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CANCELLATION

Termination of an insurance policy before the end of the stated period. There are only three ways in which cancellation can be effected: 1.) Surrender of the original policy by the insured, or 2.) Written Notice to the insured (and mortgagee, if any) by the company or agent, or 3.) the signing of a Lost Policy Release by the insured (and mortgagee, if any). Types of Cancellation: Flat: Cancellation of a policy as of its inception date with no premium charge. (Note: In some cases the company is entitled to a fee called a “Minimum Rentention” to cover the cost of processing the policy. Short-Rate: Cancellation at the request of the insured, with the return premium credit less than proportional to the unexpired term. Pro Rata: Cancellation by or at the request of the company or the agent, with the return premium credit proportional to the unexpired term.

CAPACITY

The maximum amount or limit of insurance a company will write on any one risk.

CAPITAL STOCK COMPANY

See Stock Company.

CAPTIVE AGENT

See Direct Writer.

CAPTIVE INSURANCE COMPANY

An insurance company owned by a single interest or a combination of similar interests who control the stock with the purpose of obtaining insurance coverage for its business operations at a lower cost than the market offers. It may be a Non-Admitted Company, Non-Resident or Foreign, and under special circumstances may supply reinsurance to a self-insurer or a Domestic Company. (See Non-Admitted Company.)

CARGO POLICY

A type of insurance covering "Goods and Merchandise in Transit" (by ship, motor carrier, rail or air). Forms vary greatly with regard to exclusions and limitations, and are generally tailored to the individual risk. Common exclusions are what might be expected: loss of market, strikes, locked-out workers, for example. Cargo insurance may be written on either a specified (named) perils or an all-risk basis.

CARRIER

See Insurance Company or Common Carrier.

CASH VALUE

See Actual Cash Value.

CASHIER’S CHECK

A bank’s own check, drawn on its own account and signed by the cashier or other authorized official. It is used to pay direct obligations of the bank, to disburse the proceeds of a loan to the borrower or to credit his account. It is also sold to customers for domestic remittances where a personal check may not be acceptable to the payee. (Compare Certified Check)

CASUALTY INSURANCE

A broad, loose term denoting generally those classes of insurance concerned with losses due to legal liability to third -persons, and also such lines as Accident and Health, Bonds, etc. which would not properly be classified as "Property Insurance." The line between "Property" and "Casualty" insurance cannot be finely drawn. Burglary and Robbery, for example, have always been, and still are, considered "Casualty" lines, and yet, because they involve loss to property and are considered "First Party" situations (between company and insured), such losses could be classified under the “Property Insurance” category without much argument. For purposes of ready understanding and assignment and apportionment under the (see) “Guiding Principles” for losses involving overlapping coverages, however, the traditional terms and definitions of "Property" and "Casualty" are retained. In line with this, a burglary loss is still considered a "Casualty" loss.

CATASTROPHE

A severe loss usually covering a relatively wide area, such as one resulting from a hurricane, tornado, conflagration, flood, etc. (See also Shock Loss and Umbrella Policy.)

CATHODE RAY TUBE (CRT)

A display screen much like a television screen which shows data "called up" by a terminal keyboard, Sometimes called a "Display Screen" or simply "Screen," but mostly referred to as a "CAT."

CEDING CARRIER

See Reinsurance.

CENTRAL PROCESSING UNIT (CPU)

This unit is the heart of the computer, without which no processing could be done. There are three basic parts in the Central Processing Unit: the Control Unit which interprets instructions from an Input Device and orders the other two parts to perform their functions; the Storage Unit which holds both instructions and data for the desired use of the system; and the Arithmetic and/or Logic Units which perform the required operations on the data entered into the system.

CERTIFICATE OF INSURANCE

Evidence of insurance, usually in the form of a certified copy of the policy. Also, a description of specific details of the property covered under a "Master" or "Open" policy. The certificate usually carries with it the obligation on the part of the insurance company to notify the holder of the certificate in the event of a change in the terms or the cancellation of the policy. A description of insurance in force does not bear this obligation is often referred to as a "Memorandum of Insurance."

