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
An exception to section 101 (a) (1) OF THE INTERNAL REVENUE CODE tax-exempt Status Of the DEATH BENEFIT in a life insurance policy where the transfer of the interest in the policy by the ...
Calculation of insurance premiums based on an age less than the current age of the insured. ...
Types of contracts that insure building contractors for damage to property under construction. The completed value form requires a 100% coinsurance because insurance carried must equal the ...
Automobile insurance plan, debated for a number of years, that is financed through a surcharge of a given number of cents per gallon (estimates run from 30 to 40 cents) to be paid by the ...
Type of business interruption insurance policy that provides a specific daily dollar amount benefit to the business owner for each day the business is unable to resume normal business ...
Denial of coverage for various perils (such as war, flood); hazards (storing dynamite in the home, thereby increasing the chance of loss); property (such as pets); and locations. These are ...
System whereby the re insurer shares losses in the same proportion as it shares premium and policy amounts. Proportional reinsurance may be divided into the two basic forms: automatic ...
Method of funding a pension plan under which a single premium payment is made to fund a single unit of benefit for one year of recognized service with the employer. For example, if the ...
Coverage on more than one person that pays a benefit after all of the insureds die. This type of joint life policy is significantly cheaper than a regular policy. Survivorship life ...
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