Glossary of Terms

TERM	DEFINITION
APPLICATION	Written submission to an insurance company's underwriting department setting forth requested coverages and limits and certified information about the applicant.
BINDER	An insurance binder is a temporary insurance contract which is issued pending the issuance of a policy. Binders may be either written or oral, although an oral binder should be followed by a written binder whenever a delay may occur in issuing an insurance policy. Although valid during its term, the binder is automatically extinguished when the policy is issued.
CLAIMS ADJUSTER	Individual responsible for the administration of benefits and costs under an insurance policy. Claims adjusters may either be employees of the insurer or outside service providers.
CLAIMS-MADE COVERAGE	An insurance policy that provides coverage only if a claim is made during the policy period or any applicable extended reporting period. A claim made during the policy period may be charged against a claims-made policy even if the injury or loss occurred many years prior to the policy period. If a claims- made policy has a retroactive date, an occurrence prior to that date is not covered.
DECLARATIONS PAGE	A page usually attached to an insurance policy which is deemed to be part of the insurance policy providing information about and the identity of the insured and the type and nature of coverage provided.
DEDUCTIBLE	A deductible eliminates coverage below a certain threshold dollar amount or expressed as a percentage. A deductible clause requires the insured to bear risk in each and every loss up to the deductible limit. In theory, deductibles reduce the price of insurance by eliminating numerous small claims that are relatively expensive to handle and also decrease moral hazard.
EFFECTIVE DATE	The date on which coverage is deemed to be effective under the terms of the policy (claims-made or occurrence).
ENDORSEMENT	In property and liability insurance, standard or printed policies often do not suit a particular need. Modification of standard policies is made by adding special provisions to the basic contract by an endorsement which may alter coverages to satisfy particular needs. Endorsements generally supersede the standard policy provisions and may be altered by later endorsements.
"FIRST-DOLLAR" DEFENSE	Defense inside the policy limits, but outside the deductible.
HOTLINE/RISK MANAGEMENT	Many insurers provide some type of risk management service, such as a number you may call ("hotline") if you have a question or concern, seminars on malpractice prevention, and/or newsletters on malpractice prevention.
INSURANCE PRODUCER	An insurance producer generally indicates a person who solicits, negotiates, effects, procures, delivers, renews, continues, or binds policies of insurance. Insurance providers include agents and brokers. Although each assists the insurance consumer, both agents and brokers legally represent the insurance company, except under special circumstances.
LIMITS OF LIABILITY "PER CLAIM" AND LIMITS IN THE "AGGREGATE"	An insurance policy may contain a specified limit expressed in a dollar value beyond which the insurance policy will not offer coverage for a single claim. Additionally, a professional liability insurance policy may contain an overall aggregate limiting the total value of all claims made during the term of the policy.
NOTICE OF LOSS	Many insurance policies require the insured to provide immediate written notice to the insurer of any loss or occurrence or any other event which may result in a loss or occurrence. In liability policies, there are generally two types of notice clauses; one deals with the notice of an event, and the other deals with the notice of a claim or suit.
OCCURRENCE COVERAGE	Means an insurance policy that provides liability coverage only for injury or damage that occurs during the policy term, regardless of when a claim is actually made. A claim made in the current policy year could be charged against a prior policy year, or may not be covered, if it arises from an occurrence prior to the effective date.
"PAC MAN" POLICY	Slang term which provides that the costs of defending a claim on behalf of an insured reduce the policy limit by the costs of providing the defense under the policy.
PANEL COUNSEL	Insurance companies may utilize lists of pre-approved attorneys to act as defense counsel on behalf of insureds.
PRIOR ACTS COVERAGE	A policy endorsement that generally provides liability coverage to the insured for acts or occurrences prior to the effective date of the policy.
RETROACTIVE DATE	The date on a claims-made policy which denotes the commencement date of coverage under the policy.
SELF-INSURED RETENTION ("SIR")	An amount which the insured elects to self-insure prior to the attachment of the limits of a liability insurance policy. An SIR is generally considerably larger than a deductible and may be utilized to moderate the costs of the purchase of insurance.
"TAIL" - EXTENDED REPORTING PERIOD COVERAGE	In the event an occurrence insurance policy is purchased to replace a claims-made policy, insurance coverage may not be available for a claim arising during the period of claims-made coverage unless the insured has purchased an extended reporting period under the claims-made policy. Purchasing "tail" coverage may also be advisable when changing affiliations, upon ceasing the practice of law, and during interim periods of time between the active practice of law.