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
Periodic payments to an annuitant. ...
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Clause in a property insurance policy that requires the insurance coverage in that policy to be allocated in the proportion that it bears to the total insurance coverage in force from all ...
Provision in many property insurance policies that allows an insured to pick coverage for selected perils. The choices are explosion; explosion, riot and civil commotion; explosion, riot ...
Dividends paid historically, currently, and projected. ...
Type of pension plan in which the employer (if noncontributory plan) or the employer and employee (if contributory plan) make level annual premium payments to fund the future retirement ...
Trade association of surplus lines agents and insurers. ...
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