Key Definitions
This type of insurance covers multiple assets under one limit
What is Blanket Insurance?
This CGL coverage includes libel, slander, and repetitional harm.
What is Defamation?
This legal doctrine requires establishing duty, breach, causation, and damages for liability to attach
What is Negligence?
This 12-month valuation of net income and operating expenses serves as the basis for calculating the business income coinsurance requirement
12-month BI Value
This first step in loss forecasting requires compiling this dataset.
Historical loss data
This factor adjusts early claim estimates to their projected ultimate value
What is Loss Development Factor ?
This business income coverage option limits the insurer's obligation to a maximum of 120 days, regardless of restoration period
What is Maximum Period of Indemnity
This liability principle attributes responsibility to one party for the actions of another, typically within employment relationships.
What is Vicarious liability?
For Duke Company, this dollar amount represented the appropriate coinsurance basis under the business income form
$2 Million
This actuarial step removes losses whose development has reached maturity.
Limit loss development
This term describes business vulnerability caused by another company's failure
What is Dependency exposure ?
This reporting mechanism adjust insurance coverage to reflect fluctuating inventory values throughout the policy year
What is Value Reporting Form?
This wrongful act, recognized under civil law, results in harm or loss to another party
What is a tort?
This optional valuation method allows the insurer ad insured to pre agree on a property value, bypassing coinsurance penalties
What is Agreed Value?
These two economic adjustments refine historical data prior to projecting future losses.
Trend and inflation adjustments
These costs stay the same even when operations temporarily halt
What is Continuing expenses ?
This ratio-based measure evaluates an organization's anticipated 12-month financial exposure for coinsurance purposes.
What is Quotient?
This category of tort arises from deliberate conduct intended to cause harm, such as defamation or fraud
What is intentional tort?
This optional business income provision applies specified fractional limits to each 30-day period of indemnity
What is Monthly limit of indemnity?
This analytical step estimates future losses after adjusting for development and economic shifts.
What is loss forecasting?
These damages compensate for pain, suffering, and emotional distress.
What is General Damages?
This term represents the maximum duration for which business income coverage will respond following an insured event
What is Period of Restoration
The doctrine assigns liability even when no negligence is proven, often applied to inherently dangerous activities
Strict Liability
This quotient threshold indicates that the insured company must carry at least 1.25% of projected exposure to avoid a coinsurance penalty.
Quotient is less than and equal to 1.25
This specific factor, derived from the loss development triangle, adjusted 54-to 66-month losses.
1.23407