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
Modified collateral split dollar life insurance plan under which the employee purchases and owns a life insurance policy on the employee's own life. The employer makes the unscheduled ...
Section of a policy that specifies the dollar amount or percentage of any loss that the insurance does not pay. Most property and medical policies specify that the first portion of any loss ...
Coverage in which an insurer is not bound to cede and a reinsurer is not bound to accept a risk. A separate reinsurance contract covers each cession. The contract is automatically renewed ...
Trust instrument that permits the owner of a residence (grantor) to transfer ownership of that residence with the grantor still being allowed to stay in that residence for a stipulated ...
a contract in life insurance that includes elements of whole life and term insurance. in pensions, a combined life insurance policy and a side (auxiliary) fund to enhance the amount of a ...
Activities of interest in underwriting an application for life insurance to determine the rate classification (premium) for the applicant. For example, a sky diver is at greater personal ...
In marine insurance, clause giving an insured the right to abandon lost or damaged property and still claim full settlement from an insurer (subject to certain restrictions). Two types of ...
Insurance written for a period of time greater than one year. ...
Type of logic that makes the assumption that what has happened in the past will happen in the future, given the same conditions surrounding the two occurrences. In other words, "History ...
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