CERTIFIED CHECK

A bank’s customer’s check upon which an officer of the bank or other authorized person has stamped the word "Certified," inserted the name of the bank and signed his name. By its certification, the bank immediately transfers the amount of the certified check into its own funds to guarantee payment of the check when it is presented for payment. (Compare Cashier’s check.)

CERTIFIED MAIL

A special service provided by the United States Postal Service. For insurance purposes, Certified Mail is considered legal proof of mailing, as to the date and the addressee. When this class of mail is brought to the sending post office, it is numbered and recorded, with a receipt given to the mailer. The mail is then treated just as other First Class Mail until it reaches the delivering post office, which then records it before giving it to the carrier for delivery. The mail, on delivery, must be signed for by the addressee or someone acting for the addressee. This receipt is then kept on file at the delivering post office so that evidence of delivery may be available at a later date if necessary. For an additional charge, the Postal Service will obtain and return to the sender a "Return Receipt" which shows the date of delivery and the person signing. If the certified mail is to be signed for only by the addressee, with return receipt, the mail is marked "Restricted Delivery," and an additional charge is made for this service. (See also Registered Mail.)

CHANGE IN OCCUPANCY

When the use or occupancy of a building is changed (e.g. a dwelling is converted from a two-to a three-family, or to a partial or complete business or commercial use, or vice versa) involving alteration or not, the change may result in a use or classification either increasing or decreasing the exposure (risk of loss), the insurance company must be notified. Failure to notify could result in voiding of policy coverage. If the company is notified and the change results in an increase in exposure, the company has the option of cancelling or adjusting the premium to reflect the increase. The insured may also request an adjustment of premium if he feels that the change results in a decrease in exposure. (See Broker (or Agent} of Record.)

CHARTERED LIFE UNDERWRITER (CLU)

A professional designation awarded to those who have completed the prescribed examinations and have satisfied the experience requirements of the American College of Life Underwriters. Comparable to the professional level of (see) Chartered Property and Casualty Underwriter (CPCU) and Certified Public Accountant (CPA).

CHARTERED PROPERTY AND CASUALTY UNDERWRITER (CPCU)

A professional designation awarded to those who have the required experience and have passed the prescribed examinations. Program is under the auspices of the American Institute for Property and Liability -Underwriters.

CHATTEL MORTGAGE

A mortgage on movable or personal property as opposed to real property (land and buildings). (See also Encumbrance, Lien and Mortgage.)

CHATTEL MORTGAGE NON-FILING INSURANCE

Insurance designed to protect a lending institution (bank, savings and loan association, credit union, etc.) against financial loss in the event it is unable to repossess property on which it has a chattel mortgage, or to enforce its rights to the property as a result of intentional non-filing of the chattel mortgage with the proper authorities.

CHECKING SLIP

A sheet accompanying manual pages which are replacements or additions to existing pages. Lists page number(s) of the manual page(s), edition or effective date(s) and frequently includes a brief explanation of the important changes. These "checking slips" should be filed together in the front of the manual (or section) after changes have been made for later reference and "checking." Replaced pages may remain in the manual plainly marked "Replaced" (we recommend this procedure), or they may be discarded.

CIVIL (OR PUBLIC) AUTHORITY CLAUSE

Under Fire Insurance, any order by a civil (public) authority to destroy insured property to prevent or retard the spread of fire (provided such fire, even though not on the premises, originated from a peril not excluded under the policy) is covered. Under Business Interruption, Homeowners Additional Living Expenses and Rent and Rental Value, denial of access to insured property by Civil Authorities (for inspection purposes, etc.), coverage is extended for a period not to exceed two seeks when denial is direct result of damage to adjacent premises by a peril insured under the policy. Under Transportation Insurance, Common Carrier is not responsible for delay occasioned by order of Civil Authority.

