Accidental means is a condition for losses covered under an insurance policy that requires the loss to have been the result of an accident. 

Accidental means is a condition for losses covered under an insurance policy that requires the loss to have been the result of an accident, rather than the result of a non-accident. Court cases may hinge on whether the wording of the policy implies that the insurer has liability for the cause of the accident (death or injury from accidental means), or if the liability is dependent on the effect (injury or death). Insurance policies for bodily harm or death often include a provision that requires the death or injury to be caused by external, violent, and accidental means. Insurance policies for bodily harm or death often include a provision that requires the death or injury to be caused by external, violent, and accidental means. Accidental means is a condition for losses covered under an insurance policy that requires the loss to have been the result of an accident, rather than the result of a non-accident.

Accidental Means

An account current summarizes the performance of an agent's insurance policies and helps to reconcile payments between the agent and the insurer.

The account current is a summary statement detailing the financial performance of an individual insurance agent’s business over a specified period. Individual line item columns per policy may include the name of the agent underwriting the policy, the policy number, the name of the insured party, the date of policy underwriting, and the premium amount for the insurance policy. The paper trail provided by the account current guarantees the timely payment of premiums to general agents or insurance companies as required by the agent’s fiduciary duty. The account current guarantees timely payment of premiums to general agents or insurance companies as required by the agent’s fiduciary duty. The account current documents the money that needs to be transferred between insurance companies and agents to cover premiums and claims on the policies overseen by the agent.

Account Current

Accounts receivable insurance provides coverage against financial losses due to nonpayment of customers.

Accounts receivable insurance protects a company against financial losses caused by damage to its accounts receivable (AR) records. Accounts receivable insurance will also cover the costs of reestablishing your accounts receivable records, such as the costs of hiring an information technology (IT) consultant that specializes in data loss recovery. Accounts receivable insurance protects a company against financial losses caused by damage to its accounts receivable (AR) records. Accounts receivable insurance protects a variety of situations involving a company's accounts receivable records. Accounts receivable insurance provides coverage against losses incurred by a company when they are unable to collect from customers that owe the business money.

Accounts Receivable Insurance

An act of God bond is an insurance-linked bond that establishes a reserve to pay claims for unforeseen catastrophes.

An act of God bond is an insurance-linked security issued by an insurance company to establish a reserve against unforeseen catastrophic events. When insurance companies issue act of God bonds, they make their repayment terms contingent on whether or not an unforeseen catastrophic event occurs over the life of the bond. An act of God bond is an insurance-linked security issued by an insurance company to establish a reserve against unforeseen catastrophic events. An act of God bond provides insurance companies with a mechanism to exchange a portion of earned premiums for debt funding contingent upon an unexpected disaster. An act of God bond is a debt instrument that insurers issue to establish a financial reserve to fund claims from catastrophic events.

Act of God Bond

Actual total loss is a loss that occurs when an insured property is totally destroyed, lost or damaged to such an extent that it cannot be recovered.

Table of Contents
What Is Actual Total Loss?
Understanding Actual Total Loss
Example of Actual Total Loss
Limitations of Actual Total Loss
Actual Total Loss Methods
 There are several steps you must take to get a new car after a total loss:
1.  File a claim with your insurance company.
2.  An insurance adjuster will come from your insurance company to look at the damaged vehicle.
3.  If the adjuster determines that your car is totaled, the insurance company will calculate the actual cash value of your car—the amount it would have been worth had it not been damaged. Total loss car insurance is a type of car insurance that gives you the right to coverage to help pay for a new vehicle if the cost to repair your vehicle is more than its actual cash value (ACV). Your car insurance company will consider the incident a total loss if the cost to repair your vehicle is more than its actual cash value (ACV). If your car becomes totaled, your car insurance company will give you a settlement, which you can use to purchase a new car.

Actual Total Loss

An actuarial assumption is an estimate of an uncertain variable input into a financial model for the purposes of calculating premiums or benefits.

MDL-205, Annual Financial Reporting Model Regulation

An actuarial assumption is an estimate of an uncertain variable input into a financial model, normally for the purposes of calculating premiums or benefits. An actuarial assumption can include analysis of the following:
Mortality rates
Retirement contribution rates
Survivorship
Disability rates
Morbidity rates, which is the likelihood that a disease would occur in a population
Likelihood of a weather catastrophe or event
Actuarial assumptions are important because they help companies develop contingency plans for the future based on possible outcomes. Although actuarial assumptions are typically used for mortality analysis with life insurance, the same methodologies are also applied to other types of insurance, including liability and property insurance. One of the most common actuarial assumptions made by insurance companies is the life expectancy projection of a person seeking life insurance. Insurance companies use actuarial assumptions when calculating the life expectancy projection of a person seeking life insurance.

Actuarial Assumption

Actuarial science is a discipline that assesses financial risks in the insurance and finance fields, using mathematical and statistical methods.

Actuarial science is a discipline that assesses financial risks in the insurance and finance fields, using mathematical and statistical methods. In health insurance, including employer-provided plans and social insurance, actuarial science includes analyzing rates of
Disability in the population or the risk of a certain group of people becoming disabled
Morbidity or the frequency and the extent to which a disease occurs in a population
Mortality or mortality rate, which measures the number of deaths in a population that result from a specific disease or event
Fertility or fertility rate, which measures the number of children born
For example, disability rates are determined for veterans that may have been wounded in the line of duty. In traditional life insurance, actuarial science focuses on the analysis of mortality, the production of life tables, and the application of compound interest, which is the accumulated interest from previous periods plus the interest on the principal investment. Actuarial science spans several interrelated subjects, including mathematics, probability theory, statistics, finance, economics, and computer science. Actuarial science applies probability analysis and statistics to define, analyze, and solve the financial impact of uncertain future events.

Actuarial Science

Actuarial service is one way corporations determine, assess, and plan for the financial impact of risk. Actuarial science is used to evaluate and predict future payouts for insurance and other financial industries.

Actuarial service is one way that corporations determine, assess, and plan for the financial impact of risk. With motivations to take on insurance policies that offer little risk, actuarial service practices focus on analyzing factors related to life expectancy, constructing mortality tables that provide a measure of predictability and making recommendations to brokers in individual cases. By using mathematical and statistical modeling, actuaries are able to provide estimates regarding particular events, such as the lifespan of a life insurance applicant, or the likelihood of a catastrophic, weather-related event for a property and casualty insurance firm. While actuarial science is most commonly applied to mortality analysis for life insurance, many of the same procedures are also used for property, liability, and other kinds of insurance. This advancement made it easier for insurance brokers to quantify the risk of taking on a new insurance policy.

Actuarial Service

Actuarial analysis is a type of asset to liability analysis used by financial companies to ensure they have the funds to pay required liabilities. 

