Document issued by the seller to the buyer which gives details of merchandise sold, number of units being shipped, per unit cost and the terms of sale.

Commercial Motor Vehicle

Vehicles used primarily for business and industry.

Commercial Property Floater

A form of insurance which covers business property which is required to be moved from place to place. Usually written on special forms suited to the particular need such as contactor’s equipment floater, inland marine block policy, etc.

Commercial Property Insurance

Policy designed to insure real and personal property of a business.

Commingling Of Funds

Combining funds of a fiduciary with those of his client or employer, generally considered to be a breach of his fiduciary relationship.


Compensation based on percentage of the amount of all transactions or on the profit to the principal.

Commission Of Authority

Written document which sets out the powers that a company grants to its agent.

Commission Merchant

One who receives and sells goods for a commission.


Shared equally by more than one. Happening often.

Common Area

In common law, the portion of the premises over which the landlord retains control, e.g., hallways, and, hence, for whose conditions he is liable. Also refers to areas in common use by residents of condominium.

Common Carrier

Includes airlines railroads, trucking companies and others that, for compensation, furnish transportation to any member of the public seeking their services.

Common Good

Generally refers to the betterment of the general public.

Common Hazards

Certain hazards or conditions common to all buildings which influence their potential for loss.

Common Law

The common law comprises the body of principles and rules of action which derive their authority from the universal consent and practice of the people over the years. Distinguished from law created by the enactment of legislatures. Opposite to statutory and criminal.

Common Law Liability

Obligation established under common law, breach of which may require compensation.

Common-Law Marriage

Either of two person who are living together in a conjugal relationship outside marriage and have so lived together continuously for a period of three years or, if they are natural or adoptive parents of a child, for a period of one year.

Common Nuisance

A nuisance which affects the rights enjoyed by all citizens.

Common Property

(a) Property held by two or more persons in common with each other.(b) Portion of tented premises over which landlord retains control but which is used by tenants.

Common Right

The rights and privileges enjoyed equally by all citizens.

Common Wall

Wall shared buy two contiguous structures.

Commutation Clause

In reinsurance, provides for the estimation, payment and discharge of obligations for reinsurance losses.

Comparative Negligence

Whereby negligence is measured in terms of percentage, and awarded damages are diminished in proportion to amount of negligence attributed to the person seeking such damages.


That which is necessary to make good the loss a person has suffered. Also commonly used to refer to remuneration for services rendered.

Compensatory Damages

See Damages.


Regarding contracts, of legal age with no mental disability.


Possessing sufficient ability or authority; qualified; has the required natural or legal qualifications.


One who files a complaint with the courts.


The initial pleading by which a legal action is begun.


To finish.

Completed Operations Insurance

A method of accounting which reports gross income and expenses in the tax year in which the contract is completed.

Completed Value Insurance

Coverage, amount of which is derived from contract amount and which is adjusted to final insurable original contractor defaulted.

Completing Contractor

Contractor who completes project supported by surety because original contractor defaulted.




State of being an accomplice in a crime.


Act in accordance with.

Composition Roof

A roof that is made of usual roofing materials such as asphalt shingles, asbestos shingles or tar paper roofing. Term dose not refer to non-combustible slate roofs, tile roofs, metal roofs, or wood shingle roofs.

Comprehensive Automobile Coverage

Physical damage coverage option for automobiles which insures against loss or damage resulting from numerous causes including fire, theft, windstorm, flood and vandalism. Loss by collision or upset is usually specifically excluded.

Comprehensive Dishonesty, Disappearance and Destruction Policy

Frequently called a 3-D policy, a broad form of blanket Fidelity Bond extended to cover other allied risks such as burglary, forgery etc.

Comprehensive Personal liability

Policy which provides broad coverages for claims made against insured for bodily injury or damage to property of others for which he may become liable and which arise out of non-business related activities. Liability arising out of the use of automobiles is specifically excluded.


To include, contain.

Compromise And Settlement

Where two or more persons agree to refer their legal dispute to decision of a designated third person, called an “umpire” or “arbitrator”.

Compulsory Insurance

Any form of insurance which is required by law, e.g. motor vehicle liability coverage which is required in all provinces, Workers’ Compensation Insurance which must be in effect before certain workers may be hired.

Computer/Data Processing (EDP) Floater

Computers and other Electronic Data Processing and Media, may be covered with this floater. Covered items include data processing equipment, data processing media (diskettes, tapes, software), and reproduction of data, extra expenses and loss of income due to the loss of use of the computer systems and its effect on your income.


Withholding knowledge from others; to prevent discovery of.


The withholding of facts materially affecting an insurance risk or loss.


To pertain to; be of interest to.


When one acts with another to bring about a preconceived result.


Settlement of a dispute in a friendly manner. Used in labour disputes prior to arbitration.



Conclusive Evidence

Strong and conclusive evidence that does not permit contradiction.

Concomitant Actions

Civil actions which are brought together generally for same type of relief.


To agree


Agreement; a meeting of minds.


Running together or contributing to the same event.

Concurrent Causes

Those causes which act together so as to cause injury or damage which would not have resulted in the absence of either. Two distinct causes, operating simultaneously, to produce a given result.

Concurrent Insurance

Two or more insurance policies, with the same conditions which cover the same interest in identical property, are concurrent. Also applicable where two bonds, not necessarily identical in their provision, provide common coverage for the same interests.

Concurrent Liens

Two or more liens on the same property which possess the same priority.

Concurrent Negligence

Negligence of two or more persons which produces a single injury.

Concurrent Tortfeasors

Those whose negligent acts combines to injure a third party.

Concurring Opinion

An opinion of one or more judges which agrees with the decision of the majority of the court but offers independent reasons for reaching that decision.


A condition imposed upon insureds under the policy requires them to do or not to so something during the term of the policy.


That which is dependent upon or granted subject to a condition.

Conditional Promise

In law of contracts, a promise to perform based on condition.

Conditional Sale Contract

Contract for sale in which seller reserves title until buyer pays for goods.

Conditional Sales Floater

Inland marine form of insurance which insures property which has been sold conditionally or on an installment payment plan.

Conditions Of The Contract

Contract’s articles defining terms and responsibilities of all parties.


System of separate ownership of individual units in multiple-unit building, together with a percentage interest in that part of the total property owned jointly by all unit owners.


The forgiving of an offence, especially by ignoring or overlooking it


v. To manage; do business.


n. Personal behaviour.


Channel or pipe carrying fluids. Tubing carrying and protecting electrical wires.


Shut in or imprisoned.


The government’s seizure of property for public use.


Unusually large fire. Fires dealing with two or more risks or extending over large area.

Conflagration Area

Area that has suffered a conflagration or, because of its physical makeup, may be subject to a conflagration.


Goods or conducts which are in accordance with the obligations under the contract.


In civil law, a blending or intermingling.

Confusion Of Goods

When goods belonging to two or more owners become intermixed so they can no longer be recognized as belonging to any one owner.


To join or fasten together.


A voluntary blindness; intentional failure to discover or prevent the wrong; passive consent.


Is the inner awareness of right and wrong and the sense of personal integrity.


Succeeding one another in regular order.


Voluntary agreement by a person who possesses sufficient mental capacity to make an intelligent choice.

Express Consent

Written or oral consent directly given.

Implied consent

Presumption based on signs, actions, or facts, that consent has bee given.

Consent Of Surety

Written undertaking by surety guaranteeing the owner that the surety is agreeable to issuing such bonds as are specified to ensure the performance of the contract if the contractor’s bid is accepted and he has entered into a contact with the owner.


The result of an event.

Consequential Loss

A loss not directly cause by damage to property but which arises as a result of such damage, as in the case of food spoilage from refrigeration failure resulting from fire damage to refrigerator.


To save and protect from loss or damage.


The reason a party will enter into a contract. An essential part of a binding contract. Can be either expressed or implied. Whatever is being paid for the article or contract is called “the consideration.”


Hand over or deliver to. To give in trust. To entrust with another to be sold, disposed of, or called for.


One to whom a consignment is made. Person or firm to whom cargo is shipped.


Goods entrusted to another to sell for the consignor. A bailment for sale.

Consignment Contract

Agreement that consignee will pay consignor for any sold goods and will return any goods unsold. A bailment for sale.

Consignment Bond

Bond guaranteeing return of consigned property if not sold, or if sold, a proper accounting of proceeds.


Shipper of goods. Person named in bill of lading as one from whom the goods have been received for shipment.


When two or more persons join to perform an unlawful or criminal act.

Civil Conspiracy

Joint attempt to defraud or cause injury to person or property, which results in damage to the plaintiff.


Engage in conspiracy.


Being restricted


To build. Different from “maintain”, which means to preserve.


Creation of something new as distinguished from the repair or improvement of something already existing.

Construction Contract

Contact in which construction plans and specifications are part of the contract itself. Commonly secured by performance and payment bonds.

Constructive Total Loss

Position which exists when the cost of salvaging the lost or damaged property is too high relative to the value saved. In such instances, the property has lost its total usefulness so as to render it valueless to the insured.


To put together.

Consumer Protection Bond

License bond which protects the general public against fraudulent acts and misrepresentation of direct sellers, travel agents, auto dealers, collection agents, etc.


Mixing with or coming into contact with a foreign substance to cause a state of impurity.


Disobedience or a willful disregard of a public itself.

Contents Rate

Referring to the insurance rate on the contents of a building rather than on the building itself.


v. To defend an adverse claim in a court of law. To litigate.


Parts of the text in a statute, contract, will, etc., which immediately precede and follow it.


Adjoining or neighboring.


Relating to a continent.


An event which may occur; the possibility of coming to pass.

Contingency Contract

A contract which is dependent on the happening of a contingency.

Contingency Insurance (Seller’s insurance)

A secondary insurance coverage which will protect an insured’s financial interest if the primary insurance coverage effected by others dose not respond for a covered loss.

Contingency Reserve

Money set aside to cover possible liability.

Contingent Business Interruption Insurance

Provides coverage for loss due to interruption of business by insured peril occurring at another’s premises, e.g., supplier or large customer.

Contingent Commission

Commission paid to agent which depends upon the profit the insurer has realized from his business.

Contingent Liability

The liability imposed upon an individual, corporation or partnership because of accidents caused by persons other than employees for whose acts the first party may be responsible.

Continuation Certificate

Notice of a bond’s or policy’s renewal or premium payment.

Continuing Professional Development

A formal procedure by which a professional body ensures that its members keep their expertise up to date with current developments.


Uninterrupted; unbroken.


Opposite to.


Property which is unlawful to produce or possess.


An agreement between two or more persons which is enforceable at law, which creates an obligation to do or not to do a particular thing.

Contract Bond

In general terms, a surety bond guaranteeing the performance of a contact.

Contract Carrier

A Carrier that carries, for pay, the goods of certain customers only as contrasted to a common carrier which carrier the goods of the public in general.

Contract Documents

All documents relating to a contract including agreement, addenda, supporting documents, general conditions, supplementary conditions, specifications, drawings and modifications.

Contract Law

Is a voluntary exchange of promises obliging each party to an action or to refrain from an action.

Contract Not To Compete

Employee’s agreement not to compete with his employer for a stated period of time and within a specific geographical area after he leaves his employ. Such contacts are enforceable if the time span and area are reasonable.

Contract Of Affreightment

Contract for hiring a vessel.

Contract Of Insurance

A contract wherein one party, for a consideration known as a premium, assumes a risk of loss or liability that rests upon the other.


Commonly refers to one who, for a price, provides work or a service, or furnishes goods for the public, a company, or an individual.

General Contractor

One who is responsible for the entire job.


One who is responsible for only a portion of the job.

Contractor’s Equipment Floater

Policy which insures against loss or damage to moveable equipment and tools of contractor.

Contractor’s Liability Insurance

Protection for contractor form defined liability claims arising from his operations.

Contractor’s Protective Liability

Liability insurance protecting the contractor in the event of claims resulting from operations conducted on his behalf by independent contractors or subcontractors.

Contractor’s Questionnaire

Surety’s detailed form which contractor completes to enable surety to decide whether or not to bond the contractor.

Contractual Liability

Liability assumed in a contract or agreement.

Contractual Transfer

a means of generating funds from out side the business to pay for losses. An organization may shift its legal and financial responsibility for loss from an asset or particular activity to others by way of contractual transfer.



Contra Proferentem

A legal term which provides that any ambiguity in a contact be interpreted against the person who drew the contract since he was the one who selected the language.



Contrary To Law

Against the law.

Contributing Cause

Factor which contributes to a result.

Contributing Negligence

Is where the plaintiff’s action contributed to the loss.

Contributing Property One

Upon which the insured is dependent for materials or goods.


The sharing of a loss or payment among several.

Contribution Clause

Provides where more than one policy in effect, insurers shall share such loss proportionally in accordance with their policy limits.

Contributory Negligence

Conduct by plaintiff which is a contributing cause which cooperates with the defendant’s negligence in causing the plaintiff’s harm.

Contributory Value

In marine insurance, the value of property saved as a result of a General Average Act which forms the basis for determining each party’s contribution in General Average.


Device which has been arranged to deceive.


v. To regulate.


n. Power or authority to regulate.




From of theft which includes any unauthorized act which deprives an owner of his property permanently or for an indefinite time.


Deliver or transfer to another.


Act together toward to another.

Cooperation Clause

Provision which requires the insured to cooperate with the insurer in defense of a claim.


Corporation or association which renders economic services to shareholders or members who own and control it, without again to itself.


Two or more persons who own property.


Reproduction of an original.


The right of literary property recognized by law, whereby the originator of the work or production is invested for a limited time with the sole and exclusive privilege of multiplying copies of the same and publishing and selling them. Works of authorship include (a) literary works; (b) musical works; (c) dramatic works; (d) dance works; (e) pictorial, graphic, and sculptural works; (f) motion pictures and other audiovisual works; (g) sound recordings. Copyright protection for an original work of authorship does not extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.


A secondary consequence.

Corporal Punishment

Physical punishment.

Corporal Touch

Belonging to a corporation.

Corporate Agent

Person or corporation who is authorized to act for a corporation.

Corporate Charter

Document issued by jurisdiction granting legal existence and right to function as a corporation.

Corporate Name

Legal name under which a corporation may sue or be sued and do all legal acts.

Corporate Officers

Officials of the corporation.

Corporate Surety

Surety or insurance company licensed to conduct surety business.


An artificial person or legal entity composed of numerous individuals. Legally vested with the capacity of continuous succession, and or acting as a unit or single individual in matters relating to the common purpose of the association, within the scope of the powers and authorities conferred upon such bodies by law.

Corrected Policy

Policy issued to correct misstatements in initial policy.


To add credibility by additional and confirming facts or evidence.


Expense or price.

Cost And Freight (C.A.F.)

Sales price includes cost of goods and freight.


A payment made to successful party, and recoverable from the losing party, for his expenses in prosecuting or defending an action.

Costs Bond

Bond guaranteeing payment of court costs in event of judgment against party providing bond; also may be required of an appealing party in civil case.

Costs, Insurance And Freight (C.I.F.)

Sales price which includes cost of goods, freight and insurance.


Two or more sureties to the same obligation.

Count Bill of Lading

Bill of lading which shows the actual number of units being shipped.

Counter Claim

Whereby in the same law suit the defendant files a counter claim in opposition to or deduction from the claim of the plaintiff. Both claim and counter claim are heard at the same time.


To make a copy without authority or right and with a view to deceive or defraud by passing such copy as original or genuine.

Counter Offer

Whereby the offeree rejects the offer and propose a new offer to the offeror.

Counter Replevin Bond

Bond guaranteeing costs and damages in connection with replevin proceedings.


In insurance policy, signature of agent which authenticates facsimile printed signature of a company officer.

Country Damage

In marine insurance, damage caused by dirt, mud, etc., to commodities before they are shipped.

Course Of Business

That which is normally done in the management of business.

Course Of Employment

In the doctrine that an employer is liable for the torts of his employee done “in the course of his employment”, this term means while engaged in the service of the employer and performing the employer’s work, as distinct from the employee’s acts not connected with his employer’s business.

Course Of The Voyage

The regular, customary and shortest way which a ship takes in going from one port to another.

Course Of Trade

That which is ordinarily done in the management of business.


A government organ which applies the law and where justice is administered.

Appellate Courts

Review decisions of inferior courts may be either courts of appeals or supreme courts.

Civil And Criminal Courts

Civil courts adjudicate controversies between individual parties; criminal courts administer criminal laws, and mete out punishment.

Court Of Competent Jurisdiction

One having jurisdiction under the Constitution and/or laws to determine the question in controversy.

Court of King’s (or Queen’s) Bench

In English law, the supreme court of common law in the kingdom.

Court Of Probate

A court having jurisdiction over the probate of wills, the grant of administration, and the supervision of the management and settlement of the estates of decedents.

Court System

The network of courts in particular jurisdiction.


A written agreement wherein one party pledges to do something or to abstain from doing something.


Protect with insurance


Amount and extent of risk covered by insurer.

Cover Note

Written statement by insurance agent or broker that coverage is in effect. Different form binder, in that a binder is prepared by the company.

Credit Card Loss Insurance

Covers against loss stemming from the misuse of lost or misappropriated credit cards.

Credit Check

Checking the credit rating of those clients requesting credit terms.

Credit Insurance

Policy which indemnifies the insured against failure to collect money due him as a result of death, disability, bankruptcy or insolvency of persons to whom credit is expended.


A person to whom a debt is owed.

Credit Report

Report provided by a commercial credit reporting company which provides details on the reputation and financial strength of an individual or corporation.

Credit Union

Cooperative association that accepts deposits from a closed group of persons (e.g. fellow employees) and lends it out again to persons in the same group.


An act which is illegal.


n. One who has been convicted of a crime.

Criminal Charge

An accusation of crime which results in a prosecution.

Criminal Gross Negligence

Gross negligence is culpable or criminal when accompanied by acts of commission or omission of a wanton or willful nature, showing a reckless or indifferent disregard of the rights of others, under circumstances reasonably calculated to produce injury, or which make it not improbable that injury will be occasioned, and the offender knows or is charged with knowledge of the probable result of his acts; “culpable” meaning deserving of blame or censure.

Criminal Negligence

The failure to use the degree of care required to avoid criminal consequences.

Criminal Law

The body of law which for the purpose of preventing harm to society, (a) declares what conduct is criminal, and (b) prescribes the punishment to be imposed for such conduct. It includes the definition of specific offenses and general principles of liability. Substantive criminal laws are commonly codified into criminal or penal codes.

Critical Illness Policy

A policy that provides a lump sum payment to the insured should he/she be diagnosed as having one of a number of specific illnesses, conditions or diseases.

Critical Success Factors

Key elements, at which the brokerages will need to excel to ensure the successful development and implementation of a client relationship management strategy.

Cromie Rule

One of several rules used by adjusters to apportion losses between non-concurrent policies.

Crop-Hail Insurance

Insures financial loss due to destruction of growing crops by hail and other perils such as fire, windstorm, lightning, etc.

Crop Insurance Insures

Against loss due to the failure of crops to produce properly. Extends beyond crop-hail insurance to insure loss due to drought, frost, etc.


Liability Means “the insurance provided under the policy applies separately to each person insured.”

Crown Lands

Lands belonging to the government or nation.


To compress between two hard bodies.


Civil law term meaning fault, neglect, or negligence.






One accused or charged with a crime.


Forming an aggregate; two things to be added together.


Coins and paper money authorized by law which circulates as the medium of exchanged.

Current Assets

Assets that can be quickly converted to cash, usually within a one year period.

Current Liabilities Debts

Whose payment is expected to occur within one year.

Current Market Value

The price an article will fetch on the open market.

Current Ratio

Ratio of current assets to current liabilities.


Normally includes the insured, any partner, or any employee authorized by the insured to have the care and custody of the insured property.


The care and control of a thing or person.

Custom And Usage

A practice which, because of common adoption and long habit, has become compulsory and has acquired the force of a law.

Custom Farming

Use of insured’s farm machinery or equipment for others away from insured’s farm remises for compensation. It does not include work done for others in return for work done by them.


According to usage.

Custom Duties

Tax assessed on the importation and exportation of merchandise.

Customers’ Goods

Goods belonging to insured’s customers in his custody as a bailee for the purpose of his trade.

Customs Broker

Generally, person whose function it is to handle the process of clearing goods through customs. In marine insurance, firm which specializes in clearing imported merchandise for transit to the interior. Normally responsible for obtaining and submitting all documents for clearing merchandise through customs and arranging inland transport as well as paying all charges related to these functions.

Customs Entry Form

A form required by Canada Customs for all merchandise entering Canada. It indicates country of origin, description of merchandise and amount of estimated duty to be paid before merchandise is released by customs.


Provision in reinsurance contact stating that reinsurer is not liable for losses occurring after date of termination.



Daily Report (D.R.)

An Abbreviated copy of pertinent policy information, identical copies of which are usually prepared so that the insurance company’s home office, branch office, and agents may each have one.


An amount of money awarded to the person injured by another’s tort.

Actual Damages

The amount awarded to compensate for one’s actual and real loss or injury.

Compensatory damages

Damages Intended or compensate the injured party for the injury sustained, and nothing more.

Consequential Damages

Such damage, loss or injury as does not flow directly and immediately from the act of the party, but only from some of the consequences or results of such act.

Continuing Damages

Such as accrue from the same injury or from the repetition of similar acts between two identified time periods.

Direct Damage

Those that follow immediately upon the act done.

Excess Liability Damages

Arise from an action against a liability carrier by an insured for the negligent handing of settlement negotiations which result in a judgment against the insured in excess of his policy limits.

Expectancy Damages

Awarded for non-performances of contract.

General Damages

Awarded for losses that have occurred as a result of an infringement of a right, such as breach of contract or personal injury. For example, an accident might give rise to pain and suffering; compensation for this would be considered general damages. Such damages cannot be quantified with precision in monetary terms, but reflect an amount the court believes necessary to compensate the aggrieved party fairly.

Nominal Damages

A minimal amount awarded where there is no substantial loss or injury to be compensated, but where it is recognized that a plaintiff had a technical invasion of his rights, or in cases where there has been a real injury but the plaintiff failed to show its amount.

Pecuniary Damages

Where loss or injury can be recompensed in money.

Proximate Damages

The immediate and direct damages and natural results of the act complained of, and such as are usual and might have been expected.

Punitive Damages

Meant to punish the party that has caused the infringement of the other party’s legal rights. Awarded over and above compensation for monetary loss. Awarded when the wrong to the plaintiff was aggravated by violence, oppression, malice, fraud, or wanton and wicked conduct on the part of the other party. They are intended to solace the injured party for mental anguish, shame, or degradation caused by the other party.

Remote Damages

The unusual and unexpected result which could not have been reasonably anticipated – a result beyond which the negligent party has no control.

Special Damages

Awarded for actual out-of-pocket expenses the party has suffered as a result of the infringement of his legal right, e.g., medical bills.

Statutory Damages

Damages resulting from statutorily created causes of action.


Unsafe; hazardous.

Dangerous Occupation

Hazardous work.

Dangers Of The Sea

Those accidents peculiar to navigation that are of an extraordinary nature which cannot be guarded against by the ordinary exertions of man.


Generally, organized information collected for a specific purpose. In electronic data processing insurance policies, can mean the information stored on the media, including customized and packaged computer programs, and the instructions or operating systems employed to make the programs work.


A database is a collection of information about current and prospective clients that is usually stored in computer files that are accessible to various personnel within the organization.

Date Of Injury

The data of the occurrence or accident causing such injury.

Dead End Main

The last fire plug on a water main which is subject to a greater risk of clogging and some drop in water pressure. Considered by underwriters on fire risks.

Death Benefit

Amount indicated in policy representing amount that will be aid in the event of death, also referred to as “principal sum”.

Debris Removal

Provision commonly found in property insurance policy providing coverage for cost of debris removal after an insured loss.


Sum of money owed to one person from another.


One who owes a debt. Anyone liable on a claim.


A fraudulent misrepresentation intended to deceive or trick another who is ignorant of the true facts.