CIVIL ACTION

A legal action to recover money, property, rights or privileges by one party from another, claiming injury or damages. (See Tort; Criminal Action.)

CIVIL COMMOTION

A serious and prolonged disorder of and by a number of people. When coverage for this hazard is provided, it includes coverage of riot, riot attending a strike, and in most forms coverage includes direct loss from pilferage and looting occurring during and at the immediate location of the riot or civil commotion. (See also Riot.)

CIVIL DISORDER LOADING

See Loading.

CLAIM

A request for indemnification. (See Indemnity.) First Party Claim: A request for indemnification for a loss involving only the insured and his insurance company. Third Party Claim: A request for indemnification of a loss by other than the insured (a "Third Party") for damages alleged to have been caused by the insured. The term "Claim" also is used to refer to the estimated amount of the loss.

CLAIMANT

The one who makes the claim.

CLAIMS EXAMINER (SUPERVISOR)

An individual who is charged with the examination, investigation and evaluation of claims in process. Working closely with the adjuster in procedures, they agree on the amount of reserves to be set aside for pending claims.

CLAIMS REVIEW (AUDIT)

A periodic review of the claims of an agency (particularly whose which have draft authority.) Bonding companies require these audits, and they may even be conducted by the state insurance department when such action is indicated.

CLASS RATES

See Minimum Rates.

CLASS, CLASSIFICATION

A term used to indicate an established category into which a person, risk, degree of protection, operation or other division is placed for the purposes of determining premium or underwriting decision.

CLASSIC AUTOMOBILE

Term usually applied to an automobile which is not old enough to qualify as an "Antique Automobile" but by reason of its make, model, year and condition, has appreciably increased in market value. (See Antique Automobile; Appreciation.)

CLAUSE

Section of a policy or endorsement dealing with a specific phase of coverage, exclusion of coverage, restriction or other condition, such as “Coinsurance Clause,” ‘Mortgage Clause,” etc., usually modifying, limiting or otherwise spelling out certain conditions.

CLOSING

A meeting of the buyer and the seller for the purpose of transfer of title of real property from one to the other. As a general rule, each party is represented by his own attorney, although, “closings” are frequently held in the offices of attorneys who specialize in this type of transaction, in which case the interests of all parties concerned are protected. At this time all mortgage arrangements, title search, insurance, etc., are checked to see that all are in order before legal transfer is made and recorded.

COBAL

A computer language most widely used in business data processing. It is an acronym for Common Business Oriented Language.

CODE ("STATISTICAL CODE")

A number (digit) or series of numbers representing the various characteristics of a risk, such as type of policy, class of occupancy, degree of protection, driver class, etc. Enables information to be computerized for statistical analysis, billing and retrieval for actuarial and other purposes.

COINS, COIN COLLECTIONS

See Numismatic Property.

COINSURANCE (REDUCED RATE CONTRIBUTION) COINSURER

An arrangement by which the insured, in consideration of a reduced rate, agrees to carry an amount of insurance equal to a percentage of the total value of the property insured. For example: A building is valued at $10,000, and the 80% coinsurance rate is agreed upon. In accepting this rate, the insured implies agreement to carry at least $8,000 in insurance. Suppose he carries only $6,000 in insurance and suffers a $4,000 loss. Since he is carrying only 75% of the amount of insurance he agreed to carry, he then becomes a “coinsurer” to the extent of 25% of the loss, the company paying only 75% ($3,000) of the $4,000 loss. Read this again. You should be able to understand it on the fourth or fifth reading.

COINSURER

An insured or an insurance company required to share in a loss under a conisurance agreement. (See Coinsurance.)

COLLISION (AUTOMOBILE)

The colliding of the automobile, stationary or moving, with any other object, stationary or moving. Term also includes overturning ("upset") of the insured automobile whether or not any other object is involved. (See Physical Damage-Automobile.)

COLLUSION

Joint action by two or more individuals to commit a fraud. (See Fraud.)