Actuarial analysis is a type of asset to liability analysis used by financial companies to ensure they have the funds to pay the required liabilities. Actuarial analysis is a type of asset to liability analysis used by financial companies to ensure they have the funds to pay the required liabilities. Insurance companies, banks, government agencies, and corporations use actuarial analysis to design optimal insurance policies, retirement plans, and pension plans. In insurance products, a financial company must manage an asset portfolio that has appropriate liquidity for generating immediate payout needs and longer-term payout needs. Insurance and retirement investment products are two common financial products in which actuarial analysis is needed.

Actuarial Analysis

Actuarial risks are the risks that assumptions actuaries implement into pricing models may turn out to be wrong or somewhat inaccurate.

Actuarial risk refers to the risk that the assumptions actuaries implement into models used to price specific insurance policies may prove to be inaccurate or wrong. The following two types of life tables dominate actuarial sciences:
**Period life table**: This table demonstrates the mortality rates of a given population of individuals during a specific and narrow time period.
**Cohort life table**: This table displays the overall mortality rates for a specific population’s total lifetime. Actuaries use period life tables, which show the mortality rates of a specific population of individuals, during a given period of time, and they use cohort life tables, which show the overall rates of mortality for a specific population’s total lifetime. Actuarial risk refers to the risk that the assumptions actuaries implement into models used to price specific insurance policies may prove to be inaccurate or wrong. Actuarial risk examines the possibility that assumptions actuaries embed into models used to price specific insurance policies fail to pan out.

Actuarial Risk

An actuarial rate is an estimate of the expected value of future losses.

An actuarial rate is an estimate of the expected value of the future losses of an insurance company. By offering lower premiums to low-risk groups, an insurance company can attract those individuals to buy its insurance policies, lowering its own losses and expenses, while increasing the losses and expenses for competing insurance companies (who must then vie for business from higher-risk pools of individuals). A major component of the ratemaking process is to consider every factor that might impact future losses and set a premium pricing structure that offers lower premiums to low-risk groups and higher premiums to high-risk groups. Actuarial rates are expressed as a price per unit of insurance for each exposure unit, which is a unit of liability or property with similar characteristics. Accurate actuarial rates help protect insurance companies against the risk of severe underwriting losses that could lead to insolvency.

Actuarial Rate

Additional insured is a type of status associated with general liability insurance that provides coverage to other individuals/groups not initially named.

Additional insured is a type of status associated with general liability insurance policies that provides coverage to other individuals or groups that were not initially named in the policy. Additional insured typically applies where the primary insured must provide coverage to additional parties for new risks that arise out of their connection to the named insured's conduct or operations.
These new individuals or groups are added to the policy through an amendment called an endorsement. An additional insured status in a liability policy extends the coverage beyond the named insured to include other individuals or groups that were not named in the original policy. An additional insured endorsement protects the additional insured under the named insurer's policy allowing them to file a claim if sued. With an additional insured endorsement, the additional insured will then be protected under the named insurer's policy and can file a claim in the event that they are sued.

Additional Insured

Adjusted earnings provide a measurement of how current performance compares with performance in previous years.

Adjusted earnings is a metric used in the insurance industry to evaluate financial performance. The Securities and Exchange Commission (SEC), which regulates financial reporting for companies, requires public companies to use GAAP accounting for their reported financial statements.
However, adjusted earnings metrics are not GAAP-compliant and will show different earnings numbers than unadjusted earnings. As a result, adjusted earnings can be used in tandem with GAAP-compliant earnings, such as net income, to arrive at a more comprehensive understanding of an insurance company's financial performance. A property and casualty insurance company, for example, will calculate adjusted earnings by taking the sum of its net income (or profit), catastrophe reserves, and reserves for price changes, then subtracting gains or losses from investment activities. On the other hand, calculating adjusted earnings would involve adding or subtracting financial items to or from net income to arrive at the earnings from running the core business.

Adjusted Earnings

Adjusted net worth is the value of an insurance company based on capital values, surplus values, and an estimated value of a business on the books.

Adjusted net worth calculates the value of an insurance company, using capital values, surplus values, and an estimated value for business on the company's books. Adjusted net worth calculates the value of an insurance company, using capital values, surplus values, and an estimated value for business on the company's books. The adjusted net worth represents a measure of the value of an insurance company, making it a useful way to compare the company's relative value to other insurance companies. Adjusted net worth is calculated by estimating the value of the business on the company's books and adding unrealized capital gains, capital surplus, and voluntary reserves. There are other forms of adjusted net worth, including providing a snapshot of a business' finances from a particular perspective—which includes subtracting assets from liabilities.

Adjusted Net Worth

An adjusted premium is the premium of a life insurance policy that is adjusted by amortizing the costs associated with acquiring the insurance policy.

An adjusted premium is a premium on an insurance policy that does not remain at a fixed price indefinitely. The adjusted premium is vital for life insurance companies to calculate, as it is the premium used to figure the minimum cash surrender value (CSV) of the policy, a process known as the adjusted premium method. All life insurance policies are required to calculate a CSV due to the Nonforfeiture Provision, which means that the life insurance policy always has a value, even when the policyholder chooses not to use it for its original purpose, namely, payout upon death. An adjusted premium is a premium on an insurance policy that does not remain at a fixed price indefinitely. The adjustment comes from assessing the net-level premium, or total cost of the policy from inception to payout, divided by the number of years the policy is expected to be in use.

Adjusted Premium

An administrative charge is charged by an insurer to cover expenses related to record keeping and/or other administrative costs.

An administrative charge is a fee charged by an insurer or other agency responsible for administering an insurance policy to cover expenses related to record-keeping and/or additional administrative costs. Additional charges may arise if a policy-holder has a life-changing (marriage, changing jobs, buying a home) event mid-policy and want their coverage updated.
Altering an insurance policy mid-term can result in costly administrative charges. Consider a scenario in which you’ve compared prices and found a great insurance deal. An administrative charge is a fee charged by an insurer or other agency responsible for administering an insurance policy to cover expenses related to record-keeping and/or additional administrative costs. However, while most policies can be purchased online, only some allow a customer to make changes for themselves online. And even if you can make the changes yourself online, it might still cost you—many policies that allow you to make changes online still charge fees for doing it yourself. An administrative charge or fee is an expense charged to cover costs associated with opening, maintaining, changing, or closing an insurance policy.

Administrative Charge

Administrative services only (ASO) is an agreement that companies use when they fund their employee benefit plan but hire a vendor to administer it.

