Insurance Glossary F-J

Below is an Insurance Glossary of terms and definitions related to various coverages

F

Fair Credit Reporting Act... Federal law allows consumers who are denied insurance because of information contained in a credit report to be notified and allowed to obtain information used in the report from the reporting agency.

Federal Employers Liability Act (FELA)... Federal law that provides benefits to injured railroad workers who are exemp under state Workers Compensation laws.

Federal Terrorism Risk Insurance Act Of 2002... Federal law designed to ensure that insurance coverage for terrorism losses under commercial lines policies will be available and affordable. It requires insurers to pay a specific amount for terrorism losses in a given calendar year; once the limit is reached, the federal government will reimburse insurers 90% of insured losses that exceed the limit.

Fidelity Bond... class of bonds that guarantees an employee's honest discharge of duty; written to protect an insured from dishonest acts by employees.

Fiduciary... person who stands in a special relationship of trust to another person.

Fiduciary Bond... type of Surety bond that guarantees that a fiduciary will fulfill its obligations set forth by law.

Filed Form... standardized Inland Marine form that can be written under the Commercial Inland Marine coverage part of the Commercial Package policy.

Film Coverage Form... Filed Commercial Inland Marine form that covers exposed motion picture film until production is complete and positive prints are made.

Financial Responsibility Laws... state laws that require owners or operators of autos to provide evidence that they have the funds to pay for automobile losses for which they might become liable. Auto insurance is the usual method of providing this evidence to the state.

First Named Insured... first person listed in the Declarations as an insured. The first named insured may have a higher level of duties or rights under the policy.

Flat Cancellation... cancellation of a policy by the insured or the insurance company on the policy effective date.

Floater... insurance policy that covers property wherever it is located.

Floor Plan Coverage Form... Filed Commercial Inland Marine form that covers stock that is subject to a floor plan arrangement, where a dealer borrows money from a lender with which to pay for merchandise.

Fraternal Benefit Society... an incorporated society or order, without capital stock, that is operated on the lodge system and is conducted solely for the benefit of its members and their beneficiaries, and not for profit. Fraternal benefit societies offer insurance that is available only to members.

Fraud... a deliberate misrepresentation that causes harm; an all-out effort by one party to deceive and cheat the other.

Freight Insurance... type of Ocean Marine insurance that protects the insured against the loss of shipping costs.

Functional Replacement Cost... a method to determine reimbursement for some losses, particularly those to antiques, ornate or custom construction. The damaged property is repaired or replaced with less expensive, but functionally equivalent, materials.

G

Garage Coverage Form... Commercial Auto coverage form designed for garage businesses such as dealers, service stations, garages, and parking lots. it includes coverage for liability arising out of auto and garage operations, physical damage and garagekeepers' losses arising out of owned, nonowned and hired autos.

Garagekeepers Insurance... coverage that is part of the Garage coverage form. Covers a garage risk's legal liability for customers' autos in the care, custody or control of the garage. At the insured's option for an additional premium, can also apply without regard to fault.

General Damages... type of compensatory damages that reimburse the injured party for such things as pain and suffering and disfigurement.

H

Hazard... something that increases the chance of loss.

Hired And Nonowned Auto Liability Endorsement... Businessowners policy endorsement used to cover hired or nonowned autos used by the business.

Hold Harmless Agreement... contractual arrangement where one party assumes the liability of a situation and relieves the other party of responsibility.

Home Day Care Coverage Endorsement... Homeowners policy endorsement used to provide coverage for home day care business.

Homeowners Policy... Personal multi-line policy for homeowners that includes both Property and Liability coverages. There are different forms that provide varying degrees of property coverage. Liability coverage is the same in all forms.

I

Incidental Occupancy... a business conducted in a dwelling used primarily as a residence with no other businesses operating on the same premises. Individual insurers have specific guidelines about the types of incidental businesses permitted, but examples include business or professional offices and private schools or instructional studios.

Indemnity... principle of insurance that provides that when a loss occurs, the insured should be restored to the approximate financial condition he or she occupied before the loss occurred, no better or no worse.

Inland Marine Insurance... form of insurance originally designed as an extension of Ocean Marine coverage to insure transportation of goods over land. Today it covers a variety of portable property, in addition to goods in transit. Available as personal or commercial insurance.

Insurable Interest... any actual, lawful and substantial economic interest in the safety of preservation of the subject of the insurance from loss or destruction or financial damage or impairment.

Insuring Agreement... section of an insurance policy that describes what is covered and the perils the policy insures against.

J

Jewelers Block Coverage Form... Filed Commercial Inland Marine form for jewelers that covers the insured's stock in trade and the property of others while it is on or off the premises.

Joint Ownership Coverage Endorsement... Personal Auto policy endorsement that allows the policy to be issued to two or more persons who live in the same household or two or more individuals who are related in another way besides husband and wife.

Jones Act... Federal law that allows members of ships' crews to sue their employer/shipowner at common law for injuries caused by the employer's shipowner's negligence.

Judicial Bond... category of Surety bond that guarantees that the principal will fulfill certain obligations set forth by law. Includes Fiduciary bonds and Court bonds.

Insurance Glossary L-O