Intentional misleading by spoken or acted falsehood. Synonymous with fraud.

Deceptive Sales Practices

Use of some measure of deceit in sale of goods or services.


Concrete floor or roof slab or form for a concrete floor or roof slab.


Portion of insurance policy containing the information regarding the risk, on the basis of which the policy is issued. In marine insurance, form used by insured in reporting shipments under an Open Cargo Policy when no evidence of insurance is required. Also, statement signed by insured warranting that information given by him is true.


Statements included in policy which are agreed to by the insured and form the basis of the contract of insurance.


The refusal of the insurance company to accept an application for insurance.

Decreasing Term Insurance

Temporary life insurance in which the amount payable on the death of the insured reduces yearly according to a predetermined formula.


Judgment or order of the court.


The specific dollar amount or percentage of the insured value to be borne by the insured before he is entitled to recovery from the insurer.

Deductible Clause

A clause providing that insured will pay first part of any insured loss, with the balance being paid by the insurer.

Deduction For New

In marine insurance, an amount credited to the insurers on the cost of repairing a Bessel for damage arising from the perils of the sea insured against. Usually one-third, made on the theory that parts restored with new materials are better in that proportion than they were before the loss.


A writing signed by grantor, whereby title to real property is transferred from one to another.


To believe; treat as if; construe.

De Facto

In fact; indeed; actually


A statement that causes unjustified to the reputation of another person and which results in the loss to that person and which results in the loss to that person of the esteem, confidence, respect and goodwill of a considerable part of the community. Includes both libel and slander; may be criminal as well as civil.


Failure to abide by the terms of an undertaking or contract.


A deficiency in something essential to the proper use for the purpose for which it is sold and used.


Something is “defective” If it is not fit for ordinary purposes for which it is sold and used.

Defective Condition

Something is in a defective condition when it’s use may cause physical harm which would not ordinarily be contemplated by the consumer.

Defective Work

Work not performed in compliance with contract documents.


To represent a defendant in a legal proceeding.


The person against whom a suit is commenced, or the accused in a criminal case.


A defendant’s response to a plaintiff’s Statement of Claim in which he seeks to provide a reason(s) in law or fact why the plaintiff should not recover or establish what he seeks.

Defense Statement Of Outlines

which allegations made by the plain riff in the statement of claim the defendant admits to be true, denies are true, or has no knowledge of because their Validity is unknown to the defendant. May also include the defendant’s version of the facts.

Deferred Premium Payment Plan

Plan which provides for payment of premium over a specified length of time.


An excess of expenditures over revenues.


To knowingly or recklessly make a misrepresentation of an existing material fact which is relied on by another to his damage.




One delegated to act in the stead of another.


To erase.


Wilfully, with premeditation.

Demographic Information

Categories most often used for marketing. (i.e. age, gender, family life cycle, education, occupation, religion, ethnic origin and income)


One who demonstrates in public to support and to enlist support for cause.


In maritime law, the extended freight and amount payable for delays by receiver in loading or unloading cargo.


The belief that actions are morally right or wrong independent of their consequences.

Deposit Insurance

Coverage protecting bank depositors form loss resulting form bank failure.

Deposit Premium

The premium deposit required by the insurance company on those forms of insurance subject to periodical premium adjustment.

Depositor’s Forgery Bond

Coverage to a person or corporation to protect against losses by reason of forgery or alteration of any cheque, draft, etc.


Place where something is deposited or stored, e.g., bank, credit union.


The amount of decrease in the value of property over a period of time due to use, wear, tear and obsolescence.

Accelerated Depreciation

Methods of depreciation that yield larger deductions early in life of an asset.

Declining Balance Method

The annual depreciation allowance is found by multiplying the undepreciated cost of the asset each year by a uniform rate up to double the straightline rate or 150 percent, as the case may be.

Original Cost Method

Amortization of asset based on its cost, less salvage.

Replacement Cost Method

The cost or other basis of the asset, less its estimated salvage value, if any, is determined first; then this amount is distributed in equal amounts over the period of the estimated useful life of the asset.


Voluntary abandonment of goods by its owner.

Derivative Action

Lawsuit that permits other interested parties to take action on behalf of the corporation have misused the assets.

Description Of Risk

Particulars of a risk, e.g., construction, location, and occupancy of a building.


An act which renders the subject useless for its intended purpose.


Not joined to another structure on either side.


See Clear Space.


Keeping back or withholding a person or thing, whether done intentionally or not.


In a commodity, an impairment involving some degeneration in the substance of the thing, such as that arising from decay, corrosion, or disintegration.

Development Bond

Bond in favour of municipalities or others guaranteeing the financing and construction of infrastructures such as streets, sewers, etc.


A variance from the risks insured against, without necessity or just cause, after the risk has begun, which may void the viability of the insurer.

In marine insurance, a vessel making a voluntary, unnecessary or unexcused departure without reasonable cause from the course of he voyage insured, or an unreasonable delay in pursuing the voyage, or taking some other course than that described in the policy.


A scheme to trick or deceive.


To contrive or plan.

Difference In Conditions Insurance (DIC)

Policy designed to protect insured from catastrophic losses not covered by basic property coverage. The DIC was originally intended as a “gap filler” or as an “all risks” form, providing coverage where more common basic property forms left off and reducing the chance of an uninsured loss. The DIC basically extends the “perils covered” and is not intended to provide coverage in excess of otherwise inadequate property limits.

Differential Advantage

Any feature, service or product offered by the brokerage which differentiates it from others and provides an advantage because clients deem it as being important to them.


Intended to cause delay.


Attentive and persistent in doing something.

Common Or Ordinary Diligence

Degree of diligence which persons in general exercise in respect to their own concern.

Hi Or Great Diligence

Extraordinary diligence, or that which very prudent persons take of their own concerns.

Low Or Slight Diligence

That which persons of less than common prudence, or of any prudence, take off their own concerns.

Due Diligence

Measure of prudence as is to be expected from a reasonable and prudent person under the particular circumstances, i.e., not measured in accordance with any absolute standard but depending on the relative facts of the special case.


The potential change in value of an item.


adj. Immediate or proximate.

Direct Action

Right of an injured third party to sue an insurer directly.

Direct Billing

Where by the insurance company directly bills the insured for payment of premium.

Direct Cause

That which sets in motion series of events, without the intervention of another, which brings about result.

Direct Loss

One resulting immediately and proximately from the occurrence.

Direct Marketing

An interactive System of marketing which uses one or more advertising media to effect a measurable response and/or transaction at any location.

Direct Or Held Covered

In Marine insurance, a condition which requires the insured voyage to be direct from one place to another. If the voyage is delayed en route or if there is a deviation from the direct route, the insurance coverage continues subject to payment of an additional premium, but only if the assured gives prompt notice of the delay or deviation immediately on receipt of advices, unless the policy provides otherwise.

Direct Writer

Insurance company that sells direct to insured and not through intermediaries such as independent agents or brokers.

Direct Written Premium

Policy premium adjusted by additional or return premiums.


(a) A person who leads or controls; manager. (b) One of a group of persons chosen to direct the overall affairs of a company or institution.

Directors and Officers Liability Insurance

Protection for officers and directors of a corporation against damages resulting from negligent or wrongful acts in the course of their duties. Also covers the corporation for expense incurred in defending lawsuits arising from such acts.


When used in conjunction with Accident and Sickness insurance, may include actual incapacity to perform usual tasks encountered in one’s employment and physical impairment that may or may not e incapacitating.

Disability Clause

Clause providing waiver of premiums during period of disability.


Difference of opinion.


To release. Removal of obligation or liability.


Act of disclaiming, renunciation, disavowal.


Ant of disclosing.


Reduction in rate or the premium of features which improve the risk or for when several coverages are incorporated into one policy.

Discovery Period

The time permitted by the insurer, commencing with the expiry date of the policy (end of the policy period) in which a claim must be discovered by the insured if it is to be covered by the policy.


Unfair treatment or denial of normal privileges to persons because of their race, age, nationality, gender, marital status, religion, etc.


Illness not arising from accident or injury.


Anything which impairs the beauty or appearance of a person or thing.


Lack of integrity.


Loss of a limb.


Riotous or turbulent behaviour.

Disorderly Conduct

Generally any illegal behaviour that tends to disturb the public peace, scandalize the community, or shock the public sense of morality.


Generally, completion or settlement with speed. In marine insurance, the use of proper speed in discharge of a cargo.


Exhibition for effect.


Subject of litigation. A conflict.


In purchases, consignments, or contracts for sale of consumer goods, one which stands between the manufacturer and the retail seller.


An act which causes annoyance to another, interrupts his peace, or interferes with his ability to pursue a lawful and appropriate occupation.

Disturbance Of Peace

Conduct which tends to annoy all good citizens and anyone present not favouring it.


To turn aside. Usually refers to watercourses or to the unauthorized use of funds.


A portion of a company’s profits paid to shareholders.

Division Wall

Wall that meets certain standards and which effectively separates a building into two separate fire areas.

Dock Receipt

In marine insurance, a form issued by a carrier or his representative as evidence that merchandise was in fact received by the carrier for shipment. Often referred to as a Receipt for Shipment Bill of Lading.


A principle, or tenet of the law.

Doctrine of Agency

Involves one person, the principal, appointing another person, the agent, to act on the principal’s behalf.

Doctrine of Assignment

Is a means by which the benefits of a contract can be granted to another person.

Doctrine of Negligence

Based on the duty of all persons to exercise due care in their conduct towards others for which injury may result.

Doctrine of Privity

Only the parties to a contract have any rights or obligations under the contract.


An official form of something which may be used as evidence.


n. A household servant.


adj. Relating to a home.

Domestic Animals

Animals that live in or about dwellings or contribute to the support of a family.

Domestic Company

A Canadian company.

Domestic Servant

Person hired primarily to perform household duties, maintain the home, and care for members of the household.


One’s permanent home and principal establishment and to which whenever he is absent he has the intention of returning.


Refers to merchandise shipped in containers, trailers or vans from the original point of manufacture to the final destination. Same as House to-House.

Double Indemnity

In life insurance contract, provision requiring payment of twice the face amount of the policy in the event of death by accidental means.

Double Insurance

Occurs when one is insured by several insures separately in respect to the same subject and interest.


Time period of time between damage and repair where an economic loss occurs.


An order to pay bearer in money, signed by a drawer and payable on demand or at a definite time.

Sight Draft

Payable on presentation or demand.

Time Draft

Payable in specified number of days after sight or after presentation for acceptance.


n. A channel through which water flows off.

Drainage System

All pipes, public and private, conducting liquid wastes to a designated spot.

Dram Shop Act

Laws which hold sellers of intoxicating liquors liable when a third party is injured by an intoxicated buyer where the sale has caused or contributed to such intoxication.

Drive-In Claims Service

Service provided by some insurers whereby damaged vehicle is driven to a drive-in claims office for adjustment of a loss.


One who is actually doing driving.

Driver’s Abstract

A record of the driver history of the applicant and other drivers which can be obtained from provincial licensing authorities.

Driver’s License

Provincially issued certificate which authorizes a person to operate a motor vehicle.

Driver Training Credit

The premium rebate insurers grant to applicants for private passenger automobile insurance who have successfully completed an approved driver training program.

Driving While Intoxicated (DWI)

An offense committed by who operates a motor vehicle while under the influence of intoxicating liquor or drugs.


Medicinal substance, used alone or as ingredient; narcotic, hallucinogen, or stimulant.


Intoxicated; deprived of proper control of oneself by alcoholic liquor.

Dry Valve

The valve which allows water into an automatic sprinkler system.


(a) Wall covered with wallboard. (b) Wall constructed of rock without mortar.

Dual Obligee: More than one obligee on a surety bond, e.g., two owners; owner and financial institution; owner and municipality.

Dual Purpose Doctrine

Whereby if, during the course of his work an employee is required to travel, he is in the course of his employment while doing that work even thought at the same time he is serving some purpose of his own.


Reasonable, as in the phrased “due care,” “due process of law,” “due notice.”

Due And Proper Care

That care which is required of one for [prevention of the accident. See Due Care.

Due And Reasonable Care

That care which a reasonably prudent person would exercise under same or similar circumstances. See Due Care.

Due Care

The absence of negligence. That care which an ordinarily prudent person would have exercised under the same or similar circumstances. “Due care,” “reasonable care,” and “ordinary care” are often used interchangeably.

Due To

Caused by.

Dun & Bradstreet

Mercantile credit reporting company which supplies confidential information on businesses and their owners.


In risk management, the complete reproduction of the organization’s own standby asset or facility to be kept in reserve. This duplicate is not used unless the primary asset or activity is damaged or destroyed.


Any means used to coerce a person to act in a manner contrary to his free will.


After the beginning of and before the end of.


A legal or moral obligation to do a thing.

Duty To Act

Obligation to take action to prevent harm to another and for failure of which there may or may not liability in tort.

Duty to Cooperate

In accepting and signing the insurance policy, the insured usually has agreed to follow its conditions. One of the most important duties of an insured is to cooperate. This duty is identified in Statutory Condition, and in Conditions of most Commercial General Liability policies. Indeed, this condition is so critical insurers can cite a breach of this condition as a basis to deny a defense to an insured.


A structure used as a residence.



Earned Premium

The difference between premium paid by insured and the portion the insurance company must return to his if the policy is cancelled during its term; the amount of premium at anytime which pays for the coverage furnished by the insurance company during the expired portion of the policy term.

Earthquake Insurance

Coverage against damage by earthquake.


A right of persons to use land belonging to others, i.e., a right of way.

Economic Obsolescence

Loss of value of property due to economic developments, e.g., deterioration of neighborhood.

Educational Institution

An educational establishment, e.g., school, seminary, college, university.


v. To bring about.


n. Result, consequence.

Effective Date

The date an insurance policy comes into effect, or the date additional coverage come into force.


Generally, personal property but can included real property.

Efficient Cause

The cause which produces effects or results.


Liquid waste including industrial wastes and sewage.


The way out.


The one or other of two alternatives.




An action to restore property to the person who is entitled to it.

Electronic Commerce Legislation

These laws permit electronic documents to be of the same force and effect as a paper document and electronic signatures to have the same binding legal effect as handwritten signatures.

Electronic Data Interchange (EDI)

Used by CSIO members as the preferred solution to transfer policy, claim, payment and related information between insurance brokerages and insurance companies.

Electronic Data Processing Policy (EDP)

Insurance policy normally covering physical loss to data processing system and equipment and date processing media, and extra expense.

Electronic Protection

Installation of electronic devices to help detect unauthorized access can be used to provide an effective means of perimeter protection.


Device used to move people and goods from one floor level to another.

Elevator Collision

Coverage for collision damage to elevator.

Elevator Liability Insurance

Covers against liability for bodily injury and property damage arising out of ownership, operation or use of an elevator.


Electronic correspondence sent between individuals over the internet.


The fraudulent taking of money or property which has been entrusted to one’s care by reason of some office or employment or position of trust.


An unforeseen happening that calls for immediate action.

Emergency Doctrine

Under this doctrine, one is not held to the same degree of care for his actions when confronted with a sudden emergency requiring instinctive action, as he is when he has time for reflection. In a situation requiring medical assistance for an adult who is unable to give consent, or a child shoes guardian is not immediately available, the law implies the consent required to administer emergency medical services.

Eminent Domain

State’s power to appropriate private property for public use.


A thing emitted, e.g., a pollutant from a factory.

Emotional Intelligence

Allows a person to pick up on the difference. The emotionally intelligent person understands the difference between what is said and how it is being said.


The ability to understand and appreciate another person’s frame of reference. The manner by which we demonstrate our appreciation and understanding of another’s position is by listening.


Use services of; hire.


One in the service of another, where the employer has the right to direct and control the employee as to how the work is to be performed.

Employee Benefit Plan

An incentive plan to reward employees for high level of performance and loyalty.

Employee Dishonesty

In insurance, generally refers to losses resulting directly from one or more fraudulent or dishonest acts committed by an employee, acting alone or in collusion with others.


One who employs the services of others.

Employers’ Liability Acts

Acts defining the extent to which employers shall be liable in damages for employees’ injuries occurring in the course of employment, e.g., Workers Compensation Act.

Employer’s Liability Insurance

Coverage against common law liability of an employer for accidents to employees. As distinguish from liability imposed by a Worker’s Compensation Law.


That activity which occupies one, normally on a day to day basis.

Employment Contract

Contract signed by employer and employee outlining terms and conditions of the employment.

Employment Standards Legislation

Enacted in all Canadian Provinces to impose minimum requirements or standards of employment as well as minimum responsibilities on employers.


Grant of authority.


Management’s ability to delegating responsibility and authority, in order to free themselves to take on responsibilities important to the brokerage as a whole.


Give power to do something.


Illegal intrusion in a highway or navigable river, which may or may not obstruct.


Any outside interest in or right to property founded on legal grounds, such as a mortgage, lien on work and materials, or a right of dower. It diminishes the interest of the person owning the property.


A piece of paper issued by the insurer indicating in writing that there has been a change in the terms or conditions of the insured’s policy.


Policy Form of life insurance that is combined with certain savings features.

Engaged In Employment

To be providing a service for the employer under terms of employment.


Possess. Have benefit of.


To follow as a chance, likely or necessary consequence; to take place afterwards, e.g., fire occurring after earthquake.


An undertaking, usually involving financial commitment.


Persuade someone to do a thing.


To deliver to another something in trust or to commit something to another with a certain confidence regarding his care, use or disposal of it.


All those circumstances and factors which affect the value of property and the quality of peoples’ live.

Environmental Impairment Liability

Insurance to cover damage caused by pollution.


Generally, The articles needed in equipping.


Persuade someone to do a thing.


To deliver to another something in trust or to commit something to another with a certain confidence regarding his care, use or disposal of it.


All those circumstances and factors which affect the value of property and the quality of peoples’ live.

Environmental Impairment Liability Insurance

Insurance to cover damage caused by pollution.


Generally, the articles needed in equipping



Equitable Remedies

These remedies are only awarded by the courts where some special injustice is likely to result that cannot be addressed by damages.


Justice administered according to fairness as opposed to rules of common law.

Equity Ratio

Is a test of financial strength of special interest to ling-term creditors. Because owner’s equity is total assets minus total liabilities, the higher the ratio is, the stronger the financial position of a brokerage will be.


The wearing away by the action of water, wind, or other elements.


Involving error.


Condition of erring in opinion or conduct.

Errors And Omissions Insurance

Insurance covering legal liabilities of professionals not usually involved in care of the human body, e.g., insurance brokers, accountants, etc. Indemnifies insured for any loss sustained because of the rendering or failure to render professional services.

Escalation Clause

Contract provision allowing for adjustment in specific items if conditions change.


Property delivered into the hands of a third person, to be held until the happening of a contingency or performance of a condition, and then delivered by him to the original grantor, e.g., delivery of deed to escrow agent under instalment land sale contract until full payment for land is made.


Spying, usually in respect to national defense.


(a) Degree of interest one has in real and personal property. (b) Total property owned by a decedent prior to distribution.


Determining approximate cost.

Estimated Premium

Approximate cost of premium which will be increased or decreased when final premium calculation is made.


One who appraises value, worth or cost of items.


To stop, bar, or preclude.


“Estoppel” means that a party is prevented by his own act claiming a right to the detriment of another party who was entitled to rely on such conduct and has acted accordingly, e.g., insurer is estopped from denying payment when has advised insured claim will be paid.

Ethical Egoism

Ethical Egoism holds that the consequences of an action are evaluated as right or wrong, solely in terms of their harm or benefit to the individual considering the action.

Ethical Realism

When an individual is confronted with ambiguity they prefer to look at an objective standard (such as a code of conduct or set of professional rules) to determine whether a course of action is ethical, instead of analyzing a somewhat ambiguous ethical model.


Relating to moral character. Conforming to professional standards of conduct.


An endeavour to elude truth or escape law’s punishment.


Happening or occurrence. Different from an “act”, which is a product of the will, whereas an “event” is something that takes place independent of the will, e.g., earthquake or flood.


To recover something form a person by virtue of a court’s judgment or judicial sentence.


Depriving one of his possession of land or rental property which he has held or leased.


An investigation; search; inspection; interrogation.

Examination for Discovery

After documents are exchanged, each party to a lawsuit can be obligated to attend an examination for discovery, at which the parties will be asked to answer a series of questions orally, under oath and in the presence of a court reporter.

Examination Under Oath

The right given to insurers to require a policyholder to answer questions about a loss or claim after having been sworn.


(a) One who administers an examination. (b) Underwriter who studies individual risks for acceptability. (c) Insurance company employee who receives claims reports for approval of payment. (d) Government official who checks who checks records of insurance company.


To dig out, leaving a hole.


Something which would not ordinarily apply, i.e., an exception excludes that which otherwise would be included.


That which goes beyond what is necessary. Also, degree or amount by which one thing or number exceeds another.

Excess Clause

Clause providing for insurer’s liability up to limits of policy covering excess loss only after other valid insurance has been exhausted.

Excess Insurance

Amount of insurance coverage which is beyond that of one insurer but which is required to pay a particular loss as distinguished from “other insurance” which may by used to pay or contribute to the loss. See also Excess policy.

Excessive Force

Unjustified amount of force.

Excess Liability

In marine insurance, insurance to cover the excess amount of liability for general average contributions, salvage charges, sue and labour charges and three fourths collision liability where the full amount is not covered by a hull policy.

Excess Limits Premium

Premium charged for excess liability coverages.

Excess Policy

One that provides that the insurer is liable only for the excess above and beyond that which may be collected on other insurance.


A tax which includes various license fees and almost all taxes except income tax.

Excise Bond

Required under the Excise Act and Regulations guaranteeing compliance with the Act.


Provision specifying the situations, occurrences or persons not covered by the policy.

Exclusive Agency

Grant of exclusive right to sell within a specified market or area to agent.

Exclusive Agent

Agent who has exclusive right to sell within a specified market or area.

Exculpatory Clause

Contract provision relieving one party of blame or negligence for his acts.


To carry out in accordance to its terms.


A person appointed by a testator in his will to administer his estate.

Executor De Bonis

Non Executor who replaces a previous executor.


Female executor.

Exemplary Damages

When wrong done to plaintiff is aggravated by violence, oppression, malice, fraud, or wanton and wicked conduct on the art of defendant, those damages awarded to plaintiff over and above what will barely compensate him for his property loss.

Ex Gratia Payment

Payment made by insurer who is not liable under terms of the policy, but is made in order to avoid greater expense, e.g., coasts of a suit.

Exit Way out Expedite

To hasten.

Expediting Costs

The extra costs incurred in hastening the recovery of a business after a loss.

Expediting Charges

Cost to speed up the repair or replacement of destroyed or damaged property.

Expediting Expenses

(Boiler & Machinery Policy) Includes: (a) the reasonable expenses arising out of making necessary temporary repairs to the damaged property, e.g., boiler. (b) Those expenses incurred in speeding up or expediting permanent repairs to such property.


To eject, generally implying the use of force (regarding trespass and other torts).

Expense Constant

The amount used to calculate a premium which represents the minimum cost of issuing and serving a policy. Usually applied to small risks.

Expense Loading

The part of a premium rate which represents the cost to the insurer of producing and maintaining the policy.

Expense Ratio

Proportion or ratio of expenses to income.

Experience Modification

Change of rate brought about by loss experience in a particular class of business.

Experience Rating

Method of determining rates by using the loss experience of insured over a period of time.


One whose education or personal experience makes him knowledgeable in a specialized field.


The date upon which a policy will terminate, unless preciously cancelled.

Expiration Notice

Notice sent by insurer to broker/agent or one sent by broker/agent to insured that a policy is about to expire.


Taking unjust advantage of another for one’s own advantage or benefit.


An outburst of gas or compressed air, usually accompanied by a loud violent noise or report.


v. To send abroad.


n. Commodity which has been exported.


The state of being open or subject to loss from some hazard or contingency.

Exposure Theory

Under this theory, bodily injuries or property damages resulting from exposure to harm trigger the policies that were in place at or during the time of exposure.


Made known distinctly and explicitly.