Table of Contents
Expand For this reason, many employers using ASO plans also establish aggregate stop-loss policies in which the insurance company takes responsibility for paying claims that exceed a certain level—for example, $10,000 per insured person in exchange for a premium. In ASO arrangements, the insurance company provides little to no insurance protection, which is in contrast to a fully insured plan sold to the employer. Pros and Cons of ASO
Administrative Services Only FAQs
Administrative services only (ASO) refers to an agreement that companies use when they fund their employee benefit plan but hire an outside vendor to administer it. For example, an organization may hire an insurance company to evaluate and process claims under its employee health plan while maintaining the responsibility of paying the claims itself.

Administrative Services Only (ASO)

Admitted insurance is purchased from an insurance company that has been formally admitted or licensed to operate by the state insurance agency.

Admitted insurance refers to coverage offered by insurance providers who are licensed to operate by the state insurance agency in which they're based. Furthermore, insurance brokers must provide statements confirming that they made good faith efforts to obtain insurance from admitted carriers before choosing a non-admitted carrier. Admitted insurance refers to coverage offered by insurance providers who are licensed to operate by the state insurance agency in which they're based. Admitted insurance refers to coverage offered by insurance providers who are licensed to operate by state insurance agencies. “Non-admitted” status means an insurance carrier has not been approved by the state’s insurance department, resulting in the following consequences:

Admitted Insurance Defined

Advance loss of profit (ALOP) insurance provides coverage for financial losses due to delays in construction and infrastructure projects. 

Advance loss of profit (ALOP) insurance provides coverage for financial losses due to delays in construction and infrastructure projects. Advance loss of profit insurance provides a hedge against losses associated with these kinds of risks, and the companies that purchase ALOP coverage can play a variety of roles on a construction project. Advance loss of profit insurance only covers the actual loss of gross profit stemming from a delayed project. Advance loss of profit insurance only covers the actual loss of gross profit stemming from a delayed project. Advance loss of profit (ALOP) insurance provides coverage for financial losses due to delays in construction and infrastructure projects.

What Is Advance Loss of Profit (ALOP) Insurance?

An advance premium is an initial premium paid to bind an insurance policy for a given period of time. 

An advance premium is an initial premium paid to bind an insurance policy for a given period of time. Because the advance premiums paid to an insurer are not yet earned (that is, insurance coverage has not yet been written yet to correspond with those premiums), those funds must be kept in a separate account from the company's operating funds, and cannot be counted as earned income until the insurance coverage has been written. An advance premium is an initial premium paid to bind an insurance policy for a given period of time. An advance premium is an initial premium paid to bind an insurance policy for a given period of time. If you were to pay insurance in arrears, such as you do with your home mortgage payments, the insurance company would have extended coverage and potentially suffered a loss without you paying any premium.

Advance Premium

Advertising injury coverage protects policyholders from many, but not all, offenses related to advertising, such as libel and slander, among others.

Advertising injury coverage is a component of commercial general liability insurance that protects the policyholder against claims of stolen ideas, invasion of privacy, libel, slander and copyright infringement related to advertising. If their new customers sued them because the lawyers’ billboard led customers to believe the new firm was somehow related to the old firm, the lawyers’ advertising injury coverage would not protect them, because it does not cover false advertising claims. Advertising injury coverage is a type of personal injury insurance, as opposed to physical injury insurance, and may also be called personal and advertising injury coverage. The car manufacturer could rely on its advertising injury coverage to defend itself in court, assuming its claims were based on accurate information and were not excluded from the policy’s coverage in any way. Another scenario where advertising injury coverage would come into play is if a major car manufacturer, through its television ads, claimed that its competitors’ vehicles used faulty brake systems and the competitor sued for slander, saying that the claims about faulty brakes were false.

Advertising Injury Coverage

Aggregate excess insurance is an insurance policy that limits the amount that a policyholder has to pay out over a specific time period.

Aggregate excess insurance limits the amount that a policyholder has to pay out over a specific time period. Aggregate excess insurance provides payment for total losses that occur over a period of time and is not limited to a per-occurrence basis.
Aggregate excess insurance policies limit the amount a policyholder has to pay out over a specific period. To protect itself from this portion of loss, the self-insuring company could purchase aggregate excess loss insurance. The contract indicates that the insurance company is responsible for losses up to $500,000, but that the reinsurance company is responsible for anything above a stated limit, say $1 million and above. The excess loss limit, called the loss fund, is set by the insurance company.

Aggregate Excess Insurance

The aggregate limit of liability refers to the most money an insurer can be obligated to pay to a policyholder during a specified period.

The general aggregate limit liability refers to the most money that an insurer can be obligated to pay to an insured party during a specified period. Insurance policies limit not only how much they will pay for a single incident; but the aggregate limit of liability is the limit for the entire policy term, which is typically one year. The contracts of commercial general liability (CGL) and professional general liability insurers cite these general aggregate limits in detail. The aggregate limits are part of commercial general liability (CGL) and professional general liability insurance policies. A general aggregate limit of liability applies to _all_ types of liability claims that the policy covers, such as property damage, bodily injury, personal, and advertising injury.

Aggregate Limit Of Liability

Aggregate stop-loss insurance is an insurance policy that limits claim coverage (losses) to a specific amount.

Employer Health Benefits Survey: 2018 Annual Survey

Aggregate stop-loss insurance is a policy designed to limit claim coverage (losses) to a specific amount. The deductible or attachment for aggregate stop-loss insurance is calculated based on several factors including an estimated value of claims per month, the number of enrolled employees, and a stop-loss attachment multiplier which is usually around 125% of anticipated claims.
Aggregate stop-loss insurance is held for self-funded insurance plans for which an employer assumes the financial risk of providing healthcare benefits to its employees. The aggregate attachment associated with a stop-loss plan is calculated as follows:
The employer and stop-loss insurance provider estimate the average dollar value of claims expected by employee per month. This coverage ensures that a catastrophic claim (specific stop-loss) or numerous claims (aggregate stop-loss) do not drain the financial reserves of a self-funded plan. Aggregate stop-loss insurance is designed to protect an employer who self-funds their employee health plan from higher-than-anticipated payouts for claims.

Aggregate Stop-Loss Insurance

In aggregate stop-loss reinsurance, losses over a specified amount during the contract period are covered by the reinsurer and not by the insurer.

In aggregate stop-loss reinsurance, losses over a specified amount during the contract period are covered by the reinsurer and not by the original insurer or ceding company. Because of this risk, reinsurers typically charge a high fee for this type of coverage and are likely to set the attachment point at a multiple over an insurance company's typical loss experience. Sometimes, reinsurers will require some form of co-participation by the reinsured to be applied to the reinsurer's limit. Consider the example of an insurance company entering into an aggregate stop-loss reinsurance contract with a reinsurance company. Aggregate stop-loss reinsurance caps the aggregate amount of losses for which a ceding company is responsible for at the attachment point. Like most models run in the insurance company, ones used for calculating the attachment point for aggregate stop-loss reinsurance contracts will use historical data and predictive analysis.

