General Liability
Insurance protecting commercial insureds from most liability exposures other than automobile and professional liability.

Professional Liability
A type of liability coverage designed to protect traditional professionals (e.g., accountants, attorneys) and quasi-professionals (e.g., real estate brokers, consultants) against liability incurred as a result of errors and omissions in performing their professional services. Although there are a few exceptions (e.g., physicians, architects, and engineers), most professional liability policies only cover economic or financial losses suffered by third parties, as opposed to bodily injury (BI) and property damage (PD) claims. This is because the latter two types of loss are typically covered under commercial general liability (CGL) policies. The vast majority of professional liability policies are written with claims-made coverage triggers. In addition, professional liability policies contain what are known as "shrinking limits," meaning that unlike CGL policies (where defense costs are paid in addition to policy limits), the insurer's payment of defense costs reduces available policy limits. Accordingly, when attempting to determine appropriate policy limits, insureds must consider the fact that because defense costs are often a high proportion of any claim settlement or judgment, they must usually purchase additional limits. The most common exclusions in professional liability policy forms are for BI, PD, and intentional/dishonest acts.

Workers Compensation
The system by which no-fault statutory benefits prescribed in state law are provided by an employer to an employee (or the employee's family) due to a job-related injury (including death) resulting from an accident or occupational disease.

Auto
As the term is currently defined in Insurance Services Office, Inc. (ISO), commercial auto and commercial general liability (CGL) insurance policies, any land motor vehicle, trailer, or semitrailer designed for travel on public roads; or any other land vehicle that is subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged. The term "auto" does not include "mobile equipment." This definition is important in determining whether liability coverage is afforded under an auto liability policy or a CGL policy (in the case of mobile equipment).

Property
First-party insurance that indemnifies the owner or user of property for its loss, or the loss of its income-producing ability, when the loss or damage is caused by a covered peril, such as fire or explosion. In this sense, property insurance encompasses inland marine, boiler, and machinery (BM), and crime insurance, as well as what was once known as fire insurance, now simply called property insurance: insurance on buildings and their contents.

Umbrella
A policy designed to provide protection against catastrophic losses. It generally is written over various primary liability policies, such as the business auto policy (BAP), commercial general liability (CGL) policy, watercraft and aircraft liability policies, and employers liability coverage. The umbrella policy serves three purposes: it provides excess limits when the limits of underlying liability policies are exhausted by the payment of claims; it drops down and picks up where the underlying policy leaves off when the aggregate limit of the underlying policy in question is exhausted by the payment of claims; and it provides protection against some claims not covered by the underlying policies, subject to the assumption by the named insured of a self-insured retention (SIR).

Mmgt. Liability
Insurance that covers exposures faced by directors, officers, managers, and business entities that arise from governance, finance, benefits, and management activities (also called "executive liability insurance"). This includes (1) directors and officers (D&O) liability insurance, (2) employment practices liability (EPL) insurance, (3) fiduciary liability insurance, and (4) "special crime" insurance (covering kidnap, ransom, and extortion exposures). These coverages may be written as stand-alone insurance policies or combined into a single, "package" policy. Management liability policy "package" policies usually contain a set of common conditions applying to all of the coverage lines purchased. In most cases, an insured must select a minimum of two types of coverage to be eligible to purchase a management liability "package" policy. This arrangement offers meaningful premium discounts because much of the same data is needed to underwrite employment practices, D&O, fiduciary, and special crime coverages. Management liability "package" policies are usually available only to privately held firms, not-for-profit organizations, and small publicly traded companies (i.e., those with annual sales of under $25 million). Large publicly traded firms generally purchase stand-alone policies.

General Liability
Insurance protecting commercial insureds from most liability exposures other than automobile and professional liability.

Professional Liability
A type of liability coverage designed to protect traditional professionals (e.g., accountants, attorneys) and quasi-professionals (e.g., real estate brokers, consultants) against liability incurred as a result of errors and omissions in performing their professional services. Although there are a few exceptions (e.g., physicians, architects, and engineers), most professional liability policies only cover economic or financial losses suffered by third parties, as opposed to bodily injury (BI) and property damage (PD) claims. This is because the latter two types of loss are typically covered under commercial general liability (CGL) policies. The vast majority of professional liability policies are written with claims-made coverage triggers. In addition, professional liability policies contain what are known as "shrinking limits," meaning that unlike CGL policies (where defense costs are paid in addition to policy limits), the insurer's payment of defense costs reduces available policy limits. Accordingly, when attempting to determine appropriate policy limits, insureds must consider the fact that because defense costs are often a high proportion of any claim settlement or judgment, they must usually purchase additional limits. The most common exclusions in professional liability policy forms are for BI, PD, and intentional/dishonest acts.

Workers Compensation
The system by which no-fault statutory benefits prescribed in state law are provided by an employer to an employee (or the employee's family) due to a job-related injury (including death) resulting from an accident or occupational disease.

Auto
As the term is currently defined in Insurance Services Office, Inc. (ISO), commercial auto and commercial general liability (CGL) insurance policies, any land motor vehicle, trailer, or semitrailer designed for travel on public roads; or any other land vehicle that is subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged. The term "auto" does not include "mobile equipment." This definition is important in determining whether liability coverage is afforded under an auto liability policy or a CGL policy (in the case of mobile equipment).

Property
First-party insurance that indemnifies the owner or user of property for its loss, or the loss of its income-producing ability, when the loss or damage is caused by a covered peril, such as fire or explosion. In this sense, property insurance encompasses inland marine, boiler, and machinery (BM), and crime insurance, as well as what was once known as fire insurance, now simply called property insurance: insurance on buildings and their contents.

Umbrella
A policy designed to provide protection against catastrophic losses. It generally is written over various primary liability policies, such as the business auto policy (BAP), commercial general liability (CGL) policy, watercraft and aircraft liability policies, and employers liability coverage. The umbrella policy serves three purposes: it provides excess limits when the limits of underlying liability policies are exhausted by the payment of claims; it drops down and picks up where the underlying policy leaves off when the aggregate limit of the underlying policy in question is exhausted by the payment of claims; and it provides protection against some claims not covered by the underlying policies, subject to the assumption by the named insured of a self-insured retention (SIR).

Mmgt. Liability
Insurance that covers exposures faced by directors, officers, managers, and business entities that arise from governance, finance, benefits, and management activities (also called "executive liability insurance"). This includes (1) directors and officers (D&O) liability insurance, (2) employment practices liability (EPL) insurance, (3) fiduciary liability insurance, and (4) "special crime" insurance (covering kidnap, ransom, and extortion exposures). These coverages may be written as stand-alone insurance policies or combined into a single, "package" policy. Management liability policy "package" policies usually contain a set of common conditions applying to all of the coverage lines purchased. In most cases, an insured must select a minimum of two types of coverage to be eligible to purchase a management liability "package" policy. This arrangement offers meaningful premium discounts because much of the same data is needed to underwrite employment practices, D&O, fiduciary, and special crime coverages. Management liability "package" policies are usually available only to privately held firms, not-for-profit organizations, and small publicly traded companies (i.e., those with annual sales of under $25 million). Large publicly traded firms generally purchase stand-alone policies.