Express Authority

Authority given in direct terms which expressly authorizes agent to do a delegable act.

Express Company

Business which transports parcel as common carriers.


Stated or declared in direct terms.



Extended Coverage Clause

Clause which extends protection to hazards beyond those covered in the basic policy.

Extended Family

The dependent child, spouse, guardian, brother, sister, and grandparent of the Insured Applicant or Spouse.

Extended Term Insurance

Form of life insurance that provides for continuation of the policy even if premium is not paid, so long as sufficient equity remains in the policy.


To obtain money or other valuable thing either by actual force, or by the force of motives applied to the will.


When property is obtained from another by wrongful use of actual or threatened force, violence, or fear, or under colour of official right.

Extra Expense Insurance

Covers the extra expenses an insured incurs in carrying on a business following an insured loss.


Condition of special and unusual danger.

Extraneous Evidence

Evidence that is not furnished by the document such as a contract, deed, or will, but is derived from outside sources.


Out of the ordinary.

Extraordinary Care

Highest degree of care.

Extraordinary Hazard

Hazard not commonly associated with a hob or undertaking.

Extraordinary Risk

A risk arising out of conditions not usual in the business, and one which may be obviated by the exercise off reasonable care by the employer.


Outside the physical and juridical boundaries of a particular province or country.




In marine insurance, “Free of all average”, meaning that the insurance is against total loss only.


Free alongside. Sale price includes costs of transportation and delivery of the goods alongside the ship.


Fellow Canadian Institute of Actuaries.


Fellow of the Chartered Insurance Institute (British).


In marine insurance, “Free from general average.” See Average; General average contribution.


Fellow of the Insurance Institute of Canada.


Free on board some location, meaning the sale price includes delivery to that location.

F.P.A.A.C. (Free Of Particular Average, American Conditions)

In marine insurance, average clause which limits recovery of partial losses to those caused by fire, stranding, sinking or collision.

F.P.A.E.C. (Free Of Particular Average, English conditions)

Some as FPAAC except that the partial losses to referred to are recoverable if the vessel has stranded, sunk, burned, been on fire or in collision, regardless of whether such losses were actually caused by any of these perils.


Fellow of Society of Actuaries.

Face Amount

The policy amount which is the limit the insurer may be liable to pay in one loss.

Face Of Policy

The first or front page of the policy. Synonymous with Declaration(s), Declaration Page, or Coverage Summary page.

Face Value

The Value indicated on the face of a security or insurance policy representing its value at maturity or death.

Facilitated ADR

Facilitated ADR occurs when a third party is called in to assist with the dispute resolution process.


Pooling agreement between all automobile insurers (now replaced in most provinces by the Facility Association) in which a market is guaranteed for all licensed drivers and registered owners. The results of the total industry pool are shared by all members of the agreement.

Facility Association

Similar to Facility in intent except that individual risks are written with selected carriers on behalf of the association, the collective results of which are then shared by all members of the association.


An exact copy.

Facsimile Signature

Signature reproduced by a mechanical or photographic process.


An actual occurrence.

Fact Finding ADR

Fact finding ADR requires an investigation or inquiry.


One who is employed to sell merchandise consigned to him, and who has it in his possession and control, and is remunerated by a commission. A factor is different form a “broker” in that he is entrusted with the possession, management, and control of the goods while the broker acts as an intermediary without control or possession of the goods. A factor may buy and sell in his own name, as well as in that of the principal, while a broker cannot.

Factory Mutuals

Mutual insurance companies specializing in industrial risks and loss prevention.

Facultative Reinsurance

A type of reinsurance whereby the reinsurer has the option of accepting the tendered part of the original insurer’s risk.

Fair Market Value

Price at which property would change hands between a willing buyer and willing seller, if neither were under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts. Synonymous with actual cash value, actual value, market value, fair cash market value, fair cash value, market value, reasonable market value, trust cash value, value.

Fair Rent

A rent which is reasonable.

Fair Value

Present market value. When market value cannot be established, expert testimony may be relied on. In such cases, it is essential to consider intrinsic value, selling value.

Fair Rent

A rent which is reasonable.

Fair Value

Present market value. When market value cannot be established, expert testimony may be relied on. In such cases, it is essential to consider intrinsic value, selling value, and earning power of the property to arrive at a fair valuation.


Not true. Has two distinct and well-recognized meanings: (1) intentionally or knowingly or negligently untrue; (2) untrue by mistake or accident, or honestly after the exercise of reasonable care.

False And Fraudulent

A representation which was known to be untrue when made.

False Arrest

Includes a false imprisonment, but contains the additional feature of detaining a person with the intention he be turned over to the police for prosecution.

False Claim

Untrue claim or statement.

False Entry Accounting

Enter which misrepresents the truth and which is made with the intent to deceive or defraud.

False Impersonation

To falsely impersonate another for benefit to the offender or another.

False Impersonation

To falsely impersonate another for benefit to the offender or another.

False Imprisonment

Consists of holding some one without lawful justification in a place against their will.

False Pretences

When one knowingly makes a false representation about a fact with the intent to defraud a victim of his property.

False Representation

An untrue statement made with intent to defraud and to induce another to act upon it. The victim must have relied on such statement and must have been induced to act to his injury or damage.

False Statement

A knowingly false statement, or one made recklessly without honest belief in its truth, meant to deceive.


To forge or counterfeit. Has two meanings, (1) being intentionally or knowingly untrue with intent to defraud, and (2) mistakenly and accidentally untrue.


Meaning is dependent on field of law in which word is used. Most commonly refers to group of persons consisting of parents and children; immediate kindred. Also conveys the notion of some relationship, blood or otherwise.


n. Land which is devoted to agriculture, pasturage, stock raising, or similar industry.

Farm Employees

Farm employees are not required to be insured under the workers compensation plan in most provinces and must sue their employers for job related injuries.


The ownership, maintenance or use of premises for the production of crops or the raising or care of livestock, including all necessary operations. Farming also includes the operation of roadside stands and farm markets maintained principally for the sale of the insured’s own farm products.

Farming Operation

Includes tillage, farming, dairy farming, ranching, raising of crops, poultry, or livestock, and production of poultry or livestock products in an unmanufactured state.

Farming Products

Those things which have a portion of their production upon the farm.

Farm Labour

Farm work and work related thereto.

Farm Implement Dealer Bond

Bond which guarantees dealer will comply with the Farm Implement Act.

Farm Mutual

Mutual insurance company owned primarily by farmers.

Farmer’s Comprehensive Liability Policy

Insures the legal liability of farmers for bodily injury and property damage to third parties arising out of farming operations. Most insures automatically include coverage for personal liability.


Negligence; neglect of duty.


Apprehension of harm.


Performing or doing of an act.


One who commits a tort.


A fixed amount paid by a client to an insurance broker or an insurance company to arrange an insurance policy.

Fellow Of The Chartered Insurance Institute (FCII)

Professional insurance designation (British).

Fellow Of The Insurance Institute Of Canada (FIIC)

Professional insurance Designation (Canada).


One who commits a felony.


Done with the intent to commit a crime.


Entry Type of burglary.

Felonious Taking

The taking of something with intent to steal it.


Crime of a more serious nature than a misdemeanour.


Commercial vessel which transports people, vehicles, goods, etc. across water.

Fidelity Bond

Contact whereby one agrees to indemnify the insured against loss arising from dishonesty of employee or other person holding a position of trust.

Fidelity Insurance

Covers losses caused by dishonesty or want of fidelity on part of insured’s employees.


One who manages money or property for another and who must exercise a standard of care imposed by law or contract.

Fiduciary Bond

Surety bond required to be filed by trustees, administrators, executors, guardians, and conservators to insurer they will properly perform their duties.

Field Representative

A representative of the insurer working in a designated territory.

Financial Institutions

Any organization authorized to do business according to provincial and federal laws regarding financial institutions, e.g., banks, trust companies, credit unions, etc.

Financial Responsibility Acts

Provincial statutes which, as a precondition to licensing, require owners of motor vehicles to produce proof of financial responsibility. It assures availability of money to pay damages awarded to vehicle accidents. An insurance policy is the most common form of proof.

Financial Statement

Report stating the financial condition or financial results of a business, person or organization on any date or for any period. Two main types of financial statements are balance sheets and profit and loss statements.


n. Sum of money fixed as a penalty for an offence.


(a) The judicial meaning dose not differ from its most common and popular meaning, to wit, the loss of property due to ignition or burning. (b) To dismiss from employment.

Fire Damage

That damage caused by fire.

Fire Insurance

Contracts of insurance witch, by law, are required to insure direct dam age caused by fire, lighting, and explosions of natural, coal or manufactured gas.

Fire Marshall

Public official charged with the prevention and investigation of fires.

Fire Resistant

The term generally applied to buildings which have met minimum standards in terms of the hours they will with stand a specific, carefully controlled test fire.


Something with a very high degree of resistance to the spread of fire.

First Class Mail

Policy Protects against loss of securities when sent by first class mail.

First Lien

One which must be satisfied before payment of any other charges or encumbrances upon the same piece of property.

First Party Release

Release between insured and insurer.

First Policy Year

The year beginning when the insurance policy is firs issued.

Fitness For Particular Purpose

When the buyer relies on the skill or judgment of the seller to select or furnish suitable goods, there is an implied warranty by the seller that the goods will be fit for the purpose for which they are required.

Fixed Assets

Those long-term assets held for use rather than for sale, e.g., land, buildings, machinery, equipment, etc.

Fixed Costs

Costs that remain constant whether any business is done or not.

Fixed Expenses

Are those expenses that continue during the period of the interruption. Fixed expenses include: mortgage interest, interest on accounts payable, salaries, property taxes, profe4ssionwl fees, insurance premiums, regular donations, and trade association dues.

Fixed Penalty Bond

Bond in which the amount of liability or guarantee is specified.

Fixed Price Contract

Contract with a price determined in advance.


That which is fixed or attached to something permanently, e.g., a furnace affixed to a house, sprinkler system installed in a building.

Trade Fixtures

Articles attached to rented premises by tenant to be used in connection with his business.

Flat Cancellation

The cancellation of a policy as of its effective date and which is free of any charge to the insured.

Flat commission

Commission scale which pays the same percentage on all classes of risks.

Flat Rate

Fixed rare which will not be adjusted.

Fleet Policy

A blanket policy which covers a number of vehicles owned by the same insured. In marine insurance, a policy which insures a number of vessels owned by the same insured.

Floater Policy

Policy which covers items that have no fixed locations, e.g., jeweller or other items of personal property worn or carried about by the insured.


Inundation of water over land not usually covered by it.

Flood Insurance

Covers against damage caused by rising or overflowing of bodies of water.

Floor Plan

Diagram of building’s interior layout.

Floor Plan Financing

Arrangement whereby supplier of goods borrows money to purchase additional goods to include in his inventory, the loan being secured by those goods, the amount of which is gradually reduced as the merchandise is sold.


In marine insurance, goods lost at sea which, if floating and unclaimed, belong to the Sovereign.

Following Form Excess Liability Insurance

Excess liability insurance subject to terms and conditions of the primary policy.


Strength directed to an end. Normally used in such manner as to show that unlawful action is intended, e.g., forcible entry.

Force Majeure

Of superior or irresistible force. A clause common in construction contracts to protect the parties in the event the contract cannot be performed in its entirety due to causes which are outside their control, e.g., Act of God.


Accomplished by force.


Enter One is guilty of forcible entry who either (a) enters a building by breaking open doors. Windows, or other parts of building, or enters using violence or terror; or (b) who, once entering a building, urns out by force, threats, or menacing conduct the party in possession.


The reasonable anticipation that loss or damage is a likely result of acts or omissions.


To lose some right, privilege, or property because of breach of contract, neglect of duty, or offense.


Losing the right to something because of non-performance of some obligation or condition.

Forfeiture Bond

Bond in which the full bond amount is forfeited in the event a condition of the bond is breached, regardless of amount of loss or absence of loss or damage.

Forfeiture Of Bond

A failure to perform the condition upon which obligor was to be excused from the penalty.


A person is guilty of forgery if he fraudulently alters any writing of another without his authority; or makes, completes, executes, authenticates, issues or transfers any writing so that it purports to be the act of another who did not authorize the act, or of to have been executed at a time or place or in a numbered sequence other than was in fact the case, or to be a copy of an original when no such original existed; or utters any writing he knows to be forged in a manner specified above.

For Hire Or Reward

To transport passengers or property for a charge.


An insurance policy itself or riders and endorsements attached to it.

Formal Contract

A written contract r agreement.


Without delay. The words “forthwith” and “immediately” convey the same meaning.


Accidental or happening by chance.

Fortuitous Event

An event that happens by accident.


To ship goods by common carrier.


One whose business is to receive goods for further handling, e.g., warehousing, packing, carload shipping, delivery, etc.

Forwarding Agent

One who receives and ships merchandise for others.

Foul Bill Of Landing

Bill of lading which indicates the goods were damaged or that there was a shortage at the time of shipment.

Foundation Exclusion Clause

Clause stating policy does not insure building foundations. As a result, such values will not enter into a determination of insurance under the provisions of a coinsurance clause.

Foundation Wall

Masonry or other wall below the surface which supports a building.


Refers to the construction of a building built predominantly with lumber.

Franchise Clause

In an insurance policy, clause stating the insured will pay for damage under an agreed amount and the insurer will pay claims only over a stated amount. Different form a deductible clause, wherein the insured bears the loss in every claim up to the deductible amount. In the franchise clause, one the claim exceeds the agreed amount, the insurer pays the entire claim.

Fraternal Insurance

The form of cooperative life and/or disability insurance furnished by a fraternal beneficial association to its members.


An act of willful deception and dishonesty carried out with a view to securing some advantage, profit, etc., to which one is not entitled, at the expense of another.


To act willfully, and with the specific intent to deceive or cheat; ordinarily for the purpose of either causing some financial loss to another, or bringing about some financial gain to oneself.

Fraudulent Misrepresentation

A false statement made knowing it to be false and intending another to act on it to his detriment, or made carelessly or recklessly without regard to whether it is true or false.

Free Alongside (F.A.S)

The sale price includes all costs of transportation and delivery of the foods alongside of the ship.

Free Of Capture And Seizure (F.C. & S.)

In marine insurance, clause used to exempt the insurer form paying losses caused by capture or seizure by enemies of a country.

Free On Board (F.O.B.)

As part of sale price, seller obligated to deliver goods, on certain conveyance, without expense to buyer.


Price paid for transporting goods by a carrier.

Freight Bond

Bond guaranteeing payment of freight charges to common carrier.

Freight Booking

Making advance arrangements for transportation of goods.

Freight Forwarder

One whose business is to assemble small shipments into a single lot and transport it to point of destination.

Freight Rate

Price charged to carry goods based on number of pieces carried, or the weight, or the mileage, or the value of the goods, or a combination thereof.

Freudian Model

The Freudian model holds that we are result of the workings of the repressed, inner, subconscious being. Freud developed a tripartite view of the human psyche. He believed the human psyche was made up of the id, the ego and the super ego. In Freud’s view, the three parts of the psyche react to the environment on the basis of deep, dark urges, barely understood, buried within the id and the super ego, managed by the conscious, struggling ego.

Friendly Fire

Fire confined to the place it is supposed to be, e.g., fire in a fireplace, etc.

Fringe Benefits

Benefits which are in addition to a person’s employment, e.g., paid insurance, profit-sharing plans, etc.


Having little weight.


Line of property on street.

Full Age

The legal age.

Full Coverage

Insurance which covers all losses with no deductible amount.

Full Disclosure

Where the broker has the authority to bind the insurer, the broker has a corresponding duty to disclose to the insurer all the material information received from the client.

Full Interest Admitted (F.I.A.)

In marine insurance, an agreement that the named insured’s owner ship or right to collect the proceeds of the insurance is agreed to.

Full Name

One’s first, middle and surname, or the first name, meddle initial and surname.

Full Reporting Clause

Clause in reporting policies which provides for penalty to insured in event of loss if he has reported less than he should have reported by the requirements of his policy.

Full Value Declared (F.V.D)

Notation on an air waybill which indicates that a specific value has been declared to th3 carrier for carriage of the merchandise.

Functional Obsolescence

The need for replacement because a structure or equipment has become inefficient or outmoded because of subsequent developments or improvements. The loss of value due to inherent deficiencies within the property.

Functional Organization

In a functional organization there will be many staff specialists, each with the authority over specific areas of operations.

Fundamental Right

Rights which have their origin in the express terms of the Constitution.

Funeral Expenses

Money spent to inter, cremate or otherwise dispose of a corpse, including monument, perpetual care of burial plot, and entertainment of those attending funeral or ceremony.

Fur Floater

Covers furs against all risks wherever they are located.


To supply for a particular purpose.

Future Damages

Sums Awarded for future effects of an injury.

Future Earnings

Earnings which could have been made in the future but were lost as a result of injury.

Future Performance

In contracts, performance which must be completed in the future.




Generally accepted accounting principles.

Garage Liability Insurance

Protection for automobile dealer, repairer, service stations, etc., which covers their legal liability for claims for bodily injury and property damage due to business operations.


A statutory proceeding whereby money owed a person, e.g., from an employer, is applied to payment of debts of such person to another.

General Agent

One authorized to act for the principal in all matters concerning a particular business or employment.

General Average

Designed to provide payment for ocean marine losses voluntarily incurred for the safety of the entire venture. The arties whose property was saved shall contribute to the losses of the parties whose property was sacrificed.

General Average Contribution

In losses involving a general average, such losses or expenditures are contributed to by all the interest at risk on the basis of their respective values.

General Contractor

Sometimes referred to as “prime contractor”, is one who contracts for the construction of an entire building or project, hires subcontractors, coordinates all work, and is responsible for payment to subcontractors.

General Damages

These are damages which cannot be quantified with precision in monetary terms, but reflect an amount that the court believes necessary to compensate the aggrieved party fairly.

Generally Accepted Accounting Principles (GAAP)

Accepted accounting practices and procedures at a specific time.

General Manager

One who directs and controls a corporation’s affairs.

General Partner

One who, with one or more persons. Carries on business as a co-owner and who is, along with such others, personally liable for all the partnership’s debts.

Genetic Model

This view argues that what makes one person more sensitive and another more hardy is the result of one’s genes. Such theorists look at disorders such as depression, dyslexia and schizophrenia, and they reason that since the disorders run in families, the common source of the disorder must be in the genes.

Gentlemen’s Agreement

Usually an unsigned agreement which is unenforceable but it is expected to be performed because of good faith.

Geographic Segmentation

Used to segment existing clients based on where they live, either within a country, within a province or even where in a particular area of a city.


Voluntary transfer of property made without compensation.

Glass Insurance

Covers against accidental glass breakage.


Goals express in specific terms what the objectives sate in general terms and which the strategies state conceptually. Goals should not express how the objectives should express what is to be accomplished, and by when.

Going Concern

An existing business being conducted in the way for which it was organized. Also, a firm which may have financial difficulties, but still continues to transact its ordinary business.

Going Concern Value

The value of the assets of a firm that is actively in business, rather than the value if those assets were disposed of in a liquidation sale.

Going Price

Current market value.

Good Character

The sum of those virtues which generally forms the basis for someone’s reputation.

Good Faith

The state of mind denoting honesty of purpose, freedom from intent to defraud, and being faithful to one’s duty and obligation. A basic principle of insurance, e.g., normally applicant for insurance must provide all details of risk to be insured, including information regarding previous claims, cancellations, or refusals of insurance.

Good Order

Something is in “good order” when it is in acceptable condition under the circumstances.


Generic term which can include all personal property or can be given a very restricted meaning.

Goods And Chattels

Usually refers to all personal property, and not real property.

Good Will

The intangible asset of an organization that accrues from such items as favourable reputation, drawing ability, good public relations, and perception of skill and knowledge.

Grace Period

A period beyond the due date of premium (usually 30 or31 days) during which insurance is continued in force and during which payment may be made to keep policy in good standing.

Graded Surplus Treaty

Surplus treaty with capacity varying according to class or net retained line of the ceding insurer.

Gradual Deterioration

Refers to the deterioration of an object which arises naturally out of its use over time.

Grandfather Clause

Provision whereby those affected by a new law or regulation are exempted from complying with it, e.g., normally persons are already engaged in such activity.


Done without reward.


Given without consideration.

Gratuitous Bailee

One to whom possession of personal property is transferred gratuitously and who is therefore required to sue great care to avoid liability for negligence.

Gratuitous Licensee

Person who does not have an invitation to come on to the property of another, but who has permission of the occupier to do so.

Gratuitous Passenger

Person riding in an automobile at invitation of owners or authorized agent and who does not pay for the ride.

Green Book

An annual automobile insurance experience exhibit produced for government by IBC and based on the premium income and claims results reported by all licensed insures as required by the various Provincial Insurance Acts under which insurers are licensed.


Flagrant; beyond allowance.

Gross Earnings Form

Business Interruption form of insurance under insured. Indemnity period commences at time of loss and is restricted to such time as is required to replace to lost or damaged property.

Gross Line

Amount of insurance a company has on a particular risk, includes the amount it has reinsured.

Gross Loss

Total amount of loss before applying reinsurance.

Gross Negligence

The deliberate or intentional failure to perform a clear duty in reckless disregard of the consequence on the life or property of another.

Gross Premium

Net premium plus loading for expenses and contingencies.

Gross Profit

The difference between sales and cost of goods sold before allowance for operating expenses and income taxes.

Gross Sales

Total sales without discounts or other adjustments.

Ground Water

Water in the subsoil, spring, or shallow well.

Group Insurance

Usually a contract of life, accident and health insurance between insurer and employer for benefit of employees.

Guarantee Endorsement

Endorsement providing that if insurance company becomes insolvent, reinsurer shall pay insured for loss to mortgaged property covered by reinsurance.

Guaranteed Freight

Freight which is not prepaid but which is payable whether or not the merchandise arrives at the final point of destination.

Guaranteed Replacement cost

Coverage for full cost of replacing damaged property without any allowance or deductions (e.g. depreciation) as long as the property was properly insured initially.


One who becomes secondarily liable for another’s debt or performance. Different from a strict surety who is primarily liable with the principal debtor. See also Surety.


v. To assume the responsibility of a guarantor.


n. A promise to answer for the debt or default of another. A guaranty is a contract that something will be done exactly as it is agreed to be done. Often confused with surety ship but can be distinguished by whether or not the undertaking is a joint undertaking with the principal (surety ship) or a separate and distinct contract (guaranty).

Absolute Guaranty

An unconditional guaranty that a debtor will pay his debt or perform his obligation.

Collateral Guaranty

Whereby the guarantor agrees to pay damages in the event the principal fails to do what he has promised.

Guaranty Company

A corporation authorized to transact the business of entering into contracts of guaranty and surety ship.

Guaranty Or Fidelity Insurance

Insures against loss arising from infidelity of employees and others holding position of trust, or against the insolvency of debtors, losses in trade, loss by non-payment notes, or against breaches of contract.


One given lawful control over the care and management of the person, or the estate, or both of a child while a minor.

Guiding principles

Certain rules and principles agreed to majority of insurance companies that override actual wording of a policy in order to ensure efficient settlement of a claim.




Residence; place abode, dwelling place.

Hail Insurance

See Crop Hail Insurance

Hallucinogenic Drug

One that induces hallucinations, such as LSD, mescaline, etc.


Words, gestures and actions which annoy, alarm or verbally abuse another person.


n. A space of deep water sheltered by adjacent land affording a safe anchorage for ships.

Hard Market

A hard market occurs when low profit margins force out some of the competition. The remaining insurers usually have enough business to enable them to be selective about the kinds of property they insure. Insurers generally return to a more disciplined underwriting approach in a hard market and the insured normally receives little or nothing in the way of rate discounts.


The loss or detriment to a person resulting from any cause.


The risk, danger, or probability that the event insured against may happen.

Moral Hazard

Subjective characteristic of the applicant that could cause a peril to occur.

Morale Hazard

Arises out of carelessness or indifference to loss because of the presence insurance.

Physical Hazard

The carious physical aspects of matters surrounding the insured premises or property which may improve or lessen the chances.