Aggregate Stop-Loss Reinsurance

An aggregate limit is a cap on the maximum amount an insurer will pay in claims to a policyholder over a set period, usually one year.

An aggregate limit is a maximum amount an insurer will reimburse a policyholder for all covered losses during a set time period, usually one year. For example, if a company's annual aggregate coverage limit is $20 million, and claims totaling $25 million are filed in a policy period, the insurance company will pay only $20 million. If the insured makes a single claim for $50,000, the insurance company pays only $25,000, the per claim limit, even though it is under the aggregate limit. For example, a liability policy may have a $25,000 per claim limit and an aggregate limit of $100,000. After reaching the aggregate limit, the insurer pays no additional claims during the policy period.

Aggregate Limit

Air cargo insurance protects a buyer or seller of goods being transported through the air from damage, loss, and, in some cases, even shipment delays.

Air cargo insurance is a type of policy that protects a buyer or seller of goods that are being transported through the air. Air cargo insurance premiums vary based on the level of coverage, value, and nature of the insured items; where they are being transported; and the route they take.
Most air cargo insurance policies offer partial coverage, which may only reimburse 60% of the inventory value, but there are more comprehensive packages available. A close cousin of air cargo insurance is marine cargo insurance, which protects goods that are transported over water. The amount of coverage and the deductible—the money a policyholder pays for expenses before the insurance plan starts to pay out—required for air cargo insurance varies based on the goods, as well as the individual provider. Some insurance companies offer air cargo insurance directly, as do several freight forwarders and trade-service intermediaries.

Air Cargo Insurance

Aircraft insurance provides liability and property coverage of aircraft.

Aircraft insurance that provides liability and property coverage for aircraft. Some insurers offer policies that combine aircraft liability and hull with other aviation coverages, such as aircraft products liability, airport liability, land-based general liability, and hangar keepers liability coverage. This can be aircraft liability coverage or stand-alone non-owned aircraft liability and perhaps excess aircraft liability coverage as well. Businesses that elect to use private aircraft in their operations must purchase aircraft insurance to cover their aircraft liability loss exposure. While aircraft insurance typically covers repair or replacement of damaged aircraft and parts, aviation accident insurance will cover liability claims from injury or loss of life.

Aircraft Insurance

In an aleatory contract, the parties do not have to perform a particular action until a specific event occurs, such as natural disasters and death.

Retirement Topics—Required Minimum Distributions (RMDs)

What Do Investors Need to Know About the SECURE Act?

An aleatory contract is an agreement whereby the parties involved do not have to perform a particular action until a specific, triggering event occurs. In certain cases, if the insured has not paid the regular premiums to keep the policy in force, the insurer is not obliged to pay the policy benefit, even though an insured has made some premium payments for the policy. An annuity contract is an agreement between an individual investor and an insurance company whereby the investor pays a lump sum or a series of premiums to the annuity provider. Only then will the policy allow the agreed amount of money or services stipulated in the aleatory contract. The death of someone is an uncertain event as no one can predict in advance with certainty that when the insured will die. In return, the contract legally binds the insurance company to pay periodic payments to the annuity holder—called the annuitant—once the annuitant reaches a certain milestone, such as retirement.

What Is an Aleatory Contract?

An alien insurer is one offering coverage in a country other than its home country.

Going Out on a Limb--Body Parts and Others

An alien insurer is an insurance provider offering coverage in a country other than the company's home country. A foreign insurer is different from an alien insurer, as it's an insurer that's based in the U.S. but sells policies in states other than where it's domiciled. In the U.S., an insurance company represented by an agent in a state other than the company's incorporated state is considered a foreign insurer. The relationship between the country where the insurer is incorporated and the location where it sells a given policy defines whether it's considered an alien insurer. If a person in New York bought coverage from the same company, however, the insurance company would be considered an alien insurer.

Alien Insurer

An alternate employer endorsement extends workers' compensation coverage to other companies with whom the primary insured may do business.

An alternate employer endorsement extends existing workers' compensation coverage to other companies with whom the primary insured may do business. The alternate employer endorsement covers injury sustained by employees during their temporary or special employment by the alternate employer listed in the endorsement schedule. The temp agency or subcontractor agency remains the worker's primary employer, with coverage that applies only to work performed by the temporary workers under that contract or for the duration of that project. To protect itself from lawsuits, the delivery company asks the agency to insure it as an alternate employer under the agency's workers' compensation policy. An alternate employer endorsement extends workers' compensation coverage by including additional companies to the policy's endorsement schedule.

Alternate Employer Endorsement

Alternative dispute resolution (ADR) is, in an insurance sense, a number of disparate processes used by insurers to resolve claims and contractual disputes.

Alternative dispute resolution (ADR) is, in an insurance sense, a number of disparate processes used by companies to resolve claims and contractual disputes. Because alternative dispute resolution (ADR) is not always straightforward, aggrieved parties are advised to first exhaust all appeals within the insurance company and/or hire a public adjuster to represent them before considering dispute resolution. Alternative dispute resolution (ADR) is, in an insurance sense, a number of disparate processes used by companies to resolve claims and contractual disputes. Alternative dispute resolution (ADR) is, in an insurance sense, a number of disparate processes used to resolve disputes. The two most common forms of alternative dispute resolution (ADR) are:
**Mediation:** An independent third party steps in to try and find a way for the insured and the insurer to agree on a mutually acceptable outcome.

Alternative Dispute Resolution (ADR)

The alternative risk transfer (ART) market allows companies to purchase coverage and transfer risk without having to use traditional commercial insurance.

The alternative risk transfer (ART) market is a portion of the insurance market that allows companies to purchase coverage and transfer risk without having to use traditional commercial insurance. The alternative risk transfer (ART) market is a portion of the insurance market that allows companies to purchase coverage and transfer risk without having to use traditional commercial insurance. The alternative risk transfer market has two primary segments: risk transfer through alternative products and risk transfer through alternative carriers. The alternative risk transfer (ART) market allows companies to purchase coverage and transfer risk without having to use traditional commercial insurance. The ART market includes risk retention groups (RRGs), insurance pools, and captive insurers, wholly-owned subsidiary companies that provide risk mitigation to its parent company or a group of related companies.

Alternative Risk Transfer (ART) Market

The American Academy of Actuaries is a group that provides analysis to aid in aspects that require actuarial expertise.

