Insurance glossary

A person or organization added to another party's liability policy as an insured. The status must come from the policy or an endorsement; naming a party on a certificate alone does not create it.

The maximum amount an insurer will pay for a series of covered losses during a stated period, commonly the policy term. It is separate from the limit that may apply to one claim or occurrence.

A policy exclusion that removes coverage for claims connected to assault or battery according to its wording. Whether a negligence allegation escapes the exclusion depends on the policy language and governing law.

The recipient identified on a certificate of insurance. A certificate holder receives evidence of coverage; that label alone does not make the recipient an insured under the policy.

A document prepared or issued by an insurer or insurance producer as evidence of property/casualty insurance coverage. It summarizes coverage but does not itself amend, extend, or replace the policy.

A liability policy whose coverage depends on a claim first being made during the policy period or an applicable extended reporting period, subject to the policy's terms and any retroactive date.

Completed operations describes bodily injury or property damage arising after a business's work has been completed or put to its intended use. It is a liability exposure tied to finished work or products, not a promise that the contractor's own defective work will be repaired or that professional errors are covered.

Contractual liability is responsibility created or allocated by a contract, including an agreement to assume another party's specified legal liability. It is not a synonym for every breach of contract and is not automatically insured merely because a promise appears in an indemnity or services clause.

An obligation to provide a legal defense against a claim or proceeding when the governing contract, policy, and applicable law require it. It is distinct from the ultimate obligation to pay a judgment or settlement.

A defined period after a claims-made policy ends during which otherwise covered claims may be reported. It is often called tail coverage, but the policy controls the duration, eligibility, and scope.

A hammer clause is a consent-to-settlement provision that limits an insurer's responsibility when the insured rejects a settlement the insurer recommends. Depending on the wording, the insurer may cap payment at the proposed settlement and defense costs, share the excess risk, or stop funding defense; the policy text controls.

A contractual undertaking to protect another party from legal consequences of specified conduct. Its scope comes from the contract and applicable law; it is not automatically identical to insurance coverage.

A liability policy that responds based on injury or damage occurring during the policy period, even when the claim is made later, subject to the policy's actual terms and exclusions.

The maximum amount available for damages arising from one claim or the same alleged error, omission, or wrongful act, as the policy defines them. It operates alongside any aggregate limit.

Primary and noncontributory describes the requested order of liability insurance: the policy covering an additional insured responds before the additional insured’s own policy and its insurer does not seek contribution from that other insurer for the same covered claim. The phrase does not create additional-insured status or guarantee unlimited limits; policy and endorsement wording control.

Liability coverage for claims arising from an insured's alleged error, omission, or other wrongful act in rendering professional services, as the policy defines those services and subject to its exclusions.

The earliest date from which an act, omission, injury, or damage may fall within a claims-made policy's prior-acts coverage. A claim may still need to be made and reported within the required window.

Vicarious liability is responsibility imposed on a principal or employer for another person's actionable conduct because of their legal relationship, commonly an employee acting within the scope of employment. It is distinct from a claim that the business itself negligently hired, trained, or supervised that person.

A waiver of subrogation is a contract term under which an insured gives up, or limits, the insurer's right to recover from a responsible third party after a covered loss. It allocates recovery risk for the described work or property; it does not create insured status or expand the policy.