COMBINATION POLICY

A policy which provides protection against two or more hazards of both property and liability. Dates back to the days when companies were chartered to write only property or liability (Casualty) lines but not both. Homeowners form is an example of a present day "combination policy." (See Package Policy.)

COMBINED ADDITIONAL COVERAGE(C.A.C.)

An automobile physical damage coverage which may be written only in connection with Fire or Fire Theft coverage, and then only for a like amount. Vandalism and Malicious Mischief (subject to a $25 Deductible) may be written only as an addition to, and in connection with Combined Additional Coverage. As compared to (see) Comprehensive Coverage, which is an all-risk type of insurance, Combined Additional Coverage protects only from specified perils of Windstorm, Hail, Earthquake, Explosion, Riot or Civil Commotion, or the forced landing of any aircraft or of its parts or equipment, Flood or Rising Waters, External Discharge or Leakage of Water except loss resulting from rain, snow or sleet whether driven by a wind or not.

COMBINED PHYSICAL DAMAGE COVERAGE

A new automobile physical damage coverage designed to include all perils currently under comprehensive and collision for commercial automobiles. It is aimed at eliminating any confusion which might exist as to whether a loss is covered under comprehensive or collision. The new coverage is available for most commercial auto risks. It is not available for garage dealers because of the special theft, mischief and vandalism deductibles which apply in dealer risks. Obviously, a common deductible must apply equally to both exposures when writing this combined coverage.

COMBUSTION

A chemical change producing heat and light caused spontaneously or from an external source. Fire is always the result of combustion. But combustion does not always cause fire.

COMMERCIAL LINES

A general reference to all of the various forms of insurance designed for the protection of business operations and property exposures, as opposed to those of individuals. (See Persona/Lines.)

COMMERCIAL VEHICLE

A vehicle, generally of the truck type, which does not qualify under the definition of (see) ‘Private Passenger Automobile,’ used for commercial purposes. This classification includes all types of buses, liveries, taxicabs, ambulances, law enforcement vehicles and special or mobile land vehicles (e.g. bulldozers, power shovels, road rollers and graders, farm equipment, etc.).

COMMISSION

The percentage of the total premium which is retained by the agent or broker in payment for his services. Return Commission: That portion of the Return Premium (see Premium) based on the original rate of Commission which the agent must contrib ute in the event of cancellation of reduction in the rate or amount of insurance. Earned Commission: An agent’s commission is a percentage of the premium earned under a given policy. If a policy runs its full term, then his commission is a percentage of the full premium for the period. If the policy is cancelled during its term, then his commission is a percentage of the premium which is earned while the policy is in force. In short, Earned Commission is the difference between Full Commission and Return Commission. (See Commission.) Contingent Commission: See Contingent Commission.

COMMISSIONER OF INSURANCE

The state official who is charged with the responsibility of enforcing state insurance laws. Known in some states as Director or Superintendent of Insurance.

COMMON CARRIER

A trucking concern which carries merchandise for a fee, and which cannot, under the law, refuse to accept shipments from anyone who wishes to use its services. The common carrier may limit the type of merchandise he carries to that which he is especially equipped or accustomed to carry, may refuse to carry certain items such as dangerous materials or perishables, and he may operate within a specifically limited area, but other than these limitations, he must offer his services to the general public. In contrast with a Contract Carrier, whose obligations are limited to those of a bailee (see below), the Common Carrier is responsible for the safety of goods in custody, except when delay or loss is occasioned by Act of God, an enemy nation at war with the carrier’s country, and act of any Civil or Public Authority, negligence on the part of the shipper or inherent vice of the goods themselves. If any delay or loss is not caused by any of the above, the Common Carrier is liable. The detailed description of the merchandise to be carried and contract between the shipper and the carrier is known as the “Bill of Lading,” although this, or a receipt or copy of any other agreement is not necessary to make the Common Carrier liable for a loss. A Private or Contract Carrier transports merchandise only for those with whom it has made prior agreements.