The American Academy of Actuaries (AAA) is a group that provides analysis to aid in public policy creation, advances the status of the actuarial profession, and sets standards of integrity and competence for actuaries. The American Academy of Actuaries (AAA) is a group that provides analysis to aid in public policy creation, advances the status of the actuarial profession, and sets standards of integrity and competence for actuaries. Academy counsels discuss issues relating to public policy works; property/casualty; life insurance; pensions and other retirement accounts; health care and Medicare; domestic and international financial reporting; and risk management. The AAA also publishes a monthly newsletter called Actuarial Update to inform members of public policy updates and issues. A quarterly newsletter called Enrolled Actuaries Report updates AAA members of public and private pension plans.

American Academy Of Actuaries (AAA)

The American Insurance Association (AIA) was a property-casualty association that merged with the Property Casualty Insurers Association of America (PCI) in 2019.

NEW Market Analysis Validates Strength of Mutual Insurance Companies

The American Insurance Association (AIA), incorporated in 1866, was a leading property and casualty insurance (P&C) trade organization. Together, the newly formed American Property Casualty Insurance Association (APCIA) represents nearly 60% of the US property and casualty (P&C) insurance market.﻿﻿ Before the merger, Property Casualty Insurers Association of America (PCI) had 1,000 member companies while the American Insurance Association (AIA) had 350 companies. The American Insurance Association (AIA) merged with the Property Casualty Insurers Association of America (PCI) in 2019 to form the American Property Casualty Insurance Association (APCIA).
The APCIA represents companies on the state and federal level by monitoring legislation. In early 2019, the AIA merged with the Property Casualty Insurers Association of America (PCI) to form the American Property Casualty Insurance Association (APCIA). The American Insurance Association (AIA) represented companies on the state, federal, and international scope by monitoring legislation on each level.

American Insurance Association (AIA)

The American Land Title Association is a trade association representing the title insurance industry, seeking to improve industry oversight.

The American Land Title Association (ALTA) is a trade association representing the title insurance industry. Nearly all title insurance companies, as well as abstracters, who prepare a summary of public records relating to the title to a specific parcel of land, and title agents, hold ALTA membership. There are two types of title insurance policies, owner’s and lender’s policies, where an owner’s policy protects the buyer and the lender’s title insurance policy protects the lender. ALTA members include title agents, abstracters, and title insurance companies as active members. The ALTA develops the title insurance forms used voluntarily by insurers across the nation and works to develop a better understanding of its industry among those who use and otherwise interface with land title services.

American Land Title Association (ALTA)

Net amount at risk is the monetary difference between the death benefit paid by a permanent life insurance policy and the accrued cash value.

The net amount at risk is the monetary difference between the amount of money paid out for a life insurance policy and the accrued cash value paid for it by the insured individual. The net amount at risk is the difference between the death benefit paid out on a life insurance policy and the accrued cash value paid for it by the insured. The net amount at risk is the monetary difference between the amount of money paid out for a life insurance policy and the accrued cash value paid for it by the insured individual. Though life insurance is intended to apply to a policyholder's life, if a person lives past the age of 100, then the life insurance policy expires. If the policyholder passes away early into the life insurance policy, the amount paid into it will be small compared to the amount paid into it if the policyholder passed away at a much later point in life.

Net Amount at Risk

Annual premium equivalent (APE) is a common sales measure technique used by insurance companies in the United Kingdom.

An annual premium equivalent (APE) is a common sales measure calculation used by insurance companies in the United Kingdom. The annual premium equivalent is the sum of the total value of regular–or recurring–premiums plus 10% of any new single premiums written for the fiscal year. The annual premium equivalent is the total value of regular or recurring premiums plus 10% of new single premiums written in the period. The present value of new business premiums (PVNBP) is the terminology used in the insurance industry to indicate the present value of total confirmed premiums that will be received from present to future. Calculating the present value of future insurance premiums is important because a premium received today is worth more than the same premium amount due to be paid in the future.

Annual Premium Equivalent (APE)

An anti-indemnity statute protects sub-contractors from risks transferred to them by primary contractors and are often found in construction contracts. 

An anti-indemnity statute is a law defining how much risk can be transferred between parties in a contract and is oftentimes used in construction contracts. The second way is the state has an anti-indemnity statute that prohibits a primary contractor from indemnifying a sub-contractor for the primary contractor’s sole negligence. Whether an indemnity agreement will be enforced may depend on whether the governing state law limits enforcement of indemnity agreements through their anti-indemnity statutes. Whether an indemnity agreement will be enforced may depend on whether the governing state law limits enforcement of indemnity agreements through their anti-indemnity statutes. The third way is the state prohibits a prime contractor from indemnifying a sub-contractor for the primary contractor’s own negligence, regardless of the degree of fault.

Anti-Indemnity Statute

An apportionment is the allocation of a loss between all of the insurance companies that insure a piece of property and is used to determine a percentage of liability for each insurer.

Apportionment applies to many contexts. It typically refers to the allocation of property expenses, such as maintenance, insurance, and taxes, between the buyer and seller at the time of a transaction that involves a piece of real estate. Where insurance is concerned, an apportionment is the allocation of a loss between all of the insurance companies that insure a piece of property. These provisions vary: some policies provide no coverage when other insurance is in place, some pay a pro-rata share, and others apply in case of excess losses not covered by the primary insurance policy. An apportionment clause prescribes the method for determining an insurer's portion of liability for loss where property is covered by more than one insurance policy.

Apportionment

An assessable policy is a type of insurance policy that may require the policyholder to pay additional funds to cover an insurer’s losses.

An assessable policy is a type of insurance policy that may require the owner to pay additional funds to cover an insurer's losses if they are greater than its reserves. Assessable policies, sometimes referred to as assessment insurance, are commonly associated with mutual insurance companies, which are groups of individuals and businesses that pool resources to provide insurance coverage to members. An assessable policy is a type of insurance policy that may require the owner to pay additional funds to cover an insurer's losses if they are greater than its reserves. An assessable policy is a type of insurance policy that may require the policyholder to pay additional funds to cover an insurer's losses. Assessable policies are the opposite of non-assessable policies, which require the insurer to find other ways to find funds that its reserves do not cover.

Assessable Policy

Average severity is the amount of loss associated with an average insurance claim.

Auto Claims Frequency, Severity: What’s Behind the Rise?

Average severity is the amount of loss associated with an average insurance claim. Insurance companies rely on actuaries and the models they create to predict future claims, as well as losses those claims may result in. Insurance companies rely on actuaries and the models they create to predict future claims, as well as the losses those claims may result in. Past data is scrutinized to show the observed amount of loss for the average claim, or to estimate the amount of loss an insurer should expect from the average claim in the future. These models are dependent on a number of factors, including the type of risk being insured, the demographic and geographic information of the individual or business that bought a policy, and the number of claims that are made.