Loss with respect to that particular risk, e.g., the use of volatile materials on the premises.


Exposed to or involving danger.

Head Of Family Or Household

One who supports and maintains in one household individuals related by blood, by marriage, or marriage, or by adoption.

Health Insurance

Insurance which provides for payment of benefits with respect to bodily injury, disablement, sickness or accidental death, including expenses incurred in prevention of sickness.

Heavy Equipment Contractor

One whose operation includes use of heavy construction equipment, e.g., road builders, excavators, sewer contractors, etc.


Disregard of the rights or safety of others.


A common law term meaning the person appointed by law to succeed to the estate in case of intestacy.


Valuable personal property items handed down through generations of a family.


As related to decision of a court: decided.

Held Covered

A provisional acceptance of risk, subject to confirmation that cover is needed at a later date.


From the present time forward, excluding all the past.


Denotes the future, excluding the present and past.


Denotes time past.


In a document, directs attention to information which is following.

Hidden Asset

Asset recorded in company’s books which reflect a value substantially below the market value.

Hidden Defect

Deficiency in property which cannot be detected by reasonable inspection and for which a seller or lessor is generally liable if such defect causes harm to a user.

High Seas

Portion of sea or ocean which is beyond the territorial jurisdiction of any country.


Roadway or street which all people have the right to use and which is publicly maintained.

Highway Act, Or Laws

Lows governing the laying out, construction, repair, and use of highways.

Highway Crossing

Place where a railroad track intersects a highway.

Public Highway

One controlled and maintained by public authorities for use by the general public.

Highway Traffic Act

Laws which govern the obligations of the provincial governments and users of roads.


(a) Robbery of goods and/or vehicle while in transit. (b) By threat or use of force, the hold u of a vessel or aircraft to transport one to a destination other than that intended.




v. To purchase the temporary use of something or the labour or services of another for an agreed compensation.


n. Payment for use of something or for labour or services.


Generically used, refers to person of either sex.

Hit And Run Accident

Criminal act involving a collision between a motor vehicle and pedestrian or with another vehicle in which the driver leaves scene without identifying himself.


Denotes a period of time already passed.


Fence enclosing project site.


An activity engaged in for purposes unrelated to profit.

Hold Harmless Agreement

A contractual arrangement whereby one party assumes legal responsibility for the acts another.


Under terms of a contract, the amount which is not payable until the contract has been complete and the period within which any liens must be filed has expired.

Holding Company

A company whose main activity is to own a controlling interest in the shares of other corporations and to supervise the management of such other companies.


Taking money or property by thread or the use of force or violence.


the house or dwelling in which one lives.

Home Office

Company’s corporate head office.

Homeowners Insurance

Insurance policy which insures dwelling building and personal property against certain risks loss. Most such policies also include personal liability coverages.

Home Port

The port where a vessel is registered, or the port closest to the usual its owner.


The dwelling building, including adjoining land where the head of the family dwells.


A voluntary or gratuitous payment.

Hospital Expenses Insurance

Covers expenses incurred as a result of illness or injury.

Hospital Professional Liability Insurance

Covers against claims for injury arising out of malpractice, errors and omissions, and mistakes for which hospital staff is legally liable.


Innocent person who is held captive by one who threatens to harm him if his demands are not met.

Hostile Embargo

One which is laid upon actual or prospective enemy vessels.

Hostile Fire

One which becomes uncontrollable or breaks out from where it was intended to be and becomes a hostile element.


Act or series of acts showing antagonism.


Structure used as living quarters for one or more persons or families.

House Air Waybill

An air waybill issued by a freight forwarder for an air shipment.


See Door To-Door.




adj. belonging to the house and family.


n. For insurance purposes, term is synonymous with “family” and includes those who dwell together as a family under the same roof.


The vessel or aircraft excluding its cargo.

Hull Insurance

Insurance covering a vessel or aircraft and its machinery or equipment.

Hull Syndicate

Ocean marine underwriters who have joined together for the purpose of insuring vessels on a joint basis.

Human Resource Management

The process of identifying and selecting the employee best qualified to achieve the strategic plan.

Humanitarian Doctrine

That which relieves a plaintiff of responsibility for his negligence where it can be shown that the defendant had last opportunity to avoid the accident.


Not restricted only to physical injuries, but includes mental pain and discomfort.


One who has a lawful, living wife.


Extreme emotionalism, characterized by attention-seeking, impulsive demonstration.




Insurers Advisory Organization.


Insurance Brokers Association of Canada.


Insurance Bureau of Canada.


Incurred But Not Reported.

I.C.C. (Institute Cargo Clauses)

In marine insurance, there basic sets of these clauses. The “A" clauses cover all risks, subject to specified exclusions. The “B” and “C” clauses cover specified risks, subject to specified exclusions.


Insurance Crime Prevention Bureau.


Insurance Institute of Canada.




For all practical purposes, exactly the same.


Absence of knowledge.


Against the law. Illicit Unlawful, prohibited.

Illicit Trade

In marine insurance, trade which is unlawful by the laws of the country where the cargo is destined.


A disease or ailment that seriously affects the genera soundness and healthfulness of one’s system.


Not pertinent, without weight.

Immediate Cause

The cause which directly produces the result or event. Distinguished from “proximate” in that the proximate cause (that which directly and efficiently brings about the result) may not be immediate, e.g., if a drunken man falls into the water and drowns, his intoxication is the proximate cause of his death, but the immediate cause of death is suffocation by drowning.


Without delay. The word “immediately” and ”forthwith” convey the same meaning. These are stronger than expression “within a reasonable time” or “as soon as is practicable” and imply prompt, vigorous action without any delay.

Immigrant’s Bond

Bond guaranteeing an alien will not become a public charge.


On the point of happening.

Imminent Peril

Under humanitarian doctrine, means certain, immediate, and impending. That position of danger to the plaintiff in which, if the existing circumstances remain unchanged, injury to him is almost certain.


Opposite of good morals.


Exemption from certain obligations which the law generally requires others to perform.


To weaken, diminish, or otherwise affect in an injurious manner.




Opposite of “express”, i.e., where the intent is not given in explicit and direct words, but is implied from the circumstances, the general language, or the conduct of the parties. Different from “inferred’ to the extent that the hearer or reader “infers” while the writer or speaker “implies”.

Implied Authority

In law of agency, power given to agent though such power is not expressly asserted. Includes other acts deemed necessary in conjunction with the agent’s express authority.

Implied Consent

See Consent.


That which no person can do, e.g., an impossible contract is one which the law will not hold binding on the parties because of the natural or legal impossibility of the performance by one party.


One who intends to deceive by pretending to be someone hi is not.


Confining one in prison.


Not apt to be true.


An addition made to property that enhances its value, beauty or utility or adapts it for new or further purposes.

Improvements And Betterments

Additions or changes to rented premises by a tenant at his own expense. Also called Tenant’s improvement.


In legal terms, when an act, fact or quality is ascribed or charged to someone.

Imputed Negligence

Negligence of one party which may be charged to another depending upon their relationship, e.g., negligence of an agent acting within his employment is chargeable to the principal.


Not sufficient.


In marine insurance, cargo stowed so that it does not project over the side or rail of the vessel. Inc. Incorporated.


Lack of physical or intellectual power, or of natural or legal qualification.

Legal Incapacity

Implies that one has a right to do something, but is prevented from doing it because of some impediment, e.g., below the age of majority, confined to prison, etc.


One who maliciously sets another’s building on fire.

Inchmaree Clause

In marine insurance, provision which covers loss or damage resulting from negligence of master, or hull, charterer, mariners, engineers and pilots.


Something following as subordinate: Something incidental to the main purpose.

Incidental To Employment

A risk is “incidental to employment” when it relates to what a worker has to do to fulfil the duties of his or her employment.


To spur on, e.g., incite a riot.


Money one received from one’s business, investment, or employment.

Income Control

Income control begins once the budget has been prepared. The brokerage must institute financial management discipline over the flow of these funds.

Income Statement

The Income Statement of the brokerage is the most important financial document in determining value because the income-producing ability of the brokerage is most significant item in determining value.

In Common

Shared by several, without apportionment or division into individual parts, for the equal advantage, use, or enjoyment of all.


Not having the ability, legal qualification or fitness to fulfil a required duty.

Incontestability Clause

In life and health insurance, a clause indicating that after a certain period of time, the insurer cannot dispute statements contained in the application. Normally, does not apply to fraudulent statements or misstatement of age.


To create a corporation.


The act of forming a corporation.


To become liable.

Incurred But Not Reported (I.B.N.R.)

A liability for future payments on (a) claims which have occurred during the accounting period but which have not yet been reported, and (b) expected adverse development of claims which have occurred and been reported but not yet settled.

Incurred Loss Ratio

Incurred losses divided by earned premium.

Incurred Losses

Losses occurring within a fixed period whether adjusted and paid or not.


To compensate the victim of a loss, in whole or in part, by payment, repair, or replacement.


Express or implied contract in which liability for a loss is shifted from one person held legally responsible to another person.

Indemnity Bond

A bond which indemnifies the obligee against loss which arise as a result of breach of trust or failure on the art of a principal to perform duties.

Indemnity Contract

Written contract whereby one party undertakes to indemnify the other in the event of loss or damage arising from some contemplated act on the part of the indemnitor, or from some responsibility assumed by the indemnitee, or from the clime or demand of a third person, in other words, to make good to him such case pecuniary damage as he may suffer.

Independent Adjuster

A person, firm or corporation who adjusts losses on behalf of insurance companies, but is not a regular employee of the company, does not work exclusively for one company and is paid in each case assigned for time consumed and expenses incurred.

Independent Broker

An independent broker is legally the agent of the insurance buyer, and has contracts with a number of insurance companies.

Independent Contractor

One who contracts to do a piece of work according to his own methods and is subject to his employer’s control only as to end product or final result of his work.


Not having an immediate application; not direct in connection.

Indirect Damage

Loss resulting from a peril, but not caused directly and immediately thereby. May be covered by insurance, e.g., Business Interruption, Leasehold Interest, etc.

Indirect Loss

Losses which arise as a consequence of direct losses. These losses are insurable under policies of indirect damage insurance.


n. A single person.


adj. Pertaining to one single person.

Individual Fidelity Bond

Bond securing the employer against loss from an employee’s dishonesty or fraud.


Not subject to separation.


To bring on.


The benefit which one will receive from entering into a contract is the inducement for making it.

Inescapable Peril

Term refers to the peril which the plaintiff is helpless to avoid by his own efforts, but which requires action on part of the defendant to avoid it. See Last Clear Chance Doctrine.


Not able to be avoided.

Inevitable Accident

An accident which cannot be prevented by human skill or foresight or one produced by an irresistible physical cause.

In Fact

Actual, as opposed to implied or inferred.


The state of one under the age of legal majority, generally 18 years of age.


One who has less power than another and is bound to obey him.


An ailment or disease which impairs the physical condition and health of a person. A known infirmity or pre-existing condition must be made known to the insurer under a policy of health insurance.

In Force

Policy which has not expelled or been cancelled.

Informal Contract

Usually an oral contract rather than a written one.


Below. Opposite of Supra, Above


A breach of a law, contract, right or duty.


A trespass or encroachment upon. Commonly used to describe invasions of those right secured by patents, copyrights, and trademarks.


Refers to the right of a lessee to enter and return form lands in question.


One who lives in a given place and has his home there.

Inherently Dangerous

Something in which danger of an injury arises from the product itself and not from any defect in it. An activity is inherently dangerous when it is likely that injurious consequences will attend doing of work.

Inherent Or Latent Defect

A defect which is in the product itself and is not easily discoverable,

Inherent Vice

Something within a commodity, or other kind of property, that causes its own demise over time, e.g., spontaneous combustion, spoilage of fruits, vegetables, dairy products, etc.

Initial Carrier

The carrier who first receives the goods and initiates the transportation process.


A court order prohibiting the defendant from doing something, or directing him to do something.

Injunction Bond

Bond guaranteeing the defendant’s ability to pay. Also used as a guarantee in court as a substitute for an injunction.


To damage, impair or do harm to.

Injurious Words

Words used to slander or libel another.


Damage or wrong done to a person, his right, reputation or condition.

Accidental Injury

A bodily injuly caused by accident.

Bodily Injury

Pain, illness or any Impairment of a person’s physical condition.

Civil Injury

Any injury to person or property which may be redressed by means of a civil action.

Permanent Injury

Injury that will continue for as long as one lives.

Personal Injury

awhile technically an injury to one’s person, this term is used in policies of liability insurance to mean injury other than bodily injury and arising out of libel or slander, malicious prosecution, false imprisonment, wrongful eviction, etc.

Inland Marine Insurance

Originally a form of insurance protection for goods transported other than on ocean. Now, term applies to a variety of coverages on floating personal property and to general liability as a bailee, e.g., jewellery, furs, contractor’s equipment, bailee’s customers. Also used to insure bridges, communication towers, pipelines, etc. Which are considered to be “instrumentalities of transportation”.

Inland Waters

Wasters within or partly within Canada excluding the open sea, e.g., rivers, bays, lakes.

In Lieu Of

Instead of.

Innocent Trespass

A trespass to land committed by mistake or in honest belief one was acting within his legal rights.

Innocent Trespasser

One who trespasses unintentionally or in the honest belief he has a right to do so and who removes sand or other materials from such land.


A condition which renders one unfit to enjoy liberty of action because of the unreliability of his behaviour that may result in danger to himself and to others.


Inability to pay one’s debts.

Inspection Report

Report prepared after a physical inspection of the risk which provides a detailed description of premises or property to be insured, including the hazards involved.

Installation Floater

Coverage for equipment in transit to the job site, while awaiting installation on site and during installation until accepted or interest of the insured ceases, whichever first occurs.

Instalment Premium

A premium which is paid in several payments.

Instalment Sale

Plan wherein buyer makes down payment and signs a contract to pay the balance in instalments over a period of time.

Institute Strikes, Riots and Civil Commotion Clause (S.R. & C.C Clause)

In marine insurance, clause which provides protection to a cargo owner for loss arising out of strikes, lock-outs, etc.


A written document.


Able to be insured against loss, damage, etc.

Insurable Interest

Generally one has an insurable interest where he derives pecuniary benefit or advantage by preservation and continued existence of property or would sustain pecuniary loss from its destruction.

Insurable Value

The property’s value for insurance purposes.


A contract (Policy) whereby, for monetary consideration (premium), one party (the insurer) undertakes to compensate the other (the insured) for loss on a specified subject by specified perils.

Insurance Binder

Insurance binders are contracts of insurance. In the insurance business, it is common for brokers to bind an insurer on a risk. This means that the broker has committed the insurer to provide a contract of insurance on the subject matter under discussion. Insurance binders may be oral or written.

Insurance Brokers Association of Canada (IBAC)

The national body of Canada’s independent insurance agents and brokers. Organized in 1921, much of its work is directed to safeguarding the public interest by establishing and maintaining a high standard of ethics and practice. Also involved in development of educational programs for insurance brokers. Membership is made up of provincial and regional brokers associations.

Insurance Bureau of Canada (IBC)

Trade association of Property/Casualty underwriters in Canada.

Insurance Crime Prevention Bureau (I.C.P.B.)

A Canada wide organization supported by property and casualty insurers which investigates fraudulent insurance claims and provides loss prevention information.

Insurance Institute of Canada (I.I.C.)

Provides educational services for the property and casualty insurance industry.

Insurance To Value

Insuring the full value of property, or at least to that value that meets the co-insurance requirement.


The person or corporation whose insurable interest is protected by the policy. Not limited to the insured named in the policy, but applies to anyone who is insured under the policy.


One who assumes risk or agrees to underwrite a contract of insurance.

Insurer’s Advisory Organization (I.A.O.)(1989) Inc.

National organization of Property/Casualty insurance industry that provides technical services in loss control engineering sciences, inspection, ratemaking, and actuarial sciences.

Insuring Agreement

Describes the coverages provided by the insurance policy.


A rebellion against the government.

Intangible Property

Property that have no physical substance and consist of legal rights rather than things. Intangible properties may be difficult to recognize and to value.


Consists of “legal rights” rather than things and includes patents, stocks, bonds, goodwill, trademarks, franchises, and copyrights.

Intended Use Doctrine

Two factors are considered in product liability cases

the maker’s marketing scheme, and the foreseeability of the risks which are inherent in the product when used for the purposes intended.

Intended Use Doctrine

The state of mind with which an act is done or not done. Not to be confused with motive which is what prompts a person to act or not to act.


A legal claim in something. Any right in the nature of property, but less than title. See Insurable Interest

Insurance Brok3ers Association of Canada (IBAC)

The national body of Canada’s independent insurance agents and brokers. Organized in 1921, much of its work is directed to safeguarding the public interest by establishing and maintaining a high standard of ethics and practice. Also involved in development of educational programs for insurance brokers. Membership is made up of provincial and regional brokers associations.

Insurance Bureau of Canada (IBC)

Trade association of Property/Casualty underwriters in Canada.

Insurance Crime Prevention Bureau (I.C.P.B)

A Canada wide organization supported by property and casualty insures which investigates fraudulent insurance claims and provides loss prevention information.

Insurance Institute of Canada (I.I.C.)

Provides educational services for the property and casualty insurance industry.

Insurance To Value

Insuring the full value of property, or at least to that value that meets the co-insurance requirement.


The person or corporation whose insurable interest is protected by the policy. Not limited to the insured named in the policy, but applies to anyone who is insured under the policy.


One who assumes risk or agrees to underwrite a contract of insurance.

Insurer’s Advisory Organization (I.A.O.) (1989) Inc.

National organization of Property/Casualty insurance industry that provides technical services in loss control engineering sciences, inspection, ratemaking, and actuarial sciences.

Insuring Agreement

Describes the coverages provided by the insurance policy.


A rebellion against the government.

Intangible Property

Property that has no physical substance and consists of legal rights rather than things. Intangible properties may be difficult to recognize and to value.


Consists of “legal rights” rather than things and includes patens, stocks, bonds, goodwill, trademarks, franchises, and copyrights.

Intended Use Doctrine

Two factors are considered in product liability cases: the maker’s marketing scheme, and the foreseeability of the risks which are inherent in the product when used for the purposes intended.


The state of mind with which an act is done or not done. Not to be confused with motive which is what prompts a person to act or not to act.


A legal claim in something. Any right in the nature of property, but less than title. See Insurable Interest.


To hinder.

Interim Receipt

The receipt issued for premium paid when an application for insurance is made. If rejected, the money is refunded, less the pro rata premium.


One who interferes in affairs which are none of his business.


An arbitrator. One who is employed to negotiate a matter between two parties, and who for that purpose may be agent of both; e.g., insurance broker.

Intermediate Excess

Coverage exposed to catastrophic losses and to policy limit exposures, exceeding probable maximum loss.

Interprovincial Carrier

One who commercially transports goods or passengers across provincial boundaries.

Intervening Cause

An independent cause which intervenes between the original wrongful act or the omission and the injury. When it turns aside the natural sequence of events and produces a result which would not otherwise have followed and which could not have been reasonably anticipated, the defendant is relived of liability.


When person dies without making a will or without leaving anything to testify how property is to be disposed of after his death.

In The Course Of Employment

Relates to time, place and circumstances under which accident occurred, and means such injury happened while worker was working in his employer’s service.


Under the influence of an intoxicating liquor.

Intoxicating Liquor

Liquor used as beverage, and which when consumed in sufficient quantities ordinarily produces entire or partial intoxication.


State whereby one does not have the normal used of his physical or mental faculties because of drinking intoxicants. In such instances, a person is rendered incapable of acting in the manner in which an ordinarily prudent and cautious person, in full possession of his faculties, using reasonable care, would act under similar circumstances.



Intrinsic Value

The inherent value of a thing itself, rather than any special features which make its market value different.


One who enters land without legal right.


Wrongfully entering upon or taking possession of property of another.


Overflow of waters from their natural bed or confines.


Not binding.


(a) Intruding upon the rights of another. (b) Encroachment of an army for conquest or plunder.

Invasion Of Privacy

Wrongful intrusion into one’s private affairs in such manner as to cause mental suffering, shame or humiliation to persons of ordinary sensibilities.


(a) Goods held for sale or lease. (b) Written schedule of goods on hand.


In the law of negligence, and with reference to trespasses on realty, the express or implied invitation to other to enter upon, remain in, or make use of one’s property.

Invitation To Bid

An advertisement for bids to be submitted on a particular job, usually containing all specifications necessary to make an informed bid.


To be an invite, one must (a) be invited either expressly or by implication; (b) enter in connection with the owner’s business or activity that is conducted on his land; and (c) there is mutuality of benefit or benefit to the owner.


A written account or itemized statement of merchandise shipped or sent to a purchaser together with the quantity, value or process and charges added.


Without power of choice.


That which cannot be changed.




Goods that are voluntarily thrown into the sea in a storm or other emergency for the purpose of lightening the ship.


In marine insurance, throwing the cargo or ship’s property overboard to save other property from a common danger.

Jewellers Block Insurance

Insurance policy specifically designed to insure broad exposures common to jewellery trade.

Jewellery Floater

All risk policy designed for scheduled jewellery wherever in may be.


Task or something to be done for a se fee or compensation.


Generally, a wholesaler. Middleman; one who dose piecework.


Coupled together in interest or liability.

Joint Action

An action brought by two or more as plaintiffs or against two or more as defendants.

Joint And Several Liabilities

It is the creditor’s option to sue one of several debtors individually, or any of them, or all of them. Also applies to law of torts. If more than one person commits a tort and injures another person, the group of tort-feasors would be jointly and severally liable for the damage. The injured person can elect to sue one, any or all of them.

Joint Defendants

Personas who are sued and tried together.

Joint Enterprise

Also called “common enterprise”.

Joint Liability

One wherein joint obligor has right to insist that co-obligor be joined as a co-defendant with him, that is, that they be sued jointly.

Joint Negligence

When people act together and either do something they should not do or fail to do something they should not do or fail to do something which they are obligated to do.

Joint Tort

Where one is injured due to the neglect of a common duty of two or more persons, the tort is joint.

Joint Tort-Feasors

Two or more persons jointly or severally liable in tort for the same injury to person or property.

Joint Venture

A partnership engaged in a business undertaking which terminates upon completion of the project or purpose.


Temporarily taking an automobile without the intent of a court.


Official decision of a court.


Pertaining to the administration of justice.

Judicial Bonds

Bonds required by court for appeals, costs, attachment, injunction, etc.

Judicial System

A jurisdiction’s network of courts.


Geographic area of authority. Also refers to power and authority of a court to hear and determine a judicial proceeding. In circumstances where obligation is on insured to provide notice to “authorities having jurisdiction” means those having authority to act, e.g., police.


A group of citizens temporarily selected and invested with power to make a decision in a court case after hearing all the evidence.

Jury Trial

Court case tried before a jury as opposed to before a judge.

Just Cause

Fair, adequate, reasonable cause.


One who has not reached his legal majority age. In most common meaning, refers to young criminal offender.



Key Man Insurance

Protects companies against financial loss on the death or disability of a valued employee, or by partnership to provide founds with which to buy out the interest of such partner on his death or disability.


The forcible abduction and carrying away of another person against his will.


Class, grade.

King’s (Queen’s) Bench

One of the superior courts of common law in England. Derives its mane from fact that king or queen used to sit there in person.

Kinnie Rule

A rule used by adjusters in apportioning losses between non-concurrent policies.

Knock-For-Knock Agreement

Agreement between certain automobile insurers whereby each agrees to pay their insured’s collision claim and waive any recovery rights against the other insurer.


To understand.


Being acquainted with the facts or truth.


Consciously and intentionally.




Bill of See Bill Of Lading.

Labour And Material Payment Bond

Contract bond guaranteeing that the sub trades and suppliers will be paid for the work and materials that enter into the project.


Generally, the materials of the earth, including fields, meadows, moors, waters, and rock.


One who owns property and leases it to another.

Landlord And Tenant Relationship

Denotes the contractual relationship between lessor and lessee.