COMMON LAW

That part of general law which has gained general acceptance in the United States and Great Britain by reason of custom and usage, and by decisions handed down by courts over the years. Common Law differs from Statutory Law in that the latter has come into existence through enactment into statutes by state and federal legislative bodies.

COMPARATIVE NEGLIGENCE

See Negligence.

COMPENSATION AWARD

An agreed amount to be paid to an injured party, usually periodically over a definite or an indefinite period of time, depending on the nature and extent of the injuries. Payment is usually made in installments, but may sometimes be made in a lump sum. Common in Worker’s Compensation cases. (See also Structured Settlement.)

COMPENSATORY DAMAGES

See Damages.

COMPLETED OPERATIONS COVERAGE

Liability coverage for contractors to cover losses occurring after operations (installations, servicing, etc.) have been completed at the place of occurrence and away form the premises owned or controlled by such contractors. Coverage must be written under a Product Liability form, as it is specifically excluded under the Manufacturer’s and Contractor’s Liability Policy. (See also Product Liability Insurance.)

COMPLETION BOND

A bond required by the bank(or other lender) who supplied a construction mortgage. The bond guarantees that the mortgagor will use money (along with some of his own) for the purpose intended, i.e., the construction of the building or other facility for which the mortgage was given. Differs from "Performance Bond" in that the "Principal" is not necessarily the party doing the construction.

COMPOSITE RATE

A common rate used for a particular insured’s operational exposures, reflecting the variations of insurance hazard. A single rate arrived at based on units of payroll, sales, receipts, inventory, admissions, etc. (See also Average Rate.)

COMPREHENSIVE

The word "Comprehensive" in insurance is used to mean coverage is afforded for all risks of loss within the general scope of the policy except those specifically excluded. To put it another way, a "Comprehensive" policy covers any loss under the Insuring Agreement, except those specifically excluded in the policy.

COMPREHENSIVE COVERAGE (AUTOMOBILE)

Covers any and all physical damage to the insured automobile with the exception of loss caused by collision or upset, mechanical or electrical breakdown, or wear and tear. Any damage or loss (e.g. theft) to the insured automobile except as a result of the hazards specifically named above is covered. Coverage may be written either on a Full or a Deductible basis. See also Combined Additional Coverage; Collision and Physical Damage-Automobile.)

COMPREHENSIVE GENERAL LIABILITY POLICY

A general liability policy which is comprehensive in nature, i.e. covers for loss where no exclusions are specified. Also automatically covers new hazards or locations.

COMPREHENSIVE GLASS POLICY

Although the Standard Glass Policy is generally used to cover plate glass, the Comprehensive Glass Policy may be extended to cover almost every type of glass manufactured. It is also used to cover Residence Glass. Except for Residence Glass and certain large risks, each piece (commonly called "light") must be scheduled. That is each "light" must be described in the policy as to its type, dimensions and position in the building. Even glass signs, lamps and such items as glass bricks may be covered under the Comprehensive Glass Policy. $75 is provided for necessary repairs or replacement of frames, if necessary, at any one location. The policy will also pay for the temporary installation of glass or the boarding up of openings up to $75 for each separate location, with the same amount available for removal of obstructions necessary to replace damaged glass. The usual exclusions are: malicious scratching (malicious damage by acid or chemicals is covered), fire, war, invasion or nuclear energy. (See also Residence Glass Policy, Retention Fifty Percent and Two-Plate (Rider) Agreement.)

COMPREHENSIVE PERSONAL LIABILITY POLICY

This coverage is now rarely written as a separate policy as it is now largely incorporated in the Homeowners forms, and was designed for risks now eligible for the latter form. Comprehensive Personal Liability protects the insured or spouse, resident relatives of either, and any other person under 21 in the care of the insured both on the insured premises and elsewhere for liability for bodily injury and property damage. With respect to those coverages, it is a "single limit" policy. Premises Medical Payments is also afforded without regard to liability of the insured, but does not extend to those persons listed with the insured above, and is restricted to those injuries of an accidental nature. (See Single Limit Policy.) Coverage extends beyond the insured premises to personal acts anywhere, and to premises in which the insured is temporarily residing. As with all liability policies, there are restrictions as well as optional extensions of coverage. Only a study of the contract will afford all of the "ifs," "ands" and "buts."