Average Severity

Backdated liability insurance provides coverage for a claim that occurred before the insurance policy was purchased. 

Backdated liability insurance provides coverage for a claim that occurred before the insurance policy was purchased. A typical backdated liability insurance policy is usually a commercial general liability policy that provides coverage for claims of bodily injury or other physical injuries, personal injury (libel or slander), advertising injury, and property damage as a result of a company's products, premises, or operations. Backdated liability insurance is insurance that provides coverage for a claim that occurred before the insurance policy was purchased. Backdated liability insurance is usually commercial general liability insurance that covers bodily injury, personal injury, and property damage as a result of business operations. Backdated liability insurance provides coverage for a claim that occurred before the insurance policy was purchased.

Backdated Liability Insurance

Bad faith insurance refers to a number of ways insurance companies may attempt to escape obligations owed to policyholders. 

Bad faith insurance refers to an insurer’s attempt to renege on its obligations to its clients, either through refusal to pay a policyholder’s legitimate claim or investigate and process a policyholder’s claim within a reasonable period. 1:23
Bad faith insurance can apply to any type of insurance policy—including homeowners' insurance, health insurance, auto insurance, and life insurance—and any type of contract. If an insurance company acts particularly egregiously, a jury may award punitive damages to the policyholder to punish the insurance company for its wrongdoing and to discourage it from acting in bad faith with other policyholders. Looking for evidence that supports the insurance company’s basis for denying a claim and ignoring evidence that supports the policyholder’s basis for making a claim is considered bad faith. Some laws require an insurance company acting in bad faith to pay basic damages to help compensate the victim for having a claim denied, above and beyond the amount owed under the claim.

Bad Faith Insurance

Balance sheet reserves are an amount expressed as a liability on the insurance company's balance sheet. They represent benefits owed to policy owners.

Balance sheet reserves, also known as claims reserves, are accounting entries that show money set aside to pay future obligations. For insurance companies, balance sheet reserves represent the amount of money insurance companies set aside for future insurance claims or claims that have been filed but not yet reported to the insurance company or settled. The balance sheet reserves of insurance companies are regulated so that these companies have sufficient reserves to pay client claims. Balance sheet reserves are entered as liabilities on the balance sheet and represent funds that are set aside to pay future obligations. Balance sheet reserves, also known as claims reserves, are accounting entries that show money set aside to pay future obligations.

Balance Sheet Reserves

Banker’s blanket bond is a fidelity bond purchased from an insurance broker that protects a bank against losses from a variety of criminal acts carried out by employees.

A banker's blanket bond (BBB) is a fidelity bond purchased from an insurance broker that protects a bank against losses from various criminal acts carried out by employees. A banker's blanket bond (BBB) is a fidelity bond purchased from an insurance broker that protects a bank against losses from various criminal acts carried out by employees. A banker's blanket bond is a fidelity bond that protects a bank if an employee carries out a criminal act such as stealing money from a customer's account. A banker’s blanket bond is an insurance policy that provides coverage against the direct financial loss from forgery, cyber fraud, physical loss of or alteration to property, extortion, and employee dishonesty. Some of the types of losses that arise from employee criminal acts covered by a blanket bond include robbery carried out by an employee and forgery.

Banker's Blanket Bond

Bankers professional liability (BPL) insurance is financial protection for banking industry professionals against customers’ claims of wrongdoing.

Bankers professional liability insurance (BPL) is protection for financial professionals and institutions against a customer's claims of wrongdoing, negligence, and errors and omissions. BPL insurance may cover escrow agents, tax planners, financial planners, estate planners, and those in other positions within the financial industry. Bankers professional liability insurance (BPL) is protection for financial professionals and institutions against a customer's claims of wrongdoing, negligence, and errors and omissions. The structure of BPL is as professional liability coverage explicitly targeted to the banking and financial services sector and is also known as errors and omissions insurance (E&O). Professional financial services include specific fee-based services including real estate, notaries, depository, insurance, and brokerage services.

Bankers Professional Liability – BPL Insurance

A basic extended reporting period is a reporting period extension provided to claims-made liability policyholders. 

A basic extended reporting period (BERP) is a reporting period extension provided to claims-made liability policies. Basic extended reporting period (BERP) coverage is usually provided free-of-cost if the insurer is the party who decides not to let the policy renew, cancels the policy, or changes the type of liability policy type. The policy may be canceled or not renewed; it may be replaced with a different type of liability policy, such as an occurrence policy; or it may be replaced with a claims-made policy with a different retroactive date, which is more beneficial to the policyholder because it covers claims from a longer period of time. Basic extended reporting period (BERP) applies to claims made after the retroactive date, and after the policy has been canceled, non-renewed, or changed to a different type of liability policy. A short-term tail, generally lasting 30 to 60 days, is often provided automatically if the insurer cancels or non-renews your policy, though many insurers also offer a long-term tail at an additional cost.

Basic Extended Reporting Period (BERP)

The basic premium factor is composed of the acquisition expenses, underwriting expenses, and profit plus the loss conversion factor adjusted for the insurance charge.

The basic premium factor is the acquisition expenses, underwriting expenses, profit, and loss conversion factor adjusted for the insurance charge for a policy. The basic premium is calculated by multiplying the basic premium factor by the standard premium. If the standard premium is outside of the table ranges—typically a percentage above the estimated standard premium—the basic premium factor is recalculated. The basic premium is less than the standard premium because of the basic premium factor. The basic premium factor is the acquisition expenses, underwriting expenses, profit, and loss conversion factor adjusted for the insurance charge for a policy.

Basic Premium Factor Defined

A basket deductible is a single deductible that is designed to pay for losses from different types of risks. It is designed to reduce the risk associated with business transactions by outlining indemnification.

A basket deductible is a single deductible that is designed to fund losses from multiple types of risks. An insurance company defines a deductible in its insurance policy; in the purchase agreement of a business, the basket deductible specifies the dollar amount of post-closing claims from the buyer which must be exceeded before the buyer may pursue a refund for the claim from the seller. The use of a basket deductible makes the purchase process smoother because it combines all the different risks inherent in purchasing another company in one deductible; in addition, it provides a level of protection to the seller. The use of a basket deductible makes the purchase process smoother because it combines all the different risks inherent in purchasing another company in one deductible; in addition, it provides a level of protection to the seller. A basket deductible is usually used by companies seeking to reduce the risk associated with business transactions—such as a merger or an acquisition—by outlining indemnification and indicating the point at which the seller of the business may be responsible for claims.

Basket Deductible

Batch Clause is a policy provision of liability insurance that limits coverage to defective product claims stemming from a specific production cycle. 