Land restoration Bond

Bond guaranteeing land will be restored to an acceptable condition, e.g., garbage disposal sites, quarries, etc.


Termination of insurance policy because of failure to pay the premium.

Lapsed Policy

Insurance policy on which there has been default in payment of premiums.


Unlawful taking away of goods or property of another without the owner’s consent and against his will.

Last Clear Chance Doctrine

This doctrine imposes upon one a duty to exercise ordinary care to avoid injury to another who has negligently put himself in a dangerous position, and who appears not to recognize the danger or is unable to avoid it. Necessary elements of doctrine of “last clear chance” are: (1) plaintiff was negligent by placing himself in a position of immediate danger, (2) plaintiff was unable to remove himself from such peril by the exercise of reasonable care, (3) defendant discovered or should have discovered plaintiff’s dangerous situation in time so that by exercising reasonable care he could have erbe3nted the accident, (4) defendant failed to exercise any reasonable care, and (5) defendant had the last clear chance to prevent the accident.

Latent Defect

A hidden or concealed defect which could not be discovered by reasonable and customary inspection.


A body of rules of action or conduct having binding legal force.


Legal,not forbidden by the law.

Law of Agency

A body of common law that govern the right s and responsibilities that arise when one entity represents another.

Law Of Large Numbers

Premise on which insurance is built, that being that the degree of uncertainty is reduced as the number of events increases. A basis for predicting losses likely to occur in large group of similar risks.

Lay-up Endorsement

Used in aircraft and marine insurance. Allows for refund of a portion of a portion of the premium when aircraft/vessel is not used for extended period of time.

Layer Rating

Method of establishing policy premium by assigning rates to various layers of coverage, according to the probability of loss in each layer.

Lead Company

Normally, the insurer accepting the largest share of a risk on a subscription policy.


Involves guiding the activities of employees and creating an environment where employees will excel at what they do for mutual benefits of the employees themselves and the brokerage overall.


Diminution of liquid caused by leaking form the container in which it was placed.


An agreement which gives rise to relationship of landlord and tenant (real property) or

lessor and lessee (real or personal property). The party who conveys is called the “lessor,” and the party to whom conveyed, the “lessee.”

Lease Bond

Bond given to lessor (landlord) guaranteeing the lessee (tenant) will perform the terms of the lease.

Leasehold Improvements

Interest of lessee in value of lease which is the difference between the total remaining rent under the lease and that which lessee would currently pay for similar space for the same time period.

Leasehold Value

The value of the lease when market rental for similar space is higher than rent paid under the lease. The value of a leasehold interest.


Permitted by law.

Legal Age

The age at which person may enter into binding contracts or commit other legal acts, in most provinces age 18. However, the age may be higher for certain acts, such as drinking, or lower for other acts, such as driving.

Legal Assignment

The old courts of Law considered it wrong in principle to make one person another’s debtor without the debtor’s consent.

Legal Cause

In tort law, when one invades some legally protected interest of another, the person causing such harm shall be responsible unless there is some defense to liability.

Legal Description

The description of real property by government survey or lot numbers which includes a description of any easements on the property.

Legal Duty

An obligation arising from law or a contract which the parties have entered into.

Legal Entity

A body, other than a natural person, which exists sufficiently so that it can function legally, be sued or sue, and make decisions, such as corporations.

Legal Injury

Violation of legal right.

Legalized Nuisance

Something which would constitute a nuisance at common law but because it is constructed or maintained under sufficient legislative authority, cannot be objected to by private person, e.g., hospitals, municipal parks.

Legal Liability

A liability which courts recognize and enforce on individuals or corporations to pay for harm done to others.

Legal Liable

Liability imposed by law or liability which law fixed by contract.

Legal Name

To be legal, consists of one Christian name and one surname. The addition, deletion or mistake in middle name or initial is of no legal consequence.

Legal Negligence

The failure to perform duty law imposes on one party for the benefit of another.

Legal Obligation

Any duty that is imposed by law.

Legal Proceedings

All proceedings authorized by law which are brought in a court for the purpose of acquiring a right or enforcing a remedy.

Legal Representative

One who represents the interests of another.

Legal Residence

The dwelling place where one permanently lives and to which he intends to return despite temporary residences elsewhere or despite temporary absences.

Legal Right

All those rights one enjoys, including natural rights, rights existing as result of contract, and tights created or recognized by law.

Legal Subrogation

Whereby person secondarily liable pays debt and becomes subrogated to rights of creditor.

Legal Tender

All coins and currencies of Canada.


The body of persons that makes statutory law for a state or nation.


To give something for fixed period of time, with or without compensation.


One from whom something is borrowed.


One who rents property from another under a lease, e.g., a tenant.

Lessee’s Interest

For purposes of determining value of potential sublease or sale of lease, is market value without the lease is the measure of the lessor’s interest.


One who rents property to another under a lease, e.g., a landlord.


Award a contract to successful bidder.

Letter Of Credit

Method of payment between buyer and seller. A negotiable instrument in from of a letter which requests person or bank to advance money or credit to a third person. The person or bank giving the letter agrees to repay the person or bank making the advancement so long as it complies with the conditions specified in the credit.

Letters Patent

Instrument issued by a government confirming a right to the exclusive possession and enjoyment of land, or of a new invention or discovery.

Letting Out

Leasing property or awarding a contract.


All character of debts and obligations.

Accrued Liability

Obligation which has been incurred but not yet paid; e.g., lease payment, taxes.

Contingent Liability

A liability not yet fixed but dependent on events to occur in the future (e.g. a pending law suit)

Fixed Liability

One fixed as to time, amount, etc.; e.g. mortgage.

Joint And Several Liability

Responsible together and individually.

Joint Liability

Liability for which more than one person is responsible.

Primary Liability

A liability for which a person is directly responsible.

Secondary Liability

A contingent liability.

Strict Liability

A person is presumed to be guilty of an offence without the requirement on the plaintiff to prove negligence. Generally applicable when injury or damage caused by dangerous activities, hazardous products, etc.

Liability Created By Statute

A liability which would not exist but for a statute.

Liability For Damages

Liability for an amount to be determined by the courts.

Liability Imposed By Law

Liability imposed in a definite sum by a final judgment against insured.

Liability Insurance

Covers against third party claims for bodily injury and property damage for which the insured is legally liable.

Liability Limits

Maximum amount of insurance provided under a policy of liability insurance.


Responsible; answerable.


Written defamation expressed by print, writing, pictures, or signs.


Permission to do something.

License Bond

Required by government authority as a precondition to the granting of a license. Guarantees payment to oblige for loss or damage resulting from licensee’s failure to conduct business in compliance with regulations pertaining to it and for violation of the duties and obligations imposed upon him.


One who comes on to the premises for his own purpose but with the occupier’s consent Generally, the duty of care owed by the occupier is that of reasonable or due care. See also Invitee.


False statement deliberately told with the intent to deceive.


A claim or charge on real or personal property for payment of some debt, duty or obligation.

Lien Bond

Guarantees that any valid lien claim will be paid.

Life Expectancy

Average number of years of life remaining for persons of a given age and sex, according to statistical tables.

Life Insurance

Policy in which insurer agrees to pay a specified sum to a beneficiary on the death of the insured.


Corresponding in quantity, quality, or degree.

Like Kind And Quality

Clause found in property insurance policies which limits the liability of the insurer for property lost or damaged to property of “like kind and quality.”


Less than reasonably certain.





Statute Of Limitations

Prescribes the periods within which actions may be brought or within which certain rights may be enforced.

Limit Of Liability

Maximum amount stated in a policy which an insurer is obligated to pay in event of a loss.

Limited Partner

One whose liability to third party creditors is limited to the amount he has invested in the partnership.

Limited Partnership

Partnership consisting of one or more general partners who manage business and who are personally liable for partnership debts, and one or more limited partners who contribute capital and share in profits but take no part in running business and incur no liability with respect to partnership obligations beyond the amount of their contribution.


In insurance, term used to refer to types of policies or exposures making up an account or class of business written by an insurer.

Line Guide

Underwriting standard or guideline representing the maximum amounts of insurance which a company is prepared to write on various classes of risk.

Line Of Credit

The maximum Borrowing power of a person from a financial institution.

Line Security

The ability of the telephone line to withstand tempering.

Liquid Assets

Cash or assets that can be converted immediately to cash.

Liquidated Damages

The amount of damages as determined by judgment or such sum as is specified by parties to bond or other contract as amount available to one party when the agreement has been breached by the other.

Liquidated Damages Clause

A clause that sets out the “cost” of breaching the contracts, right in the contract itself.


Winding up of a business. Process of reducing assets to cash discharging and liabilities and dividing surplus or loss among creditors and debtors.


A receiver appointed for the purpose of winding up a company.

Liquidator’s Bond

Bond guaranteeing faithful performance of a liquidator’s (receiver’s) duties.


Refers to condition of person or business in terms of their ability to convert assets into cash.


Party to a lawsuit.


To carry one a lawsuit.


A lawsuit.


Rental of vehicles, boats.


Domestic animals raised or used on a farm, including fur bearing animals raised in captivity.

Livestock Insurance

Insurance policy designed to insure livestock for death resulting or made necessary from a variety of causes.

Lloyd’s Of London

An insurance market in London where individual underwriters gather for the purpose of transacting insurance.

Lloyds Register

Detailed record of ships of all nationalities. Information regarding age, dimensions, place of construction, registry, and ownership is provided for each vessel.

Lloyds Underwriters

An aggregation of individuals engaging in business under a common name and for profit. Business is done through an attorney-in-fact who has the authority to obligate the underwriters severally on contracts of insurance made or issued by it, in the name of the aggregation of individuals, to and with any person(s) insured.


The rate over and above the fire rate which is charged by the insurer to provide additional policy coverages. Also the difference between gross and net premiums.


Something given to a person for temporary use, with or without compensation for its use.

Loaned Servant Doctrine

Under this doctrine, when one lends his servant to another for a particular employment, that servant effectively becomes the servant of the one to whom his is lent.

Lock Replacement

To replace the locks and keys after an insured theft.


A withholding of work from employees; counterpart of employee’s strike.


One who has use without actual or exclusive possession.


Furnished or unfurnished area in anther’s house, occupied for habitation.


In insurance, the reduction in value of a property occasioned by a peril against which insurance is granted. Also, a state of fact of being lost, ruined or destroyed.

Loss Adjustment Expense

Insurer’s expenses incurred to adjust a loss.

Loss (Risk) Control

As relates to risk management, those techniques which serve to reduce the frequency and severity of losses.

Loss Expectancy

The expected cost of losses over a specific period.

Loss Exposure

As relates to risk management, the chance of financial loss to the organization as the result of a particular peril striking a thing of value.

Loss Of Earning Capacity

Damage to one’s ability to earn wages in the future.

Loss Payable Clause

A provision in property insurance that authorizes payments to persons other than the insured to the extent that they have an insurable interest in the property, e.g., mortgagee.

Loss Payee

Person named in insurance policy who will be paid in event of loss.

Loss Prevention

As relates to risk management, any measure taken to reduce the frequency of a particular loss.

Loss Probability

Likelihood a loss occurring.

Loss Ratio

Proportion between earned premiums and loss payments, including adjustment expense, made over a specified period.

Loss Reserve

Assets aside by insurance company to pay for losses which will probably arise or which have arisen but have not been paid.

Loss Outstanding

Losses which have been incurred but not yet paid.


That which the owner has involuntarily lost possession or custody of, usually as a result of accident or his own negligence and which cannot be recovered by an ordinarily diligent search. In marine insurance the term means “Lost at sea,” whereby a vessel has totally gone from the owners against their will and of which they are unaware.

Lost Instrument Bond

Indemnities the issuer of a duplicate stock or bond against any loss it may suffer by reason of having issued the duplicate.

Lost Or Not Lost

In marine insurance, a provision which provision which provides coverage back to the beginning of a voyage now in progress, notwithstanding that the loss occurred before the contract of insurance was concluded, unless the assureds were aware of the loss and the underwriters were not.

Lost Property

Property involuntarily parted with and which the owner does not know where to find.

Lowest Responsible Bidder

Bidder who has lowest price and has evidenced by prior performance that he is financially able and competent to complete work.



Lump Sum Contract

Contract for a fixed price.



Magnet Property

Business that have the ability to bring large number of customers to an area. These businesses can also be called anchor or leader properties.


Mailable matter which is properly addressed, stamped with the proper postage, and deposited in a proper place for receipt of mail.

Mail Fraud

The use of the mails to execute a fraudulent scheme.

Mail Service Contract Bond

Bond which guarantees that mail delivery will take place as contracted.


To cripple; mutilate; disable.


Up Keeping and preserving the condition of the property.

Maintenance Bond

Contract bond guarantees that obligations imposed by law and in contract upon the principal for repair or replacement of defective work and materials will be fulfilled for a stipulated period of time after completion of a job.


Legal age

Majority Shareholder

A party holding or controlling more than fifty percent of the issued shares of a corporation - has all control over a corporation and can act with little regard for the interests or the minority shareholders.


Performing an unlawful act. Also, any wrongful conduct that affects, interrupts or interferes with the performance of official duties.


The doing of a wrongful act with an intent to inflict injury or damage.


Having done with wicked or mischievous intentions or motives

Malicious Act

An unlawful act intentionally done to injure another.

Malicious Mischief

Willful destruction of personal property of another from actual ill will or perverse intent.

Malicious Prosecution

A suit begun in malice without probable cause to believe the charges can be sustained.

Malicious Trespass

The act of one who maliciously injures or causes to be injured any property of another.


Failure of a person who renders professional services to exercise the degree of skill and learning commonly applied by a professional person, with resultant injury, loss or damage.

Malpractice Insurance

Insurance covering legal liability of certain professionals, e.g., medical practitioners, dentists, pharmacists, for loss sustained because of the rendering or failure to render professional services.


Management is the process of achieving brokerage strategies, objectives, and goals through involving human and other resources. It is a purposeful activity requiring intelligence, skill, and practice.


(a) Self-evident. (b) Document used in shipping and warehousing containing a list of the contents, value, origin, carrier and destination of the goods to be shipped or warehoused.

Manifestation Theory

Under this theory, bodily injuries or property damages that become apparent or manifest themselves trigger coverage of the policy in effect at the time that the injury becomes apparent.


Document provided by insurer to its agents outlining underwriting rules and rates to be charged.

Manual Rates

Usually the cost of a unit of insurance or bond protection as published in the pertinent company manuals, but may also refer to rates developed by the application of a recognized rating plan.


The product of an author’s work which is submitted to the publisher either in his own hand or typewritten.

Manuscript Wording

In insurance, a policy form or wording which does not conform to standard wordings in general use and which is often unique to the risk being undertaken. Usually developed by the broker.


To make defective, especially by cutting off or defacing.

Marine Insurance

Insurance against certain perils or sea risks to which one’s ship, freight, and cargo (or some of them) may be exposed during a certain voyage or a fixed period of time.

Marine Risk

Perils of the sea.

Marine Syndicates

Groups of insurance companies providing ocean marine insurance. Such insurers are also actively involved in actual inspection and setting of standards for risks undertaken by them.


Pertaining to navigable waters.

Maritime Low

System of law specifically related to marine commerce and navigation.

Market Price

The price at which a seller is ready and willing to sell and buyer ready and willing to buy.

Market Value

The highest price a willing buyer would pay and willing seller accept.


A system of business activities which are designed to plan, promote, price and distribute want-satisfying products, services and ideas to target markets in order to achieve the objectives of both the consumer and the company.


Legal union of one man and one woman as husband and wife.

Masonry Construction

A form of construction which incorporates self-supporting walls of masonry, except that its floors and roofs may be of combustible materials, e.g., wood.

Mass Merchandising

Whereby a group of persons insure with one insure under the terms of master agreement.


One who employs another and controls their conduct in the performance of that employment.

Master And Servant

This relationship exists where the employer has the right to select the employee, the power to remove and discharge him and the right to direct both what work shall be done and the manner in which it shall be done. This relationship is normally now called “employer and employee”.

Master Of A Ship

The captain.

Master Policy

An insurance policy which covers a group of persons, e.g., health or life insurance. Usually, there is only one master policy and the participants are provided with certificates to show their participation.


Important; necessary.

Material Change

When there is an urgent need to terminate the policy, the insurer will sometime choose to reduce the period of notice. The introduction of a material change or misrepresentation of a material fact which is revealed on an inspection of the insured’s premises may be reason for the insurer to want to terminate the contract as quickly as possible.

Material Fact

A fact which, if the insurer knew about it, would cause it to decline the insurance altogether, or charge a higher premium for accepting it.

Material Loss

For a negligence action to succeed, there must be a material loss.

Material Representation

A statement which is so important as to be the basis of an action if such representation is false.

Maximum Possible Loss

The largest loss which could occur under the circumstances.

Maximum Probable Loss

Largest loss which underwriter considers likely to occur, based on his experience and judgment.

Mechanical Breakdown

A failure in the working mechanism of the machinery.

Mechanic’s Lien

Created by provincial statutes, a claim which secures priority of payment for work performed and materials furnished in erecting or repairing a building or other structure. Applies to the land as well as buildings and improvement erected thereon and covers material men, tradesmen, suppliers, and the kike, who furnish services, labour, or materials on construction or improvement of property.


The materials, including diskettes, tapes and punch cards upon which data or information is recorded.


Act of a third party to intervene between two parties with a view to persuading them to adjust or settle their dispute.


One who intervenes between parties in dispute with a view to reconcile them.

Medical Payments Insurance

Insurance coverage provided by most liability policies and which insures specified medical expenses of others regardless of insured’s legal liability.

Meeting Of Minds

The parties’ mutual agreement to substance and terms of a contract.


Relating to the mind.

Mental Anguish

When connected with a physical injury, includes pain and accompanying feelings of distress, fright, and anxiety. In other connections, includes the mental suffering resulting from emotions including grief, severe disappointment, indignation, wounded pride, shame, public humiliation, despair, etc.

Mental Capacity Or Competence

Relates to the nature and effect of one’s acts and business and the ability of a person to understand same.

Mental Incapacity

Exists when one is incapable of understanding and acting with discretion in the ordinary affairs of life.

Mercantile Risk

One having to do with the business of buying and selling merchandise.


Goods which merchants usually buy and sell.


One engaged in the buying and selling of goods.


Implied warranty under Sale of Goods Act requiring goods to be fit for the ordinary purposes for which they are to be used.

Merit Rating

A rating system in which the applicant’s loss experience is a factor in rate determination.


The insured or a partner of the insured or any employee who is duly authorized by the insured to have the care and custody of the insured property outside the premises.


One who bring parties together for the purpose of making their own contracts. Also, one who buys goods from a manufacturer and resells them at a higher price.


A superficial growth produced on damp or decaying organic matter. Also, know as mold.

Mill Construction

Building construction characterized by thick masonry walls and heavy wooden floors. Frequently found in older factories and warehouse.

Minimum Retained Premium

The minimum amount of premium an insurer will retain in the event the policy is canceled prior to its expiry.


A person under the age of legal competence, usually 18 years of age.


Where bullion ins coined into money.


The act of turning to a wrong purpose.

Miscellaneous Bond

Surety bond other than a contract bond, e.g., license and permit bonds.


In “malicious mischief,” it denotes a wanton or reckless injury to persons or property.


Unlawful behaviour by a person entrusted in any degree

with the administration of justice, by which the rights of the parties and the justice of the, case may have been affected.


Delivery of mail, freight, etc. to one other than who is authorized to receive it.


An error in the description of the subject matter of a contract which is misleading in a material or substantial point.


The improper performance of some lawful act.


Meant to lead into error.


Wrong name.


A false statement by insured about a material fact made knowingly and with intent to deceive or which insured states positively as true, not knowing it to be so, and which has a tendency to mislead. One that would influence a prudent insurer in determining whether or not to accept the risk, or the rate to be charged for insuring such risk.

Mission Statement

The mission is the particular aim that sets a brokerage apart from other brokerage. The mission is the organization’s purpose of existence.


an unintentional act, omission, or error.


Gathering of many people acting in an unlawful, violent or disorderly manner. Synonymous with “riot”

Mobile Home

A home which is factory built on its own chassis and which can be easily moved.


To alter or change.


Generally, having to do with money.


Coin and paper currency authorized by law which circulates as the medium of exchange.

Money Order

A negotiable draft used by the purchaser as a substitute for cheque. Issued by bank, post offices, express companies, etc.

Montrose Chemical Theory

The continuous trigger theory, but add that all the events from the initial injuring event through the commencement of the lawsuits right up to the day of trail were triggering. This approach combined the continuous trigger approach and occurrence policies, which first came into effect during the course of the lawsuit, even though the loss was obviously known to both the insured and the insurer.

Moral Hazard

Subjective characteristics of the applicant that could cause a peril to occur.

Morale Hazard

Arises out of carelessness or indifference to loss because of the presence of insurance.

Mortgage Clause

Clause in insurance policies that protects the interest of mortgagee.

Mortgage Insurance

Insurance policy designed to cover the


The one taking or receiving a mortgage.


The party to a mortgage who, in order to secure a mortgage loan, gives legal title or a lien to the mortgagee.

Motor Truck Cargo Policy (Carrier’s Form)

Covers goods of others while being transported on insured’s vehicles.

Motor Truck Cargo Policy (Owner’s Form)

Covers the insured’s own goods or goods of others for which he is responsible while being transported on insured’s vehicle, or by such other means as specified by the policy.

Multi-Peril Policy

Insurance contract which combines a variety of insurances, e.g., property, crime, liability.

Municipal Ordinance

A law or rule enacted by a municipal corporation for the proper conduct of its affairs, e.g., zoning, building codes.

Mutual Insurance Company

Type of insurance company having no capital stock and in which the policyholders are the owners.

Mysterious Disappearance

Involves the loss of property under circumstances which cannot be explained.



Named Insured

The person specifically named in the policy, usually the one initiating the contract.

Named Peril Policy

A policy of insurance in which the perils insured against are listed or named.

Natural And Probable Consequences

Those consequences that normally result out of certain acts and which a prudent person can anticipate as likely to happen again, all circumstances being the same.

Natural Disaster

Disaster caused by forces of nature, e.g., earthquake, lightning, tornado, etc.


Able to be navigated by ships and vessels.

Navigable Waters

Waters which afford a channel for the passage of ships and vessels engaged in useful commerce.


Adjacent, contiguous, abutting.


Those things that are indispensable for the sustenance of human life.


Meaning depends on context in which it is used. May import that which is convenient, indispensable, or an absolute physical necessity.


The omitting or failing to do a thing that can be done or is required to be done. May also denote an absence of care or attention in the doing or omission of a given act.


Failure to use that degree of care which an ordinary person of reasonable prudence would use under the given circumstances.

Doctrine Of Negligence

Rests on duty of every person to exercise due care in his conduct toward others from which injury may result.

Contributory Negligence

Conduct by plaintiff which is a contributing cause which cooperates with the defendant’s negligence in causing the plaintiffs harm.

Gross Negligence

The deliberate or intentional failure to perform a clear duty in reckless disregard of the consequences on the life or property of another.

Ordinary Negligence

The failure to exercise care of an ordinarily prudent person in similar circumstances.

Wilful, Wanton Or Reckless Negligence

When one intentionally acts unreasonably in disregard of a risk known to him or which is obvious and so great as to make it highly probable that harm would follow.

Negligence In Law

Such as that which grows out of failure to observe a duty prescribed by law

Negligence Per Se That which is self-evident, i.e., conduct which clearly was not that of a careful person.

Negligent Misrepresentation

Occurs when the person making the misrepresentation should have known, but was careless, about the truth of the representation.


Transferable by endorsement, including cheques, notes, stocks, bearer bonds.

Negotiable Instrument

Things having value that may be transferred from one to another in the normal course of business, e.g., cash money, cheque, bond, etc.

Negotiated ADR

Negotiated ADR can be iterative and occur as part of other forms of dispute resolution. Critical to negotiated ADR is the authority or power to grant something to the other party that satisfies their need, whether expressed or implied.

Net Income

Income remaining after all expenses and deductions have been considered.

Net Line

The amount of liability the insurance company is prepared to expose to loss for its own account.