COMPREHENSIVE POLICY

Policy providing broad coverage. So broad, in fact, that it means, in effect: "This policy covers all losses except those specifically excluded." Standard policies, in contrast, name the specific hazards insured against, and exclude all others not mentioned.

COMPULSORY INSURANCE

Any type of insurance which is required by law, and for which penalties are levied for non-compliance. (Compare Mandatory.)

CONCEALMENT

Deliberate failure to disclose a material fact or facts (whether asked or not) when obtaining insurance or in the filing of a claim. A material fact is one which would have a bearing on a company’s decision to accept or decline the writing of an insurance policy or paying a claim.

CONCOMITANT

Existing or occurring together; refers to coincidence in time and events so clearly related that one seems attendant on the other(s).

CONCURRENT INSURANCE

Insurance under two or more policies which are identical in terms, but may vary in amounts or date. Non-Concurrent Insurance is also insurance under two or more policies which may (or may not) differ in amounts or dates, but also differ in other features as well, principally in forms or coverages. Non-Concurrency can create serious difficulties in the settlement of losses, and should be avoided.

CONDITION

That part of an insurance policy which sets forth the terms of agreement under which insurance is undertaken. Usually spells out the duties and responsibilities of the insured and/or the insurance company with regard to the insurance policy. Limits of liability; insured’s duties after loss, suit against company, bankruptcy or any insured liberalization clause, waiver of policy conditions. These are examples of "Conditions" found in an insurance policy. A Representation is a statement of fact or condition made by or for an insured which is made a part of the policy and which, even though in error or untrue, will not jeopardize coverage unless it is material. (See also Warranty.)

CONDOMINIUM

A multiple unit building or group of buildings featuring individual ownership of single units, wherein each owner has, in addition, a proportional interest in the balance of the total property owned jointly by all the unit owners.

CONFLAGRATION

Widespread destructive burning characterized by great intensity.

CONSEQUENTIAL LOSS OR DAMAGE

Indirect loss or damage resulting from fire or other peril covered by the policy. Example: Windstorm blows tree down damaging electrical wires running to a food freezer, causing food spoilage. Business Interruption Insurance covers "consequential" losses such as "Extra Expenses," "Rental Value," "Profits and Commissions" and "Tuition Fees," among others. This type of insurance contrasts with the "Direct Loss or Damage" forms.

CONSIDERATION

1.) Term sometimes used in place of ‘Premium.' 2.) Payment of money, giving of service(s) or property or anything else of value or a combination of these by one party to another, in return for something else of value agreed to by the other party or parties. (See also Contract, Party.)

CONSIGNMENT

The physical transfer of one’s personal property to another primarily for the purpose of selling the property, but sometimes for storage or shipping.

CONSORTIUM, INSURANCE

See Insurance Consortium.

CONSORTIUM, LOSS OF

Loss of companionship and support of a spouse provided by marriage.

CONSTRUCTIVE TOTAL LOSS

When the cost to repair or salvage damaged property equals or exceeds the total value of the property at the time of the loss (even though the loss is not "total" as we usually understand it) it is, in effect "total," and is called a "Constructive Total Loss."

CONTAMINATION, RADIOACTIVE

See Radioactive Contamination.

CONTINGENT COMMISSION

A commission, in addition to the commission, which an agent receives as a result of an agreement with the company as a reward for a lower than average loss ration.

CONTINGENT LIABILITY

Liability resulting from negligence of persons (not employees) engaged by the insured to perform certain jobs. (See Contractor’s Protective Liability.)