Batch Clause is a policy provision of product liability insurance that limits coverage to claims stemming from defective products from a specific production cycle. Professional liability policies may have a batch clause that limits the amount of deductible that can apply to an event, such as a defective product, regardless of the number of claims filed for damages caused by that product. If the deductible is on a “per claim” basis then it applies to each claim made, which means that the insured will have to pay more money out of pocket if multiple claims are made. A batch clause thus only covers items produced during a specific production run over a specific time period, referred to as a “batch”. Batch Clause is a policy provision of product liability insurance that limits coverage to claims stemming from defective products from a specific production cycle.

Batch Clause

The benefit-expense ratio is an operating metric for the insurance industry that represents benefits paid out divided by profits taken in.

The insurance industry uses the benefit-expense ratio to describe the proportion of money taken in by a company compared to the amount paid out in claims. A single percentage change in the benefit expense ratio can significantly impact a corporation's net income.​​​​​​​
The benefit-expense ratio is combined with the loss-to-gains ratio to arrive at the combined ratio, which is used to assess a company's performance over time.
The benefit-expense ratio compares an insurer's expenses for underwriting insurance to the revenues it receives from those policies. A company will combine the benefit-expense ratio with the loss-to-gains ratio to arrive at a combined ratio. While the benefit ratio looks at company expenses, the loss-to-gain ratio looks at paid claims, including adjustments, compared to the net premium. The benefit-expense ratio is a metric used by the insurance industry to describe the cost of providing underwriting insurance to the revenues it receives from those policies.

Benefit-Expense Ratio

A benefit period is the length of time during which an insurance policyholder or their dependents may file and receive payment for a covered event.

A benefit period is the length of time during which an insurance policyholder or their dependents may file and receive payment for a covered event. The terms of a benefit period can vary, depending on the type of insurance—such as healthcare, disability, long-term care, homeowners, and auto insurance—and whether it's an individual or group plan.
The length of an insurance policy's benefit period will affect the price of the premium because the longer the benefit period, the greater the insurer's risk. New health insurance plans may require an elimination period, a waiting period, and a pre-existing condition exclusion period before the benefit period begins.
**Homeowners' insurance** will usually have a benefit period of one year from the stated effective date. Most individuals are familiar with the benefit period for healthcare insurance, but disability, long-term care, homeowners, and auto insurance policies also carry a benefit period. The length of an insurance policy's benefit period will affect the price of the premium because the longer the benefit period, the greater is the insurer's risk.

Benefit Period

Best's Capital Adequacy Relativity (BCAR) is a rating of an insurance company’s balance sheet strength. It examines an insurer’s leverage, underwriting activities, and financial performance.

Best's Capital Adequacy Relativity (BCAR) is a rating of the strength of an insurance company’s balance sheet. Other factors that can impact the balance sheet strength analysis include liquidity, quality of capital, dependence on reinsurance, quality and appropriateness of reinsurance, asset/liability matching, reserve adequacy, stress tests, internal capital models, and the actions or financial condition of an affiliate and/or holding company, which may include a BCAR calculation at the holding company/consolidated level. By establishing a guideline for the net required capital needed to support balance sheet strength, BCAR can assist analysts in differentiating among the financial strength of insurers and in determining whether a rating unit’s capitalization is appropriate for its risk profile. BCAR takes a look at an insurance company's leverage, underwriting activities, and financial performance, using them to test different financial scenarios and how the insurance company would be impacted. The basic formula for BCAR is as follows:
**_BCAR = Adjusted Policyholders’ Surplus (APHS) / Net Required Capital (NRC)_**
APHS takes into account unearned premiums, assets, loss reserves, reinsurance (equity adjustments), surplus notes, debt service requirements (debt adjustments), and other adjustments, such as potential catastrophe losses and future operating losses.

Best's Capital Adequacy Relativity (BCAR)

Betterment insurance provides additional coverage for permanent improvements made to a property by tenants or landlords that increase its value.

Betterment insurance is supplemental coverage for additions or modifications made by a lessee to a space they lease. For the landlord, if the policy does not include betterment coverage showing the updated value of the structure, they may find the insurance provider will not pay enough in benefits to return the structure to its before-hazard use. Auto insurance policies may also include betterment clauses to prevent the insurance company from overpaying for excessive repairs or upgraded parts. Some auto insurance policies include provisions called betterment clauses, which give insurers the right to refuse to pay for replacement parts on a car that exceeds the “like-kind or quality” terminology of a policy. An entity leasing a building may purchase betterment insurance to protect the company, should they lose access to the use of modifications they made to the structure.

Betterment Insurance

A blanket additional insured endorsement automatically provides coverage to any party to which the insured is contractually required to provide coverage.

A blanket additional insured endorsement is an insurance policy endorsement that automatically provides coverage to any party to which the named insured is contractually required to provide coverage. A common requirement is that the named insured and the party seeking additional insured status must have entered into a contract or agreement in which the named insured has indicated that it will add another party to the policy. A blanket additional insured endorsement is an insurance policy endorsement that automatically provides coverage to any party to which the named insured is contractually required to provide coverage. A blanket additional insured endorsement is the process of providing insurance coverage to those parties that the named insured must provide coverage. Blanket additional insured endorsements do not require the named insured to identify the additional insured by name.

Blanket Additional Insured Endorsement

Blanket contractual liability insurance is liability insurance that provides coverage for all contracts in which the insured is assuming liability. 

Blanket contractual liability insurance is liability insurance that provides coverage for all contracts in which the insured is assuming liability. Blanket contractual liability insurance is liability insurance that provides coverage for all contracts in which the insured is assuming liability. To be allowed to exhibit, the participating company may be asked to provide a certificate indicating that it has commercial liability insurance, contractor’s personal injury insurance, and blanket contractual liability insurance. A business with a blanket contractual liability insurance policy may still want to purchase a separate liability policy to protect against a specific risk, even if only for the short-term. It is possible to have blanket broad form contractual liability insurance or blanket limited form contractual liability insurance.

Blanket Contractual Liability Insurance

A blanket honesty bond is a fidelity bond that protects employers from losses due to dishonest acts of employees.

Protect Your Employee Benefit Plan With an ERISA Fidelity Bond

A blanket honesty bond is a fidelity bond that protects employers from losses due to dishonest acts of employees. An honesty bond is also known as a fidelity bond, an employee dishonesty bond, or a business service bond. A blanket honesty bond is a fidelity bond that protects employers from losses due to dishonest acts of employees. A blanket honesty bond is a fidelity bond that protects employers from losses due to dishonest acts of employees. However, moral hazard is an inherent problem with blanket honesty bonds simply because insurers do not have the opportunity to work with employees every day to observe their honesty like employers.

Blanket Honesty Bond

A blanket bond is insurance coverage carried by brokerages and other financial institutions to protect them against losses due to employee dishonesty. 