Net Lease

Lease in which, in addition to rent, requires the lease to pay taxes, insurance and maintenance charges.

Met Loss

Actual loss sustained by the insurer after deducting recoveries, salvage, subrogation, and reinsurance.

Net Premium

Amount of original premium remaining after deducting premium refunds to the insured and reinsurance premiums

Net Premium eared

That part of net written premium which relates to the expired portion of the policy term.

Net Premium Written

Total premiums written by an insurer after deducting reinsurance premiums and refunded premiums.

Net Profit

Profits after deduction of all expenses, the amount of which may be classified as net before or after tax.

Net Rent

Basic rent charged plus additional monthly charges for taxes, utilities and maintenance.

Net Worth

Amount of money remaining after all assets have been liquidated and all liabilities cleared.

New For Old

In marine insurance, a term referring to the practice of applying a depreciation discount to new parts or equipment that are used to replace old ones that have been lost or damaged.

Newly Acquired Automobile

A newly acquired automobile is automatically insured when it

(a) replaces an automobile described on the policy. (b) is in addition to others owned by the insured and which are all insured by the same insurer. (Not applicable in British Columbia).

Newly Acquired Location

Equipment and stock at any acquired location that is owned, rented or controlled by the insured in whole or in part or on vehicles within 100 meters of such location. This limit of insurance attaches at the time of the acquisition and extends for a period of 30 days or to the endorsement of this form adding such location whichever first occurs.

Next Of Kin

Those who are most nearly related to the decedent by blood. May include other persons who bear no relation of kinship at all, e.g., relationship existing by reason of marriage.

No Fault

A type of automobile insurance in which each person’s own insurance company pays for injury or damage up to a certain limit regardless of whether its insured was actually at fault.


Not cancellable, so long as premium has been paid.


Materials which will not ignite or burn when subjected to fire.

Non-Concurrent Insurance

When two or more policies on the same risk do not provide identical coverage.


When carrier, vendor or bailee neglects, fails, or refuses to deliver goods.


A failure to reveal facts. If applicant for insurance does not disclose all material facts, he is guilty of non-disclosure and may risk having coverage voided.


Failure or neglect to perform duties as agree to.


A risk free from the average hazards of all classes of risk, or not involving the ordinary or average hazard of its class.

Noninsurable Risk

One which is not subject to evaluation by actuarial means and for which insurance will not be written.


Streams or bodies for water not affected by tide.


That which is not capable of passing title or property by endorsement and delivery.

Non-Owned Automobile Insurance

Covers the insured against third party claims arising out of automobiles not owned in whole or in part by or licensed in the name of the insured.


Failure to pay a debit when due.


Failure to perform an act agreed upon.

Non-Proprietary Insurers

Includes mutual, reciprocal exchanges and miscellaneous co-operatives. They are organized for reasons other than profit. They are owned and controlled by their policyholders who have banded together to secure insurance at as low a cost as possible. No stock or share capital are involved.

Non-statutory Bond

Bonds not required by law but flow from the contract or agreement between the parties. Contract bonds used in the construction trade fall into this category.

Non-Waiver Agreement

An agreement signed by insured after a loss which allows insurer to investigate and determine amount of damage without such action being perceived as an admission of liability. Generally, used when the insured is in violation of a policy condition and there is some question about whether or not the insurer will pay the loss.

Normal Course Of Transit

The orderly transit of merchandise from the point of origin to the final destination without interruptions or delays resulting from the action or inaction of any party at interest.

Notary Public

One appointed by provincial Lieutenant-Governor and who is, generally, authorized to administer oaths and to attest to the authenticity of signatures.

Notice Of Abandonment

In marine insurance, a condition which must precede a constructive total loss. If the insured fails to give notice to the underwriter, the loss can be treated only as a partial loss unless an actual total loss is proven.

Notice of Accident or Occurrence

When an accident or occurrence takes place and it appears that it may involve liability against anyone insured by this policy under the coverage provided, written notice must be sent to us as soon as practicable.

Notice Of Loss

Once a loss has been sustained, the conditions of the insurance policy stipulate that the insured must immediately make written notice to the insurance company advising of such loss.

Notice Of Termination

Notice respecting termination of insurance contracts may be given by the insured or insurer and may be different for different types of policies. Terms of termination are contained in policy.


The process by which a property and casualty insurance company, with full disclosure by the transferee, accepts a new client in place of the original policyholder is not an assignment. It must be an amendment to, or rewrite of, the original policy. This is the case because in contract law a significant modification to an ongoing agreement. Novation is essentially a new contract, although it will usually be with the original parties and on the same subject matter. Novation, in certain instances, completely releases parties from their obligations under and existing contract.


Some thing which causes injury, especially to health or morals.

Nuclear Insurance Association of Canada

Provides nuclear property and liability insurance for risks in Canada


Having no validity. When used in connection with “void” in a contract or statute, means “voidable”.

Numismatic Property

including coin albums, containers, frames, card and display cabinets used in connection with such collections that are owned by or in the custody or control of the insured.




An affirmation of truth of a statement. One who willfully asserts untrue statements omits perjury which is punishable at law.


To bind by obligation or promise; to assume a duty.


an undertaking to perform, whether it be imposed by law, promise, contract, relations of society, courtesy, etc.

Obligatory Treaty

Reinsurance contract under which the insurer must cede to the rein surer and the reinsurer must accept all risks covered by the treaty.


The person, firm, or corporation to whom someone else is obligated under a contract.


One obligated under a contract or bond. Under a bond, both the principal and surety are obligors.


Offensive to accepted standards of decency.


The decline in a property’s value which is unrelated to physical changes in the asset itself but which is instead due to changes in technology and public taste which render the property less desirable on the market. See Functional Obsolescence.


Something which is no longer in use.


To block up or impede.


Taking possession of property and using it. In insurance, implies the use of the building only for those purposes described in the policy.


Person who has use, possession or control of a thing.


(a) Possession; use. (b) That which takes up most of one’s time and energies, e.g., business or employment.

Occupational Hazard

The risk of accident or disease which is associated with a specific occupation.


An occupant.


Generally, an unexpected event. In commercial liability policies usually defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions”

Ocean Marine Insurance

See Marine Insurance.


A felony or misdemeanor in breach of a criminal law.


As relates to nuisance is synonymous with “obnoxious” and means objectionable, disagreeable, displeasing and distasteful.


A proposal to do a thing or pay an amount which, when accepted, constitutes a contract.

Offer And Acceptance

Two elements of a contract constituting mutual assent.


Person holding office of trust or authority in corporation, government, armed services, etc.


An official who represents citizens before the government.


Neglect to do what the law requires.


For all

Omnibus Clause

In insurance, clause which extends coverage to other persons, e.g., the automobile policy which extends to cover any other person driving the vehicle with the insured’s consent.

On Board Bill Of Lading

A bill of lading confirming the receipt of merchandise and the fact that it was loaded on board the ocean vessel.

On Deck Bill Of Lading

A bill of lading which states that the cargo has been stowed on deck and is at the shipper’s risk. The carrier is not liable for loss or damage unless due to gross negligence.


Burden of Proof. See Burden of Proof.

Open Account

Credit extended to buyer which permits him to make purchases without a note or security, based on his past credit rating.

Open Bid

A contractor’s bid in which he reserves the right to reduce his bid to compete with a lower one.

Open Cargo Policy

In marine insurance, policy designed for persons having a regular turnover of goods in transit and which covers all sendings within the scope of insurance. Premiums are debited monthly or quarterly.

Open Credit

Life of credit which allows one to borrow or purchase to a set limit without having to post security or re-establish credit limit.

Open-End Credit

Credit plan whereby one pays a part of what he owes each month on several difference purchase, e.g., credit cards.

Operating Affiliation

Operating Affiliations are ways the brokerage can draw upon support from within the insurance industry to achieve its marketing and sales goals.

Operating Income

An insurance company’s net investment income plus net underwriting income in a specific time period.

Operating Ratio

An index of insurer’s current underwriting performance as based on combination of both the loss and expense ratios for a specified period.

Operational Values

Can be extrapolated from the day-to-day achieves of the individual members of the brokerage. It is how we would describe an individual’s typical actions. Operational values are made evident by how we perform.

Oppression Actions

Permits shareholders, in addition to a number of other parties, to gain access to the corporation’s assets and, at times, to the directors.

Optional Settlement Clause

Clause in insurance policy which allows insured to select method in which settlement will be made, e.g., Homeowners Forms allow for settlement of claim to dwelling on either of ACV or replacement cost at option of insured.


Spoken as opposed to written.

Oral Contract

Contract which depends on spoken words.

Order Bill Of Lading

Bill of lading stipulating goods be delivered to the order of the named consignee, i.e., others may take delivery of the goods on the consignee’s behalf.


Equivalent of municipal statute dealing with matters not covered by federal or provincial law, e.g., zoning, building safety, etc.


adj. Normal.

Ordinary Care

Degree of care which persons of ordinary care and prudence are accustomed to use and employ, under the same or similar circumstances. Substantially synonymous with “reasonable” or “due care.”

Ordinary Construction

Buildings having exterior bearing walls of non-combustible construction and roofs, floors and interior framing wholly or partly of wood or other combustible material.

Ordinary Life

Also called Straight Life or Whole Life, life insurance policy in which insured pays premiums as long as he lives and the insurer pays the face amount to the beneficiary upon the insured’s death.

Ordinary Payroll Expense

The entire payroll expense for all employees of the insured, except officers, executives, department managers, employees under contract and other important employees whose services would not be dispensed with should the business be interfered with or interrupted.


Any legal or commercial entity, e.g., corporation, government, business trust, estate, trust, partnership or association, etc.

Other Insurance

Clause found in property insurance policies stating what is to be done in event other than policies cover the same property.


Building used in connection with a main building and generally separated from it, e.g., strange shed, garage.

Out-Of-Court Settlement

Settlement which takes place between parties in a pending suit without being referred to the court.

Out-Of-Pocket Expenses

Such expenditures as are usually paid for with cash.

Overage Additional Premium

In marine insurance, the additional premium charged on an open cover declaration where the carrying vessel is outside the scope of the classification clause. It may also be applied to additional premium charged for breach of navigational warranties where the ship is more than 15 years old.


Costs not directly associated with producing goods or services, e.g., rent, property taxes.


When a risk is insured for more than its far or reasonable value. See Double Insurance.

Overlapping insurance

When two different kinds of policies cover the same loss.


Load too heavily

Overriding Commission

Commission which is in excess of that normally paid, usually to cover additional costs incurred in supervision and administration of others.

Overt Act

An open act from which criminality may be implied.


Beyond regular working hours.


To have a legal or rightful title to something.


One in whom ownership in vested.


The rights to use and enjoy property to the exclusion of others.




Property and Casualty Insurance Compensation Corporation. Membership in this industry-funded plan is a condition of licensing and the amount contributed by each insurance company is based on the total amount of direct premiums written.


A packet for transportation or commercial handling.

Package Policy

Policy which covers two or more lines or types of insurance in the same policy.

Packing List

Document which accompanies the package being shipped which details the contents, weight and other information.

Paid Losses

Losses actually paid by insurer during specified period of time.

Pain And Suffering

Physical discomfort and distress, as well as mental and emotional trauma recoverable as damages in a tort action.

Pair & Set Clause

Additional Condition contained in property insurance policies which states that loss to only one item of a pair or set does not constitute loss or damage to the entire pair or set.


Extension of a fire wall beyond the roof level.


Small package.

Parental Liability

If damage results from negligent control of parents over the act of their child, they may be held liable.

Pareto Principle (the 80:20 rule)

“A minority of input produces the majority of results.”


Not general or total.

Partial Disability

When injured party is unable to perform part of usual takes of his job or is only able to perform labour of a less remunerative class than he performed before the injury.

Partial Loss

A loss under an insurance policy which does not either completely destroy or render worthless the insured property, or which does not exhaust the insurance limits applying thereto.


Whereby the insured participates in each covered loss incurred on a percentage basis, e.g., coinsurance, percentage deductible, etc.’


Single or individual, as opposed to general.

Particular Average

In marine insurance, a partial loss to a specific shipment, other than a general average.


A member of partnership of firm.


Contract between two or more people to enter into a lawful business, with it being understood that there shall be a proportional sharing of the profits and losses between them.

General Partnership

One in which all parties work for the benefit and profit of all. All parties share equally in the profits and losses though the capital contributions of each may vary.

Limited Partnership

Partnership consisting of one or more general partners who manage business and who are personally liable for partnership debts, and one or more limited partners who contribute capital and share in profits but take no part in running business and incur no liability with respect to partnership obligations beyond the amount of their contribution.

Partnership Insurance

Insurance purchased on life or health of business partners to enable business to continue in event of disability or death of a partner.


One who is bringing a suit, or against whom a legal suit is brought, I, e., a plaintiff or defendant.


Government grant to investor which gives him exclusive right to make, use and sell his invention for a specified period.


A bailment of goods to a creditor, as security for some debt or engagement.


One to whom money is paid.


One who pays money.

Payroll Audit

When incorporated into policy, gives insurer right to audit insured’s payroll to determine the final premium due.

Peak Season Endorsement

Provides increased coverage for stock inventories during peak season


Fraudulent misappropriation of another’s property entrusted to one’s care.




One travelling on foot.

Penal Bond

One guaranteeing payment of the stated penalty in the event of non-performance.


The sum of money or bond limit which is available upon default of the principal.

Percentage Of Completion Method

Accounting method used in construction in which profit or loss from work completed is calculated as a percentage of the total contract price.


In a contract, to fulfill it according to its terms.


The fulfilment of the terms of a contract or similar obligation.

Performance Bond

Guarantees that contractor will perform contract in accordance with its specified terms and conditions. Generally contains additional guarantee that faulty work will be corrected and defective materials replaced for a period of one year after completion of performance.


The cause of the loss, e.g., fire, hail, etc.

Perils Of The Sea

In marine insurance, hazards arising on navigable waters through natural forces such as abnormally heavy seas, high winds, etc.

Perimeter Protection

Refers to means used to secure access to the premises when the business is closed.

Period Of Indemnity

Defines the length of time for which indemnity is payable in business interruption and disability policies.


Subject to quick, natural decay, e.g., fruits, dairy products, meat.

Perishable Goods

Goods which prickly decay.


Continuing in the same state, lasting.

Permanent Life Insurance

Insurance which pays the sum insured on the death of the life insured.

Permanent Partial Disability

Condition which continues throughout the life of an injured party and which lessens his earning capacity but which is not so severe as to prevent him from working at a reduced efficiency or in another job function.

Permanent Total Disability

Whereby the injured party is not able to work at any gainful employment for the rest of his life.


Authority to do a thing.

Permission Clause

Clause in certain property insurance policies which gives policyholder permission to use insured premises for normal purpose relating to occupancy.


Document that grants one the right to do something.

Perpetual Insurance

Coverage on real property which is unlimited in respect of time. Payment of a single premium pays for coverage throughout the life of the risk.


A human being, but in law may include a firm, labour organizations, partnerships, associations, corporations, legal representatives, trustees, trustees in bankruptcy, or receivers.

Personal Articles Endorsement

Covers personal property on worldwide basis.

Personal Effects

Moveable property of any kind associated with a person.

Personal Injury

While technically an injury to one’s person, this term is used in policies of liability insurance to mean injury other than bodily injury and arising out of libel or slander, malicious prosecution, false imprisonment, wrongful eviction, etc.

Personal Lines

Insurance for individuals and families, e.g., private passenger automobile, homeowners, etc.

Personal Property

Property belonging to insured, other than real property.

Personal Surety

An individual who acts as a surety or guarantor, as opposed to an insurance company.

Physical Depreciation

Reduction in value due to actual wear and tear or physical deterioration.

Physical Harm

Denotes the physical impairment of the human body, or of land or chattels.

Physical Hazard

Condition relating to the use of tangible property which could cause a peril to occur.

Physical Injury

Bodily harm or hurt, excluding mental distress, fright, or emotional disturbance.

Physical Protection

Locks, bars and screening as a first line of defence against intruders are a basic security requirement that can be used to provide an effective means of perimeter protection.


One or more employees or others who patrol with signs at the employer’s business to publicize a labour dispute in an attempt to influence employees or customers to withhold their work or business.


To steal.


Generally, stealing of small items. In marine insurance, theft of the contents, in whole or in part, of a shipping package.

Pillage And Looting

In marine insurance, robbery of goods usually as part of war or civil uprising.

Pink Card

An Inter-Province Motor Vehicle Liability Insurance Certificate. In provinces where automobile insurance is provided by private insurers, a “pink card” is used to provide proof of financial responsibility.


(a) Robbery on the high seas. (b) Illicit reprinting and reproduction of a copyrighted thing.

Plain Language Policy

Insurance policy written in language that is easily understood. Technical terms are used only when required by law or when substitutions would be misleading.


One who brings a legal action against another.


Bailment of goods to a creditor as security for some debt.

Point Protection

Point or object protection provides direct security for individual items such as safes, vaults, chests, filling cabinets, display cases, and expensive equipment.


Term used to describe all contracts of insurance, including all clauses, riders, endorsements and renewals.

Policy Conditions

Conditions developed by insurer which describe the rights and duties of insurer and insured. See Statutory Conditions.

Policy Fee

Amount added to premium that reflects the various expenses associated with issuing the policy.

Policy Limit

Maximum amount the insurer is obligated to pay in any one occurrence or accident.

Policy Period

Duration of policy.

Policy Reserves

Reserve established by insurer against unearned premium.

Policy Territory

Geographic are in which damage or injury is covered under the policy.

Policy Year

Period which commences with the date of commencement or anniversary of the policy.


One to whom the insurance policy is issued.

Policyholder Surplus

In a mutual insurance company, the amount in excess of assets needed to meet future obligations to its policyholders.


To contaminate the soil, air or water by noxious substances and noises.


Group of insurers or reinsurers who write particular types of risks and share the premiums, losses and expenses.

Port Authority

Agency authorized by government to regulate and plan traffic through a port.


To occupy; to exercise physical control.


Having control or custody of anything which may be the subject of property.


One who has possession.

Post Indicator Value (P.I.V.)

Value used to control water flow to fire protection systems.

Power Of Attorney Written

authorization to act as one’s agent or attorney.


Legal principle established in similar prior cases.


One who has gone before.

Pre-Existing Condition

Physical condition existing prior to effective date of policy.

Preferred Risk

That risk considered to be better than the average risk on which the premium rate was based.


A preconceived opinion.


Estate including land and buildings thereon.


The money or consideration paid by the insured to the insurer for insurance protection.

Earned Premium

The difference between premium paid by insured and the portion the insurance company must return to him if the policy is cancelled during its term; the amount of premium at anytime which pays for the coverage furnished by the insurance company during the expired portion of the policy term.

Unearned Premium

Premium which must be returned to insured upon policy cancellation.

Premium And Dispersion Credit Plan

Plan which gives large commercial fire risks with more than one location premium credits that reflect hazard reduction stemming from the dispersion of risk s and an efficient loss prevention program.

Premium Discount Plan

Discount plan for prepayment of premiums.

Premium Finance Plan

Plan that allows for payment of premium in instalments.

Premium note

A ;promissory note given by the insured for part or all of the amount of the premium. Common to policies of Crop-Hail Insurance.

Premium Rate

Price per unit of insurance.

Premium Reserve

Reserve reflecting the unearned portion of a risk

Premium Tax

Tax paid by insurer on gross insurance premiums sold in province.

Premium Volume Lapse Ratio

This measures the ratio of dollar premium volume of lapsed business during a period compared to a similar prior period.

Prepaid Freight

In marine insurance, freight paid by the shipper to the carrier when merchandise is accepted for shipment. Not refundable even if the merchandise does not arrive a the intended destination.


Period of time in which a claim or action may be brought by the insured.

Pressure Vessel

Vessel designed to hold liquids or gases under pressure, e.g., boiler, hot water heater.


Rule of law under which a fact is presumed true until proven otherwise.

Presumption Of Liability

Assumption of who is liable in a given circumstance until proven otherwise.

Presumptive Disability

Assumption of total disability when there is loss of sight, heating, speech or limb.

Prima Facie

A fact which, at first sight, is presumed to be true unless evidence is provided to contrary.

Primary Policy

In insurance, that policy which pays first before any recovery is made from another.


n. Source of authority.

Law Of Agency

One who has permitted or directed another to act for his benefit and subject to his direction and control.

Law Of Guaranty And Suretyship

The individual or corporation whose performance is being guaranteed.

Principal Sum

Lump sum payable in the event of accidental death or accidental dismemberment.


Fundamental truth or doctrine.

Principle Of Indemnity

Doctrine that an insured is entitled to the actual amount of his loss, no more and no less.

Prior Insurance

Insurance coverage in force prior to current insurance.

Privacy Act

The purpose of this Act is to extend the present laws of Canada that protect the privacy of individuals with respect to personal information about themselves held by a government institution and that provide individuals with a right of access to that information.

Privacy, Right

The right of a person to be let alone.


Affecting private individuals as distinguished from general public.

Private Carrier

See Carrier.

Private Detective Bond

License bond guaranteeing compliance with provincial legislation and generally required of private detectives, locksmiths, security guards, etc.

Private Nuisance

Anything which through its continuous use or existence harms, inconveniences or otherwise deprives another landowners of the enjoyment of his property.

Private Passenger Automobile

Generally, motor vehicles of private passenger, station wagon or van type.

Private Of Contract

Relationship which exists between two or more contracting parties. Generally a rule in law which prevents persons from benefiting from a “private” contract they had no part in effecting. Privacy as a defence in tort action generally no longer viable with the enactment of warranty statutes, acceptance by provinces of strict liability and court decisions which have extended right to sue to others, e.g., third party beneficiaries, innocent bystanders.

Probable Cause

Cause having more evidence for than against.

Probable Maximum Loss (P.M.L.)

Under normal circumstances, the maximum amount of loss that can be expected.


Legal proceeding which proves deceased’s will to be valid or invalid.

Probate Bond

Bond required by the probate court or judge of administrators, executors and guardians guaranteeing the faithful performance of those duties as prescribed by law.


An action at law encompassing the time from the filling of the complaint until the judgement is rendered.


One who sells insurance.

Product Liability

Refers to the legal liability of sellers and manufacturers for injury or damage caused by defective products sold or made by them.

Product Liability Insurance

Insurance coverage designed to insure the legal liability of sellers and manufacturers for injury or damage caused by defective products sold or made by them.

Products Recall Expense Insurance

Covers costs of recalling products known or suspected to be defective.


Occupation requiring special, usually advanced, education and skill, e.g., accounting or legal professions.


Brokers are viewed as professionals who possess special skills or knowledge. The high standards required of other “professionals” are generally also imposed on insurance brokers by the courts.

Professional Liability Insurance

See Errors And Omissions Insurance/Malpractice Insurance.

Profits Insurance

Business interruption form of insurance which covers loss of income as a result of loss of sales due to physical damage to insured’s premises by an insured peril. Indemnity Period commences at time of loss and continues until income is restored to the level that would have resulted had the loss not occurred, subjected to the Indemnity Period selected (usually 12 months)

Progress Payment

Periodic payment made to contractor to cover cost of material and work completed as outlined in contract.


An assurance that something shall or shall not happen in the future.

Promissory Warranty

When contained in insurance policy, an assurance by the insured that certain facts or conditions pertaining to the risk insured against shall continue, or shall be done or omitted.


Act immediately.


Do something without delay and with reasonable speed. Depends on facts in each case, i.e., what is prompt in one situation may not be considered to be prompt in another.


Establishing a fact by evidence.

Proof Of Loss

Formal statement made by insured to insurer regarding a claim, giving details of loss in order that insurer can determine the extent of its liability.

Proper Care

The degree of care which a prudent person should exercise in similar situation.


Everything which goes to make up wealth or an estate, tangible or intangible.

Intangible Property

That which has no physical substance, e.g., claims, interests, and rights.

Mislaid Property

Property which has been left in a certain place by an owner who cannot remember where he has put it.

Movable Property

Property whose location can be changed.