CONTRACT

Term often used to mean an insurance policy. In general, a Contract is a written agreement between one who offers something (a service, indemnification, property, etc.) and one who accepts, giving Consideration (payment of money, giving of service or property, something else of value, or a combination of any of these) to the first party (the Offerer). In order to meet the necessary requirements of a legal contract the agreement must meet five conditions - It must be: 1.) in legal form; 2.) entered into by legally competent parties; 3.) based on a consideration (see above); 4.) not against the public good or against the law; and 5.) mutually acceptable, each party being fully aware of all relevant facts known to the other party.

CONTRACT BOND

A bond guaranteeing satisfactory performance of a contractor of a construction contract, and payment of all labor and materials in connection with the specified project. (See discussion under Bond.)

CONTRACT CARRIER

See Common Carrier.

CONTRACTOR’S PROTECTIVE LIABILITY

Covers Contractor’s liability for damages or injuries sustained by any person (other than his employees) resulting from construction or alteration work done by any subcontractors. (See Contingent Liability.)

CONTRACTUAL LIABILITY INSURANCE

Protects manufacturers and! or contractors who are required to assume liability under contract, such as a contractor who assumes liability for injury or damages resulting from materials or equipment on streets or sidewalks during the course of construction. (See also Hold-Harmless Agreement.)

CONTRIBUTION

See Apportionment.

CONTRIBUTION, REDUCED RATE

See Coinsurance.

CONTRIBUTORY NEGLIGENCE

See Negligence.

CONVERSION

Essentially the same as (see) Embezzlement except that Conversion generally refers to property rather than money. Term is also used in Life Insurance to denote a change in one form of life protection to another.

CONVEYANCE

In business transactions, a conveyance is a transfer of title to property of one to another.

CORPORATION

A legal entity made up of individuals which is granted a charter by the state. Each member becomes a "shareholder" to the extent of his investment, and his personal liability for the debts and obligations of the corporation is limited to the degree of his investment. (See Entity, Partnership.)

CORRECTION NOTICE

See Criticism.

COST, ACQUISITION

See Acquisition Cost.

COST, INSURANCE AND FREIGHT (C.L.F.)

A condition of a sales agreement of merchandise wherein the purchaser agrees to pay the cost, insurance and freight charges in connection with the shipping of the goods to their destination.

COUNTERSIGNANTURE

Signature by an agent resident in and licensed by the state in which a risk is located.

COVER NOTE

Similar to a Binder issued by a reinsurance company in favor of a Primary Carrier as evidence of reinsurance.

COVERAGE

Insurance, an insurance policy, or the extent of protection in type, limit or amount afforded by an insurance policy. Sometimes called "Cover."

COVERAGE, EXTENDED

See Extended Coverage.

COVERED LOSS

A loss for which an applicable policy provides indemnification. (See Indemnity.)

CREDIT FOR EXISTING INSURANCE ENDORSEMENT

See "Pick-Up" Endorsement.

CREDIT REPORT

A report containing information about an individual (his personal habits, credit rating, family and job situation, etc.) which enables an underwriter to evaluate him as an insurance risk. Inspection Report (a report on the physical condition, “housekeeping,” neighborhood, protection and construction of the property) and Mercantile Report (on the moral and financial status, usually of a business organization) are terms which in recent years have come to be used interchangeably with Credit Report.

CRIMINAL ACTION

A crime is (broadly speaking) an act or an omission in violation of the law. A criminal action is brought against the person accused of a crime which does not only damage or injure another person (See “Civil Action”) but is of such a nature that it is a crime against society as a whole, the public in general or, as we refer to it, "The State." In the event, it is the state which brings action against the accused, who, if found guilty, may be punished by death, imprisonment or any other penalty the court see fit. (See also Civil Action, Felony, and Misdemeanor.) Also, see a lawyer.

CRITICISM

A notice of correction in rules, rates, classification and /or forms given by a rating office. (See Stamping Office.)

CURRENT, ACCOUNT

See Account Current.

CURTAIN WALL

A non load-bearing wall in a building of concrete and/or steel, whose purpose is to divide areas within the building or to afford protection against the weather.