Fidelity and Other Indemnity Protection (12-04)

A blanket bond is insurance coverage carried by brokerages, investment bankers, and other financial institutions to protect them against losses due to employee dishonesty. A blanket position bond is a type of blanket bond which provides insurance coverage based on certain roles or positions within a firm and can differ depending on the specific type of position. A blanket bond may also be known as a blanket fidelity bond or blanket honesty bond. There are many types of blanket bonds depending on the need, such as a business service bond, a janitorial bond, and an Employee Retirement Income Security Act (ERISA) bond. A blanket bond is insurance coverage carried by brokerages, investment bankers, and other financial institutions to protect them against losses due to employee dishonesty.

Blanket Bond

A block policy is an insurance policy offering coverage against risks faced by goods that are transported or stored by third parties. Commonly found in commercial insurance, a block policy is designed to protect businesses from property damage.

A block policy is an all-risk insurance policy providing coverage against risks faced by goods transported or stored by third parties. A block policy is an all-risk insurance policy providing coverage against risks faced by goods transported or stored by third parties. Two of the most common kind of block policies are furriers' block policies and jewelers' block policies. A block policy provides coverage against risks businesses face when they contract out transportation and storage of stock goods. To further protect goods shipped from business to customer, there is a need for inland marine insurance, also known as a block policy.

Block Policy

Boiler And Machinery Insurance (BM) provides coverage for physical damage to and financial loss from equipment breakdown.

Boiler and machinery insurance (BM) provides coverage for physical damage to and financial loss from equipment breakdown. BM policies typically provide financial relief in the following ways:
Costs to repair or replace damaged equipment, including labor costs and parts
Lost revenue or income due to downtime or damage done to equipment
Spoiled inventory or covering the cost of replacing perishable goods, which can occur due to failed refrigeration equipment
Any costs that were incurred as a result of the time it took to repair the equipment and restore business operations
Rather than the BM coverage only being available as a monoline insurance policy, increasing numbers of insurance companies now offer it, either as an endorsement or as an integral element of a packaged product, such as a business owners policy.
In addition, because of an increase in equipment that uses some type of “electronic brain,” microprocessor or low-voltage circuitry, financial risk exposures are changing, which are causing changes in premiums. Boiler and machinery insurance, also called equipment breakdown insurance, covers the cost of repairing or replacing the damaged equipment and business losses incurred from the equipment not functioning. Manufacturing equipment, machines, motor burnouts, water pumps, generators, engines, ovens, copiers, cash registers, and any other machines used in business operations
Computers, phones, voice mail as well as fire alarm and security systems
Includes electrical failure, issues with cables, transformers, power surges, and short circuits
HVAC or heating and air conditioning systems, refrigeration units
Any pressure gauges, valves, and boiler equipment
Many modern technologies have not been around long enough for us to completely understand how the equipment can be damaged. Boiler and machinery insurance can cover a wide range of equipment besides boilers and furnaces, including elevators and office equipment.

Boiler And Machinery (BM) Insurance

A bordereau is a report provided by an insurance company for a reinsurer that lists either assets that are insured or claims that have been made.

A bordereau is a report prepared by an insurance company for a reinsurance company detailing either the assets that are covered in part by the reinsurance firm or the actual claims that have been made for damage to property protected by a contract between the two companies. An insurance company will use a bordereau to provide detailed information on the different risks that a reinsurer has accepted.
The purpose of reinsurance is to alleviate some of the risks associated with insuring assets of very high value.
An insurance company uses reinsurers to reduce its risk exposure in exchange for a portion of the premiums it charges. The bordereau comes in two varieties:
A premium bordereau lists all of the items that are protected under the reinsurance contract, including the contact information of the insured, the amount of the risk, the time period of reinsurance coverage, and the critical dates associated with the primary insurance. A bordereau is a report prepared by an insurance company for a reinsurance company detailing either the assets that are covered in part by the reinsurance firm or the actual claims that have been made for damage to property protected by a contract between the two companies. A bordereau is a report from an insurance company to its reinsurer listing either the assets covered or the actual claims paid.

Bordereau

The Bornhuetter-Ferguson technique is a method for calculating an estimate of an insurance company’s losses.

The Bornhuetter-Ferguson technique is a method for calculating an estimate of an insurance company’s losses. Bornhuetter-Ferguson calculates the estimated loss as the sum of reported loss plus IBNR, with IBNR calculated as the estimated ultimate loss multiplied by the percentage of loss that is unreported. The Bornhuetter-Ferguson technique combines features of the chain ladder and expected loss ratio methods and assigns weights for the percentage of losses paid and losses incurred. The Bornhuetter-Ferguson technique estimates IBNR during a period of time by estimating the ultimate loss for certain risk exposures and then estimating the percent of this ultimate loss that was not reported at the time. The Bornhuetter-Ferguson technique, also called the Bornhuetter-Ferguson method, estimates incurred but not yet reported (IBNR) losses for a policy year.

Bornhuetter-Ferguson Technique

A both-to-blame collision clause states that in a collision where both captains were negligent, owners and shippers must share in the losses equally.

A both-to-blame collision clause is part of the ocean marine insurance policy that states that if a ship (vessel) collides with another ship due to the negligence of both, owners and shippers of both vessels must share in the losses in proportion with the monetary values of their cargo and interests before the collision. It also creates a situation in which cargo interests could not recover restitution if the carrying vessel was wholly to blame. The both-to-blame collision clause is designed to preserve the protection a carrier has under the Hague-Visby Rules by giving a contractual indemnity against the cargo interests.
If Ship A collides with Ship B, due to the fault of Ship B, the owner of any goods in Ship A, which are damaged or lost by the fault of Ship B, can claim 100% of the damage from the owners of Ship B. A both-to-blame collision clause is part of the ocean marine insurance policy that states that if a ship (vessel) collides with another ship due to the negligence of both, owners and shippers of both vessels must share in the losses in proportion with the monetary values of their cargo and interests before the collision. However, due to the Both-to-Blame Collision Clause, and in circumstances where apportionment of blame is deemed to be 50/50, the owner of Ship B has the right to claim 50 percent of their liability from the owners of Ship A.
This leaves Ship A with a bill for half the cost of the damage, so Ship A passes that cost back to the owner of the goods, by way of the Both-to-Blame Collision Clause in the Bill of Lading. Some protections also provided under this insurance include:
A collision of the ship with another ship or object.
A ship sinking, capsizing, or being stranded.
Fire, piracy, jettisoning (throwing overboard of property to save other property).
Barratry (fraud or an illegal act by a ship's master or crew).
Damage due to wear and tear, dampness, decay, mold, and war are not included in the coverage.

Corporate Insurance

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