Personal property

Property belonging to insured other than real property.

Real Property

Land and whatever is erected, growing or affixed to it.

Tangible Property

All physical property, both real and personal.

Property Damage

In commercial liability insurance policies generally defined as “physical injury to tangible property, including all resulting loss of use of that property; or loss of use of tangible property that is not physically injured.”

Property Insurance

Covers an insured’s property against loss or damage from insured perils.

Property Of Every Description

Method used to insure commercial building, equipment and stock under a single limit of insurance.

Property Right

A right to specific property, whether personal, real, tangible or intangible.

Property Torts

Those involving injury or damage to real or personal property.

Proportional Reinsurance

Arrangement wherein reinsurer receives a percentage of the risk, the same percentage of the premium, and is responsible to pay the same percentage of all losses.


Offer of insurance risk presented to underwriter for acceptance. Also, formal presentation made by agent or broker to client for purpose of soliciting insurance.

Proprietary Insurers

Private insurers that exist to make a profit. They may be either incorporated or unincorporated.




Business which is owned and controlled exclusively by one person.

Pro Rata


Pro-Rata Distribution Clause

Provides that the amount of insurance shall apply to each parcel of property in the proportion which the value of each bears to the total value of all insured property by the policy.

Pro Rate

To divide, share or distribute proportionately.


See Prescription.


One who is a potential purchaser of insurance.

Prospective Rating Plan

Method of determining premium which is based on the loss experience of the previous period.


A risk geographically located in an area protected by a fire department.


Synonymous with “insurance”. Also used in reference to provide a public protection afforded the risk, e.g., fire and police protection.

Protection & Indemnity Insurance (P.&I.)

A marine insurance policy designed to protect shipowner against liability to third parties for injury or damage caused “whilst at sea and in operations contiguous to the sea” including loss of life, pollution, property damage to cargo, piers, docks, etc.

Provisional Premium

Not the final premium but that which is preliminary or subject to adjustment.


Statements in policy which explain terms of the contract.


Closest in casual connection.

Proximate Cause

The most direct cause of loss, that is the most effective though not necessarily the last, in a series of events.

Proximate Consequence Or Result

Result which happens typically in the ordinary course of things.


Pertains to that which results as a natural sequence with no other thing intervening.


Power to act for an other.


Regarding negligence, almost synonymous with “cautious.”


Common to all; open to common use; belonging to the people at large.

Public Adjuster

Independent adjuster who represents insured on a fee basis in claims settlement.


(a) Printing and distribution of written materials. (b)In law, communication of libelous matter to a third person.

Public Building

A building and its property which are for the use of the public.

Public Contract

A contract in which there are public funds.

Public Nuisance

Behaviour which unreasonably interferes with the health, safety, peace, comfort or convenience of the general public.

Public Policy

Legal principle by which it is unlawful to do anything that may be injurious to the public or be against the public good.


To penalize or punish.

Punitive Damages

See Damages.

Purchase Agreement

An agreement between buyer and seller stating the price and terms of the sale.

Pure Premium

That part of the premium needed to pay losses, excluding the portion required by the company for its expenses.

Pure Risk

That which involves the chance of financial loss but which does not, at the same time, offer a chance of financial gain.


An individual’s qualifies which render him eligible to fill an office or perform a public duty.


Generally, term used to define character, nature and degree of excellence of an item.

Quantum Term

Used in adjustment of claims to mean amount or quantity.

Queen’s Bench

The English court of king’s bench during the reign of a queen.

Quick Asset Ratio

Also called “acid test,” ratio of cash, accounts receivable and marketable securities to current liabilities.

Quick Assets

Liquid assets which can be converted into cash without delay.


adj. Free from disturbance.

Convenant Of Quiet Enjoyment

When inserted in lease, a promise that the tenant shall enjoy the premises in peace and without disturbance.


v. To leave.


n. Giving up one’s claim or title.


The premium required by an insurer to insure a particular risk.



Rain Insurance

Covers financial loss caused by cancellation of an outdoor event due to rain, e.g., fairs, outdoor concerts, etc.


Payment that releases someone or something from captivity.


A charge for insurance based on factors relating to insurance qualities, market conditions, etc.

Rate Waking

The compilation and analyzing of data that will establish rates that accurately reflect the level of risk.

Rate Manual (Rating)

Insurer’s manual which details underwriting rules and rates for use by staff, agents and brokers.

Rating Bureau

A non-profit organization of insurance companies formed to promulgate rates for its members and subscribers.


In the law of principal and agent, the confirmation by one person of an act or contract performed on his behalf by another who at the time assumed without authority to act as his agent.


Generally, the number arrived at when one number is divided by another.

Real Estate

Real property, consisting of land and anything permanently affixed to it, e.g., buildings, fences, and those things attached to the buildings, such as light fixtures, plumbing and heating fixtures.

Real Estate Bond

Guarantees real estate salespersons and brokers will perform their duties in good faith.


Suitable under the circumstances.

Reasonable Act

That which reasonably can be required of a party.

Reasonable Care

That degree of care which a person of ordinary prudence would exercise in similar circumstances. Substantially synonymous with ordinary or due care. See Care.

Reasonable Force

That degree of force which is appropriate to protect oneself or one’s property, without being excessive.

Reasonable Man Doctrine Or Standard

The doctrine states that the standard one must observe to avoid liability for negligence is that of a reasonable man.

Reasonable Time

Such time as may be agreed to after consideration of the nature, purpose and circumstances of each case.


Discount or reduction in stipulated premium of policy, generally by agent or broker and intended as an enticement.


Armed and organized resistance to the laws or operations of the government.


Written acknowledgement that money or goods have been paid or delivered.


A collectible.


A court-appointed person who manages property in litigation or the affairs of a bankrupt.


Condition of a business or individual over whom a receiver has been appointed for protection of its assets and for ultimate sale and distribution to creditors.

Recipient Property

One upon which the insured is dependent to purchase its products or goods sold by it.


Shared mutually as between two persons.

Reciprocal Insurance

Insurance which is administrated by an exchange in which each insured is the insurer of the other members of the plan.


The right to cancel a contract for certain kinds of default by the other contracting party.




n. Documents or data such as accounts, correspondence, memorandums, tapes, discs, papers, books, etc.


The amount of a. loss which an insurance company gets back from reinsurance, salvage or by subrogation.

Red Book

Listing of new, wholesale and average retail price used by automobile dealers, claims adjusters, etc., to establish market value of used automobiles. See Blue Book Value.

Redeemable Bond

A bond which may be called by the insurer for payment according to the terms of the bond.


One selected by appointed arbitrators to participate in the hearing and settling of a dispute.


Retention of clients over the long term through exceptional services and commitment leads to positive word-of-month and referral business.


That portion of insurance premium which is returned to insured, normally as result of termination of policy or reduction in coverages.

Registered Cheque

Cheque purchased from a bank and drawn on bank funds, although not certified by the bank.

Registered Mail

Special type of mailing offered by Canada Post which provides for documentation of all activities related to such mailing.

Regular Course of Business

Normal operations which are a part of a business.


Government agent responsible for control and regulation of an activity or industry.


To indemnify.


To re-establish to its former state, condition, or office.


(a) Restoring all of the insured’s rights under a policy which has lapsed or been cancelled. (b) Restoring the full amount of insurance or reinsurance once a claim has been paid.


Insurance of an insurer; a contract that one insurer makes with another insurer to protect the first insurer against loss or liability arising out of a risk it has already assumed.

Quota Share

reinsurer participates for a fixed percentage of all business covered by the treaty.


Insurer only cedes to reinsurer when the amount of the risk is more than it wishes to retain for its own account.


Reinsurance agreement to cover losses over a specified amount.


Provides for automatic reinsurance without the insurer having to submit each risk to reinsurer.


Reinsurance placed on an individual case basis.


The insurer who is insured against loss under its policies.


An insurance carrier which insures insurers.


One person connected to another by blood or affinity.


n. Abandonment of claim to party against whom it exists.

First Party

Release between the insured and the insurer.

Third Party

Release between the insured and a third party.

Released Bill Of Lading

Type of affreightment where no specific value has been declared for carriage.


For fraud purposes, means a belief which motivates an act.


Abandoning or forsaking a right.


The means by which a right is enforced or the violation of a right is prevented, redressed, or compensated.


At a distance.

Remote Cause

In the law of negligence, one which normally would not lead to the event which happened.


Lacking a close connection between a wrong and the injury, the effect of which is to prevent the injured party from claiming compensation from the one who did the wrong.


Provision in Insurance Act which extends coverage to property which is necessarily and temporarily moved to a location not insured by the policy.


Compensation; salary.


In a contract, to begin again or continue the old contract in force.


Insurance certificate confirming insurance policy has been extended for another term.

Renewal Agreement

Provision in policy that insurer will renew policy for an agreed number of times.

Renewal Certificate

The form used to change the expiry date of the contract.

Renewal Ratio

A key measure for analyzing the brokerage’s effectiveness at creating and maintaining client relationships is the rate at which business is renewed.


Fee paid for use or occupation of property.

Rental Value Insurance

Insurance coverage designed to insure loss of income to owners of tenanted properties made untenable as a result of an insured loss.


The act of restoring a damaged structure or thing to a condition as close as possible to that in which it originally existed.


To substitute a thing with its equivalent.

Replacement Cost

The cost of replacing, repairing, constructing or reconstructing, whichever is the least, the property on the same site with new property of like kind and quality and for like occupancy without deduction for depreciation.

Replacement Value

The cash value or cost to replace a thing.


A court action to recover goods or chattels that have been wrongfully taken or detained by another.

Replevin Bond

A bond executed to indemnify the officer who executed a writ of replevin and to indemnify the defendant or person from whose custody the property was taken for such damages as he may sustain. Such bond guarantees that the replevisor will have the property in the same condition to abide the decision of the court.

Reporting Policy One

Wherein the insured must report existing values to the insurer at certain intervals. Normally used where stock values fluctuate significantly from month to month.


To recover goods sold on credit upon the buyer’s failure to pay for them.


A written or oral statement of fact made by insured in application for insurance to induce insurer to enter into contract.


One who represents others. Interchangeable with “agent”.


To renounce a right or duty.


Esteem in which one is held, i.e., what people think an individual is and what they say about him.


To void a contract as if it were never in place.

Rescission Of Contract

Underdoing a contract from the beginning, either by mutual agreement, or by one party if legal grounds exist.


n. Funds set aside by the insurer to meet future claims and obligations.




A place of abode in which one has an intention to stay for some period of time, but not necessarily permanently.

Residence Employees

The provincial Worker’s Compensation Acts provides coverage for the insured from actions initiated by residence employees, there is no coverage provided when other employees are injured in the course of their employment by the insured. To ensure proper protection is in place, farmers normally will purchase the Employer’s Liability Coverage Rider.


One who resides in a place.

Resident Agent

When Insurance Act requires that policies insuring property in a province be signed by an agent who resides in that province, such agent is deemed a “resident agent.”

Respondeat Superior

Legal maxim meaning that in certain cases the master is liable for the wrongful acts of his servant and a principal is similarly responsible for the wrongful acts of his agent.


Legally accountable. Also, regarding Financial Responsibility Laws, having ability to pay a sum for which he may become liable. In other contracts, one who is able to discharge an obligation.


Act of making good.

Retail Store Policy

Package policy generally combining fire, business interruption, crime and liability coverages for a retail store.

Retained Earnings

Profits which have not been paid out as dividends.


(a) In risk management, includes all means of generating funds from within the business to pay for losses. (b) Amount of liability the primary insurer retains for its own account, or that part not ceded to reinsurer.


To withdraw something.


Basically, reinsurance of a reinsurer.


A look backward.

Retrospective Rating

Method of rating which uses claims experience of insured during the policy period to determine final rate or premium.

Return On Investment

Money earned from invested money.

Return Premium

A refund to the insured, generally as a result of cancellation, or reduction in insurance amount.

Revenue Bonds

Bonds issued for specific public purpose and repayable from income generated by the project, e.g., building a bridge, road, etc.

Revenue Stamps

Stamps affixed to deed representing a tax on sale of real estate.


Susceptible to being withdrawn.

Revocable Credit

A credit which can be cancelled a t any time without the consent of the person in whose favour it was drawn.

Revocable Letter Of Credit

Letter of credit which can be cancelled at any time.


To cancel, rescind or take back.


An attempt to overthrow the government. On a large scale, called a rebellion and, if successful, becomes a revolution.


An overthrow of the government.


Money paid or taken for doing some act.


A document issued by the insurer that modifies the policy by expanding or restricting its benefits. Similar to endorsement.

Right Of Action

The right to bring suit against another for purpose of seeking a legal remedy or relief.

Right Of Way

An easement giving one the right to pass over another’s land. See Easement.


A public disturbance involving a group of three or more persons in which there is actual or threatened violence which results in injury or damage, or which represents a clear and present danger which would result in injury or damage.


The danger or hazard of a loss of the property insured. May also refer to a specific peril or property being insured.

Risk And Insurance Management Society (R.I.M.S.)

Organization dedicated to the advancement of professional standards of risk management.

Risk Classification

Risk classification refers to the grouping or classifying of risks according to established criteria which, in the large part, is based on their probability for loss as a class.

Risk Control

The objective of risk control is to reduce the frequency and severity of losses as much as possible with the resources available.

Risk Financing

Risk financing is concerned with paying the losses that inevitably occur. Risk financing can be divided into two groups, retention & contractual transfer.

Risk Manager

One who works with management to develop the most cost effective means in which to deal with loss exposures that could prevent the organization from achieving its goals.

Risk Management

The process of making and carrying out decisions that will minimize the adverse effects of accidental losses upon an organization.


Felonious taking of property from the possession of another against his will, accomplished by means of force of fear.


A lodger.

Rotten Clause

In marine insurance, refers to the discharge of any obligations upon the insurer when a survey of the vessel shows it to be unseaworthy by reason of being rotten or unsound.

Rule of Precedent

In common law, the basic concept is that current court decisions must follow those made in cases having similar circumstances . This custom of standing by previous decisions is known as the Rule of Precedent.

Running Down Clause

In marine insurance, clause on hull policies which cover third part liability of ships for property damage caused by collision.


Pertaining to the country, as opposed to the city.




In marine insurance, the deliberate casting away or destruction of property to prevent greater loss. General Average sacrifice is for the common good and saved interests make good the sacrifice in proportion to the saving enjoyed-Safe (a) A metal container that protects items of value. (b) Secure from danger.

Safe Burglary Insurance

Generally, insures loss of property from safe or vault, coincidental damage to premises and property and felonious removal of a safe from the premises.

Safe Deposit Box

A metal container in a bank in which a customer keeps valuable items. Generally, two keys are necessary to open the box, one is kept by the bank and he other by the customer.

Safe Driver Rating Plan

Merit rating plan for drivers of private passenger vehicles which assesses points for various traffic violators and accidents, the number of which are then used to assess amount of premium to be paid.

Safety Deposit Box Insurance

Insures against loss of specified property contained within a safety deposit box.


Fit to be sold; of merchantable quality.


A fixed compensation paid regularly, usually on an annual or monthly basis, contrasted with wages that are normally paid on an hourly basis.


A transaction in which one person gives something to another for a price.

Sales Tax Bond

Bond guaranteeing the principal will collect and remit sales tax to government.

Salesmen’s Sample Floater

Insures samples of merchandise in the charge or control of the insured’s travelling representative.


Generally, that property remaining or saved after a loss. Also that portion of property which is taken over by the insurer after payment of a claim for the loss. The insured may retain profession of the salvaged property, at which time the insurance company will deduct the salvage value from the amount of the claim paid.

Salvage Charges

The expenses and costs incurred in preserving the property which was in danger, usually borne by the insurer.

Salvage Value

The value of the asset remaining after its useful life has expired, commonly equivalent to scrap value.

Sample, Sale By

A sale at which the buyer sees only a sample of the merchandise, which creates an express warranty that all the merchandise will confirm to the sample.


In a contract, that which would satisfy a reasonable person.


To comply with a demand, e.g., a judgement is satisfied when it is paid.


In insurance, a comprehensive listing of property, locations and amounts insured, and the applicable conditions. Also, a formula applied to determine an insurance rate.

Schedule Bond

Protects against loss from dishonesty or fraud by named individuals or named positions.

Schedule Rating

Use of fixed standards of construction and protection to develop insurance rates.

Scheduled Coverage

When property is itemized on a policy.

Scheduled Property

Means of insuring property requiring identification of each item and limits applicable to each.


Latin, meaning “knowingly”, or having previous knowledge of the facts. Most commonly used to signify the defendant’s guilty knowledge.

Scope Of Authority

Includes authorization conferred upon agent by his principal as well as that which is apparent or implied.

Scope Of Employment

Refers to all activities committed within the scope, actual or apparent, of one’s employment.


Hold in contempt.


Either a particular sign or the word “seal” to attest the execution of an instrument.

Sealed Bid

A method of bidding on a contract wherein the party submits a bid in a sealed envelope. All bids are opened at the same time, the contract generally being awarded to the party having the most favorable responsible bid.

Seasonal Risk

A risk which is only occupied for part of the year, e.g., summer dwelling, restaurant at summer resort, etc.


In marine insurance, a warranty of seaworthiness means that the vessel is properly constructed, prepared, manned, equipped, and provisioned for the voyage, with a captain of general good character and nautical skill.

Secondary Liability

A liability which does not attach unless certain conditions are fulfilled, e.g., surety responsible to oblige only upon default of the principal.


Something known to only one or a few and which is kept from all others.


To hide away. Action to put property out of the reach of creditors.


Evidences of debts or of property, e.g., stocks, bonds, notes, convertible debentures.

Security Dealer License Bond

Guarantees security dealer will comply with securities law and regulations.


In risk management, the arranging of an organization’s activities and resources so that no single event can cause simultaneous losses to all of them.


Taking of something from another person.


An underwriting term to describe the process of accepting or rejecting risks.


Assuming one’s own risk, usually by setting aside a fund to meet losses instead of purchasing conventional insurance.

Self-Insured Retention

(a) Amount of risk of self-insurer agrees to assume. (b) On Umbrella Liability Insurance Policy, that amount to be assumed by insured before policy will pay.


Self-regulation creates an environment which holds brokers professionalism and consumer protection as primary objectives. The advantages of self-regulation include

setting the educational and ethical standards required of members; establishing of authority for disciplinary action against members who breach the code of ethics.

Selling Price Clause

Clause which changes basis of settlement on insured’s stock from ACV to its selling price.

Semi-variable Expenses

Semi-variable expenses are those which may or may not continue during the period of the interruption. These expenses are difficult to quantify or predict.

Separability Clause

In contracts, clause providing that if one or more contract provisions are declared void, the balance of the contract remains in force.


In risk management, the dividing of an organization’s single asset or operation into two or more separate units.


One employed to perform service and whose conduct in performance of that service is controlled by the master. See Agent; Employee.

Service Contract

An agreement to maintain or repair a consumer product for a specified time period.


In zoning bylaw, provision regulating the distance from the lot line to the point where improvements may be constructed.


The process of adjusting a loss under an insurance contract. Also payment or discharge of an account.

Settlement Options

Alternatives offered to the insured or his beneficiaries when settling a loss.

Settling Agent

In marine insurance, an underwriter’s agent who is authorized to settle claims.


To cut off from something; to divide.


Capable of carrying on an independent existence.


Generally, more than two. Also, independent or severable.

Several Liability

Liability separate and distinct from liability of another.


Apart from others. The term “severally liable” usually implies that each one is liable alone.


A word of command.

Shipping Document

All papers which cover a shipment, e.g., bill of lading, letter of credit, certificate of insurance, etc.

Shipping Order

Shipper’s instructions as to disposition of goods found on copy of bill of lading.


A sudden agitation of the physical or mental sensibilities. See also trauma.

Mental Shock

Sudden agitation of the mind.

Physical Shock

A blow, impact, or collision, or the concussion caused by it.

Shock Loss

Larger than anticipated loss which may impact on an insurer’s underwriting results in a territory.


Illegally taking merchandise from a retail establishment.


A method of temporarily supporting structures of excavations.

Short Rate Cancellation

When the insured terminates the policy prior to its expiry, the insurer is entitled to calculate the refund on a short rate basis, the amount of which is less than the proportionate part that remains unearned.

Shut Down

To stop work, e.g., at a factory.


Illness, affecting general soundness and health.

Sidetrack Agreement

One in which business agrees to assume liability of a railroad company for injury or damage resulting from use of railroad track constructed on the business’s premises.


The part of a public street or highway designed for the exclusive use of pedestrians.

Sight Draft

A draft that is payable when presented.


To authenticate or execute a document by putting one’s name to it and includes impressions made by hand, printed, stamped, typewritten, photographed, etc.


The state of a person who refrains from speaking.

Silence, Estoppel

By arises where one is under duty to another to speak or failure to speak is inconsistent with honest dealings.


Nearly the same; allowing for some degree of difference.


When two or more things happen at the same time.

Single Interest Policy

A policy with only one insured interest, used when goods are sold on credit or deferred payment plan to protect single interest of finance company.


To place in a specific position.


Knowledge of an art, science or trade, including the ability to apply in practice in a proper and approved manner.


Spoken false and defamatory statements concerning another which are harmful to his reputation.

Small Claims Court

A special court which provides for informal and inexpensive adjudication of small claims, e.g., small debts and accounts.


Bringing in of goods which are either prohibited or for which no duty has been paid.

Social Insurance

A compulsory welfare plan which spreads the cost of benefits among the entire population rather than on individual recipients.


In a general sense, the community or public. Also a group of people united together for some common purpose, e.g., Canadian Cancer Society.

Soft Market

A soft market is characterized by intense competition between insurers. As a result, rates tend to be usually low.



Sole Proprietorship

A business which is owned by one person who is responsible for all of its debts.


Try to obtain.


Business’s ability to pay debts when due.


Within a reasonable time.


adj. In good condition.

Specialty Contractor

One engaged in specialized type of construction, e.g., asbestos removal, mining, construction of dams, etc.

Special Damages

See Damages.




A detailed statement of various elements, materials, dimensions, etc. involved.


State in explicit terms.



Speculative Risk

One which involves the possibility of either financial loss or gain.

Spontaneous Combustion

Self-ignition by the internal development of heat, e.g., damp grains, oily rags, etc.


One’s wife or husband.

Sprinklered Risk

Property which is protected from fire by a system of overhead sprinkler pipes.


A model accepted as correct.

Standard (ordinary) Bill to Lading

The bill of lading that reflects the amount for which the common carrier will be held legally liable under the tariff. This amount is arbitrarily established at a certain amount per kilogram/pound or parcel.

Standard Mortgage Clause

Clause designed to protect interest of mortgagee. Contains terms agreed to by mortgagee and insurer respecting the insurance policy, e.g., provides for payment to mortgagee in circumstances where insureds themselves would be denied coverage, outlines requirements where policy changes or termination requested, etc.

Standard Of Care

In law of negligence, that degree of care which a reasonably prudent person should exercise under same or similar circumstances. See Negligence; Reasonable Man Doctrine Or Standard.

Standard Forms

Policy forms adopted for use by the leading insurance companies.

Standing Charges

In business interruption insurance, means those expenses which would not ordinarily reduce during the period of indemnity provided by the policy.


n. In its largest sense, a “state” is a body politic or a society of men.


v. To express in writing or in words.


A declaration of fast.

Statement Of Values

Statement required to be filed by insured indicating value of all property insured. May be required to be verified by appraisal or other means acceptable to insurer.



Statutable, Or Statutory

That which is governed by statutory law, as opposed to the common law or equity.


n. An act of the legislature. Also refers to legislatively created laws as opposed to court decided or unwritten laws. See Common Law.


Created by a statute.

Statutory Bond

One that meets requirements of statute.

Statutory Conditions

Legislated policy conditions outlining duties and responsibilities of insured and insurer under contracts of automobile insurance, accident and sickness insurance and fire insurance. See Policy Conditions.

Statutory Law

Body of law created by acts of the legislature.

Statutory Obligation

An obligation which arises out of a statute.

Statutory Penalty

Penalty imposed against one who commits a statutory violation.


