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
Insurance marketed through advertising in such media as newspapers, magazines, television, and radio. The mail is used to collect the application and distribute the policy. An insurance ...
Theory that the probability that two independent events will occur is equal to the probability that one independent event will occur times the probability that a second independent event ...
Failure to act with the legally required degree of care for others, resulting in harm to them. ...
Quantitative measurement of the total costs (losses, risk control costs, risk financing costs, and administration costs) associated with the risk management function, as compared to a ...
Arrangement whereby an insurance company agrees to pay specified health care service vendors a predetermined sum for providing such services to the covered individuals. ...
Coverage for motorized vehicles, each of which requires separate policies for property damage and liability exposures. Motorized vehicles are not covered under a homeowners insurance policy ...
Exception in general liability policies for all expenses associated with product recall. In recent years, there have been increasing instances of federal recalls. In addition, there have ...
Annuity modified joint life and survivorship annuity under which the income payments are reduced to one-half or two-thirds of the initial income amounts upon the death of the first ...
Annuity that guarantees that a specific sum of money will be paid in the future, usually as monthly income, to an annuitant. For example, a $1000-a-month income benefit will be paid as long ...
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