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
Procedure in which investment income is paired with each life insurance policy according to the time frame in which the premiums for that particular policy are received. ...
Time interval between the date benefits end under Social Security and the date these benefits resume. For example, survivor benefits are paid only as long as the parent (if less than age ...
Branch of knowledge dealing with the mathematics of insurance, including probabilities. It is used in ensuring that risks are carefully evaluated, that adequate premiums are charged for ...
Provision of liability policies and the liability sections of package insurance policies, such as the personal automobile policy (pap), that pay medical expenses without regard to fault. ...
Specified limit on the dollar amount of coverage for a given loss. ...
Falsification of a material fact in such a manner that, had the insurance company known the truth, it would not have insured the risk. A material misrepresentation gives an insurance ...
Agreement of two or more insurance companies to provide a product or service. ...
Monetary value of the reputation of a business. Goodwill is an intangible asset and thus may be difficult to measure. ...
Continuing on an indefinite basis. ...
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