The felonious taking of personal property of another without his consent, and with intent to keep or make use wrongfully.

Step Licensing

Multi-level broker licensing system used in some provinces.


A material requirement in an agreement.


A merchant’s or tradesman’s goods and wares kept for sale and traffic. In commercial property insurance policies may include all merchandise usual to the business of the insured, packing, wrapping and advertising materials and similar property belonging to others which the insured is under an obligation to insure or for which he is legally liable. See Inventory.

Stock Company

Company owned by investors or stockholders who assume the risks of profit or loss.


See Stock.

Stock Reporting Policy

See Reporting Policy.


Property of another taken by a wrongful or dishonest act.


Safekeeping of articles and goods in a warehouse or other depository.


v. To keep merchandise safe, so as to ensure its return in same condition as when received.


I n maritime law, arranging the cargo of a ship so as to protect goods being transported from damage from friction, bruising or leakage.

Straight-Line Depreciation

See Depreciation.


In maritime law, the running aground of a vessel.


Governed by exact rules.

Strict Liability

See Liability.


When workers quit their work for the purpose of compelling their employer to accede to demands which he has already refused.

Strikes Cover

In marine insurance, usually insures damage caused to insured property by strikers, locked-out workers and persons involved in a labour dispute.

Structural Alternation Or Change

A major change, usually involving considerable expense.


A combination of materials to form a construction for occupancy, use or ornamentation whether installed on above, or below the surface of a parcel of land.

Structured Settlement

One especially designed and which payments are made in regular instalments for a fixed period of time or for the life of the claimant, e.g., annuity.


One appointed by an agent of a principal to perform functions undertaken by the agent, and for whose conduct the agent is primarily responsible.


One who undertakes a specific part of the work undertaken by the general contractor, e.g., roofer, electrician.

Subdivision Bond

Provides guarantee to municipality that streets, curbs, sewers, gutters, etc., will be constructed and paid for by the developer.

Subject To

Synonymous with “provided” or “provided that.”


One in which tenant grants interests in leased premises less than this own, or reserves to himself reversionary interest in term.


Leasing of all or a part of his premises by lessee during the balance of his lease term. See also Sublease.

Subordination Agreement

An agreement by which the surety company ensures the bonded party’s financial obligation to it has legal priority over the debt the company owes to its shareholders.


The lawful substitution of a third party in place of a party having a claim against another party. In insurance and surety contracts, company has right to “step into the shoes” of the party whom it has compensated and sue any party whom the compensated party could have sued.

Subscribing Companies

Insurance companies participating in a subscription policy.

Subscription Policy

One in which a group of insurers have agreed to participate.

Subscribing Companies

Insurance companies participating in a subscription policy.

Subscription Policy

One in which a group of insurers have agreed to participate.


Following in time.


Under another’s control.


Damage suffered by property due to movement of land beneath it, excluding earthquake, e.g., landslide.

Substandard Risk

Below average risk which may be rejected by insurer or, if accepted will command a higher rate.


Having considerable value or importance.

Substantial Completion

A contract which is near completion.

Substantial Performance

Exists where a contract has been honestly and faithfully performed in its material and substantial particulars.


Relating to what is essential.


One who subleases from an original lessee.


The passing of property under the law of descent and distribution.


One who follows.


Of like kind.


Unforeseen; occurring unexpectedly.

Sudden Emergency Doctrine

Provides hat when one is placed in position of sudden emergency or peril other than by his own negligence, he shall not be held to same degree of care and prudence as one who has time for thought and reflection.


To begin and carry out a legal action against another. See also Suit.

Sue And Labour Clause

Clause requiring insured to do whatever is reasonably necessary to recover insured property after a loss.


To permit.


A proceeding in a court of law brought by one person against another for redress of an injury or enforcement of a right. See also Action; Proceeding.


A writ delivered to a person advising that an action has been commenced against him in a court of law and requesting his appearance on the date specified to answer to the charge.

Superintendent Of Insurance

One appointed by the government to regulate insurance within that jurisdiction. Also Superintendent of Financial Institutions in some provinces.


n. One authorized to command.



Superseded Suretyship

In policies or bonds insuring employee dishonesty, an agreement by current insurer to cover losses which occurred, under a previous bond or policy but which are not recoverable under such bond or policy because of expiry of the discovery period.


To oversee.




Includes all those who produce and distribute consumer products, including manufacturer, component supplier, wholesaler, distributor, and retailer.

Supply Bond

Guarantees the performance of a contract for the furnishing and delivery of supplies and materials.

Supporting Business

The existence of other insurance policies the applicant has with the same insurer.


Latin. Above.


One who guarantees to pay money or to do any other act in event that his principal fails therein.

Surety Bond

See Bond.

Surety Company

A company which, for a fee, assumes the responsibility of a surety on the bonds of officers, trustees, executors, guardians, contractors, etc.

Suretyship, Contract Of

A contract whereby one person guarantees the performance of another. See Surety.

Surplus Line

A line for which insurance is not readily available in the regular market.

Surplus Reinsurance

A form of reinsurance in which sums over a certain amount are designated to the reinsurer.

Surplus Treaty

A form of proportional reinsurance treaty in which an insurer cedes to the reinsurer only when the amount of the risk is more than it wishes to retain for its own account.


n. In insurance law, refers to application for insurance containing questions asked by insurer and answered insured.


In marine insurance, the adjuster.


Temporarily discontinue with expectation of resuming.


Take an oath.


To cheat and defraud.





T.R.A.C. Report

This report provides an eight point analysis of the financial strengths of private insurance companies and is available on a subscription basis.


Real, having physical form.

Tangible Property

Property which may be felt or touched, either real or personal.

Tangible Ratio

The tangible ratio is a measure of efficiency in the employment of tangible owner’s equity in the operations of a brokerage.


(a) Minimum rate made and published by a recognized rating bureau. (b) Public document outlining services of a common carrier being offered, rates, regulations, etc. relating to those services.


Legally assessable.

Tax Lien

A government lien on real estate which may be foreclosed when taxes are not paid.


The systematic use of terror. A means of coercion.


A violent storm.


Lasting for a short time only.

Temporary Disability

One which lasts a short time as opposed to one that will last for life.

Temporary Location

Equipment and stock other than at a specified location except while in transit, but there shall be no liability under this item at any location owned, rented or controlled in whole or in part by the insured.

Temporary Substitute Automobile

A “temporary substitute vehicle” is one which is temporarily being used as a substitute for the automobile described on the policy. It cannot be an automobile owned by persons living in this same dwelling, nor can it be another owned by the insured. It qualifies as a temporary substitute automobile only if the described automobile cannot be used, because of its breakdown, repair, servicing, loss, destruction or sale.


One who temporarily uses and occupies real property owned by another.

Tenant’s Improvements

See Improvements and Betterments.

Tenant’s Policy

Generally, policy insuring property and liabilities exposures of person who does not own this own home.


Offer to perform combined with demonstrated ability to carry out the offer and production of subject matter of tender.


A period of time for which a policy or bond is issued.


To end.


Legally, expiration of a policy by lapse of the policy. In practice, insurance policies provide own terms for termination.

Term Insurance

Also, temporary life insurance. Coverage is provided for a stipulated period of time. E.g., five years, with the sum insured being paid on the death of the insured should it occur during that term.


One who dies leaving a will.


See Testate.


Oral evidence given under oath by a competent witness.


This taking of property without the owner’s consent.


One who steals.

Third Party

One who is not a party to the insuring agreement but who may have rights therein.


A declared intent to cause injury or damage to another’s person or property.

Three D Policy

See Comprehensive Dishonesty, Disappearance and Destruction Policy.

Through Bill Of Lading

Bill of lading used when more than one carrier is required for shipment of goods.


The sea’s ebb and flow.


“Time” is expressive both of a precise point and of an interval between two points.

Reasonable Time

Not defined in law but left to discretion of judge. Generally, such time as may be fairly and reasonably allowed after consideration of the act or duty, the subject matter, and the attending circumstances.

Time Bill

A bill which contains a date on which payment must be made.

Time Charter

A contact in which the owner leases his vessel or part thereof to another for a specific time or purpose, all the while retaining operation, control, and use of the vessel himself.

Time Draft

See Time Bill.

Time On Risk Change

The premium charged for an incomplete period of insurance, e.g., for a binder that did not result in a policy being issued.


In marine insurance, a policy in which the risk to the insurer is limited to a fixed period of time.


Document evidencing just possession of one’s property.

Title Insurance

Insures loss from a defect or failure of title, or from enforcement of liens existing against property at time of the insurance.


To endure.


n. Money paid for the use of something, e.g., bridge or road toll.


A legal wrong, other than breach of contract, for which the court will provide a remedy in the form of a suit for damages.

Three elements of every tort action are

Existence of legal duty from defendant to plaintiff, breach of duty, and damage as proximate result.

International Tort

The wrong or tort committed by one who knew the act was illegal, as opposed to one who commits a wrong due to negligence.

Personal Tort

A tort which involves injury to a person, as opposed to property.

Strict Tort Liability

See Strict Liability.

Wilful Tort

See Intentional Tort.


One who commits a tort, a wrong-doer.


Used to denote fact that actor is subject to liability under the principles of the law of torts.


The entire amount.

Total Disability

A disability which prevents and employee from doing the acts required of him in his usual job, whether temporary or permanent.

Total Loss

Complete destruction of insured property. Also, a loss is a total loss when there is nothing substantially remaining which could be used as a basis of restoring the whole.

Actual Total Loss

In marine insurance, the total loss of the vessel or insured property.

Constructive Total Loss

In marine insurance, one which occurs when the cost of salvaging the vessel or insured property is too high relative to the value saved.

Partial Loss

In marine insurance, an injury to the vessel or insured property resulting in a loss that is not actually nor constructively total.


Towing ships and vessels, usually by means of a tugboat.




Any word, name, symbol, or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others.


The names or titles lawfully adopted and used by those engaged in trade and who are capable of suing and being sued.

Trade Secret

That which is used in one’s business to give it a competitive advantage over other businesses, e.g., formula, pattern, device, etc.


A vehicle drawn by some independent power.


Usually, a copy of a trial or other proceeding.


When applied to certain instruments, indicates that they may pass to another, carrying all the rights of the original holder.


Transportation of goods or persons from one place to another.


v. To convey from one place to another.

Transportation Insurance

Insurance coverage designed for owners and carriers of goods in transit.


To snare. Denotes an intent to cause injury.


A physical injury or a psychologically damaging emotional experience.


Agreement between and insurer and reinsurer.


An unlawful interference with one’s person, property or rights.

Continuing Trespass

A permanent invasion of the rights of another, e.g., erecting a building which overhangs onto the property of another.

Trespass To Land

One is guilty of trespass when he intentionally intrudes onto the land of anther, or is negligent, or engages in some abnormally dangerous activity. See Nuisance.


One who intentionally enters another’s property without right or permission.

Trip Transit Insurance

Policy designed to provide coverage for a specific trip, as opposed to a length of time.


Of little importance. True Correct.

True Copy

Not necessarily an absolutely exact copy, but one correct enough so that anyone can understand that.


(a) One who holds the legal title to property for the benefit of another. (b) One standing in a fiduciary or confidential relation to another, e.g., agent, attorney, bailee, etc.

Trust Fund

Money or property held by a trustee for the benefit of another.




Underwriters’ Adjustment Bureau Ltd.


Underwriters’ Laboratories of Canada

Uberrima Fides

Denotes the perfect good faith with which an insurance contract must be made, concealing nothing, e.g., the insured must observe the most perfect good faith towards the insurer.

Umbrella Liability Policy

Liability policy which provides excess limits and which also drops down to insure exposures not insured under primary or underlying policies.


A third party appointed to make an independent judgement in a dispute in which two or more arbitrators cannot agree.


Something which is done without authority.



Unavoidable Accident

One resulting without fault and which could not be foreseen and prevented by using ordinary diligence.

Unavoidable Cause

A cause not reasonably anticipated under the circumstances, and whose effects, under similar circumstances, a person does not and would not ordinarily avoid.

Unavoidable Dangers

In marine insurance, unavoidable dangers of the river includes those not preventable by the vessel’s operators.

Uncompleted Work

Work which is a part of the contract and which has not yet been completed.


In contract law, the absence of meaningful choice of the part of one of the parties. Also a contract containing terms which are unreasonably favorable to one party.


Notable to be controlled.

Under Insurance

Insurance coverage which is inadequate for the value of the property or other exposure being insured.

Underinsured Motorist Coverage

Generally, an endorsement to an automobile policy which insures death or bodily injury to an insured when caused by an underinsured or uninsured motorist. The limit of coverage is the difference between the liability insurance limit of the insured’s policy and that carried by the motorist at fault.


Amount of insurance on risk which attaches before the next higher excess layer of insurance of reinsurance attaches.


To know.


To assume an obligation.


A promise.

Under The Influence Of Intoxicating Liquor

Any condition where intoxicating liquor has impaired the ability of the driver to operate his automobile in the manner that an ordinary, prudent and cautious man, in full possession of his faculties, using reasonable care, would operate or drive under like conditions.


To insure. See Underwriter.


(a) The one assuming a risk in return for the payment of a premium. (b) The person within the insurance company authorized to accept or reject applications for insurance.

Underwriters’ Adjustment Brueau Ltd. (U.A.B.)

Develops and maintains professional claims and related services throughout Canada.

Underwriters’ Laboratories Of Canada (U.L.C.)

Not for profit organization founded in 1920. Operates laboratories and a certification service for the examination, testing and certification of devices, construction materials and services to determine their bearing on fire, accident and property hazards.

Underwriting Profit (Or Loss)

The difference between premiums generated and losses and expenses incurred is the company’s underwriting profit or loss.

Undisclosed Agency

When an agent deals with a third party without notifying that person of the agency, a state of “undisclosed agency” exists.

Undisclosed Principal

If an agent is acting for a principal, and the other party is not aware of it, the principal is “undisclosed principal.”

Unearned Premium

See Premium.

Unearned Premium Reserve

See Premium Reserve.

Unemployment Insurance

Insurance plan which collects premiums from employers and employees to fund unemployment payments and benefits.


Plain and clear.


Not according to business or professional standards.


Without warning.

Unexpired Term

In insurance, time remaining in the contract.


Not finished.


Not qualified for a particular use or service.


Not expected. Uniform Unvarying standard.

Unidentified Automobile

Is one with respect to which the identify of either the owner or driver cannot be determined.

Uniform Provision

Wording in certain types of policies which is set out by law and which is standard for all such policies, e.g., certain provisions common to automobile policies.



Unilateral Mistake

In a contract, a mistake or misunderstanding made by one of the parties but not the other.

Uninsured Automobile

Is one in which neither the owner nor driver has applicable liability insurance. This does not include an automobile owned by or registered in the name of the insured or their spouse.

Uninsured Motorist Coverage

Coverage provided on automobile policies and which is intended, within fixed limits, to compensate victims of automobile accidents for bodily injury caused by an uninsured motorist.


Not understandable.


A single thing of any kind.

Unknown Persons

Those whose identities cannot be determined.


That which is prohibited by law.

Unlawful Act

Any violation of a law.

Unlawful Assembly

A meeting of three of more persons with a common plan which, if carried out, will result in a riot.

Unlawful Entry

A peaceable entry upon lands but which is accomplished by means of fraud or some other willful wrong.



Unlicensed Insurance/Reinsurance

Insurance placed with an insurer not licensed to transact business in that jurisdiction.

Unliquidated Claim

A claim which is in dispute or which has not been determined either as to liability or damages.

Unliquidated Damages

Damages which have not yet been determined.


Discharging of cargo.


Property is usually considered to be unoccupied where the premises are complete with its contents, except that such person who normally occupies the premises is temporarily away.


Having no precedent or example.

Unprofessional Conduct

Conduct considered to be immoral, unethical or dishonourable.


Property is “unprotected” when it is located in an area not regularly serviced by a fire department.



Unruly And Dangerous Animals

In law, denotes animals that are likely to injure other domestic animals and persons.




A vessel not able to withstand the perils of an ordinary sea voyage.


Inaccurate, but not necessarily willfully so.



Unwritten Law

That portion of the law which has never actually been enacted in the form of a statute or ordinance, e.g., general customs having the force of law.


Maintenance and repair.


Belonging to a city or town.


Uniform practices followed in certain lines of business or professions.


v. To employ.

Useful Life

For depreciation purposes, an estimate of an object’s useful life.


Capabilities for use, both future and past.



Usual Place Of Abode

With reference to serving a summons, denotes the place where the defendant is actually living at the time of the service. See Domicile, Residence.

Utility Bond

Guarantees utility bills will be paid.

Utmost Care

Synonymous with “highest care.”

Utmost Good Faith

See Uberrima Fides.


To offer a forged instrument as one that is genuine, whether accepted or not.




A place or position which is empty or unoccupied.


Empty of contents. Implies abandonment and nonoccupancy for any purpose. In insurance, when the terms ‘vacant’ and “unoccupied” are used together, “vacant” means empty while “unoccupied” means lack of usual presence of human beings.




To sanction, affirm.


Of considerable worth.

Valuable Consideration

consideration, such as money, upon which a promise may be founded, which entitles the promise to enforce his claim against an unwilling promisor. See Consideration.


Determining the worth of a thing.

Valuation Clause

In marine insurance, a clause wherein the insurer and the insured agree on the value of the insured property in advance of any loss to it.

Valued Bill of Lading

when the Standard bill of Lading does not accurately reflect the value of the property being transported, the owner can negotiate a new bill of lading with the carrier. The owner will pay an additional transportation rate or fee when the carrier’s liability is increased in this way.

Valued Policy

One in which the insured and insurer agree as to the value of property insured in advance of any loss to it, such amount to be paid in the event of a total loss of the covered property.


Willful destruction of property.


Every device which transports people or property upon a highway.

Vehicular Homicide

Illegal operation of a motor vehicle resulting in death of another.


n. (a) A business speculation. (b) In marine insurance, an ocean voyage.


Spoken words.


Answer rendered by jury concerning matters given to them for their deliberation.


Prove to be true.


A craft used for navigation on water.

Vicarious Liability

Indirect legal responsibility, e.g., an employer is liable for the acts of an employee, while in the commission of his duties.



Vicious Propensity

The tendency of an animal to do an act which could endanger the safety of persons and property of others.


One who is the object of a crime or tort.


Extreme, sudden or unjust physical force.

Violently Forcibly

Visible Evident.


Under Occupiers’ Liability Acts, a person who is invited or permitted by the occupier to be there or is permitted by law to be there.


to destroy or annul; to make void or voidable.


The endeavor on which one spends most of his time and out of which he makes his living.


Having no legal force or binding effect.


That which is capable of being declared void.

Voidable Contract

A contract which can be voided because of the wrongdoing of one party, but only if the wronged party agrees that it should be voided, e.g., contract between infant and adult is voidable only at election of the infant.




Worker’s Compensation Board.


Synonymous with betting and gambling.


All types of remuneration one receives for personal services, including salaries, commissions, vacation pay, dismissal wages, bonuses and reasonable value of board, rent, housing, lodging, payments in kind, tips, etc.

Waiting Period

The period of time during which an insurance policy is not in effect or for which no payment will be made on the policy.


v. To voluntarily give up a right.


The unilateral and voluntary relinquishment of a known right.

Express Waiver

The voluntary, intentional relinquishment of a known right.

Implied Waiver

A waiver is implied where one party has acted in such a manner as the other party believes there is an intent to waive his rights or the advantage to which he may be entitled.

Waiver Of Co-Insurance

A clause contained in commercial property insurance policies which provides that the coinsurance penalty will not be applied in situations involving small losses even though insured may not be in compliance with coinsurance requirements, e.g., penalty waived for losses which are less than 2% of amount of insurance and less than $5000.

Waiver Of Subrogation

Provision stating coverage will not be prejudiced if the insured has waived any rights of recovery from a reasonable party in writing prior to a loss.


Reckless disregard of the safety or rights of others.

Wanton Act

An act which evinces a reckless disregard to the life, health, reputation or property rights of another.


Armed conflict carried on between nations, states, or rulers, or between citizens in the same nation or state.

War Exclusion Clause

In marine insurance, exclusion which relieves the insurer of liability for loss caused by war.


A structure used to hold goods, stores or wares.

Warehouse And Customs Bonds

Guarantees payment of customs duties.


One who is in business of receiving and storing goods of others for compensation.

Warehousemen’s Lien

Legal right of warehouseman to retain possession of goods until storage charges have been paid.

Warehouse Receipt

A receipt issued by a warehouseman for goods received for purpose of storage.


A caution, e.g., labels affixed to potentially dangerous products, drugs, tools, etc.


v. In contracts, to promise that certain facts relating to the subject matter are or shall be as represented.


A promise that certain facts are truly as they are represented to be and that they will remain so.

Express Warranties

In sale of goods, promises negotiated and specifically agreed to by parties to contract. In insurance contracts, an agreement stated therein that certain facts relating to the risk are true or shall be true, or certain acts have been or shall be done.

Implied Warranties

In sale of goods, these promises which exist in law and which are understood to apply, e.g., that goods will be merchantable quality.


One who guards, patrols and oversees property.


Bill of lading issued by a carrier showing the merchandise to be transported and shipping instructions. In the event of a claim, it constitutes the written description of the shipment.

Wear And Tear

deterioration caused by ordinary and reasonable use of the subject matter.


Seven consecutive days, sometimes stipulating beginning with Sunday and ending with Saturday.

White-Collar Crimes

Non-violent crimes committed by corporations or individuals including theft or fraud and other violations of trust committed in the course of the offender’s duties.

Whole Life

See Ordinary Life.


One who sells to a retailer or jobber as opposed to consumers.




A woman married to a man.

Wild Animals

Animals which cannot be tamed.



Wilful And Malicious Injury

Injury resulting from an intentional act without just cause of excuse.

Wilful And Wanton Act

Act which is negligent and exhibits conscious disregard for the safety of others.

Wilful And Wanton Injury

Injury resulting from act knowingly and intentionally committed or committed under circumstances characterized by reckless disregard of safety of the victim.

Wilfully And Knowingly

An act is done “willfully and knowingly” when the person deliberately intends, to do it and knows the nature of the act.

Wilful Neglect

Suggests an intentional negligence.

Wilful Or Wanton Negligence

Failure to exercise ordinary care to prevent injury to a person who is in danger.

Wilful Tort

Intent to injure.



Wind Up

The action of settling accounts and liquidating the assets of a business in order to dissolve it.


To take away something one has previously enjoyed.


To keep in one’s possession that which belongs to another.

Without Delay

At once. Also within the time allowed by law.

Without Prejudice

when an offer or admission is made “without prejudice.” It signifies that no rights or privileges of the party concerned are to be considered as thereby waived or lost, except in so far as may be expressly conceded or decided.


All forms of physical or mental efforts required to obtain some object other than recreation or amusement.

Workers’ Compensation

Acts provincial statutes which provide employees or their dependents with no fault insurance benefits in event of employment related accidents and diseases.

Workers’ Compensation Plan

Plan funded by employer contributions to cover compensation to employees injured in accidents while on the job.

Working Capital

The difference between current assets and current liabilities.


Mill, factory or establishment that performs industrial labour.


The value of a thing.


Having no value.


To destroy.


A court order requiring a specified act be done.


To underwrite or accept an application for insurance.


To remove bad debts from books of account.


Denotes a document as opposed to spoken words.


Law Statutory law.

Written Premium

Total of all premiums for policies issued and renewed in a given period of time.


A violation of the legal rights of another.

Private Wrong

The violation of a private or public right which results in an injury to an individual.

Public Wrong

The violation of public right or duty which affects the whole community.


One who commits an injury; a tort-feasor.


Injurious; infringement of a right.

Wrongful Act

An act which will infringe upon the rights of another to his damage.






Twelve calendar months.


To relinquish.




Dividing of a city into districts by legislative regulation and making of regulations relating to structural and architectural design, use of buildings within designated areas, etc.

Zoning Permit

Document issued by government authorizing a parcel of land to be used for a purpose which is consistent with zoning regulations.