Long-tail Liability
One where an injury or other harm takes time to become known and a claim may be separated from the circumstances that caused it by as many as 25 years or more. Some examples: exposure to asbestos, which sometimes results in a lung disease called asbestos; exposure to coal dust, which might cause black lung disease; or use of certain drugs that may cause cancer or birth defects. These long-tail liabilities became very expensive for many corporations in the 1970s and 1980s, also causing problems for insurers because it was unclear when the situation that gave rise to the claim happened and who should pay the claim. One theory, the MANIFESTATION/INJURY THEORY, states that the insurer is responsible whenever the disease is diagnosed. The other view, the OCCURRENCE/INJURY THEORY, states that the insurer must pay only when the person is injured.
Popular Insurance Terms
Coverage that exceeds the normal insurance capacity of an insurer or reinsurer. ...
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Provision of liability insurance that excludes coverage for dishonest acts of an insured. ...
Payment under a state-sponsored program for victims of crimes. ...
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Standards used to determine claims payments in cases of overlapping property/liability insurance coverage. At one time, each type of insurance had its own rules to govern claims where more ...
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