G

A|B|C|D|E|F|G|H|I|J|K|L|M|N|O|P|R|S|T|U|V|W

GAP OR BUFFER LAYER LIABILITY

In some cases of (see) Umbrella Liability, the primary carrier is unwilling to write underlying limits adequate to meet the limits provided by the Umbrella coverage, thereby leaving a "gap" in coverage between the upper limits the primary carrier is willing to provide and the Umbrella minimum requirements. It is possible to procure in the specialty market "buffer layer" the gap created by this situation--sometimes akin to the procedure described under "Retrocession," except that the third "Layer" of the cake is placed between the bottom and the top layers.

GARAGE KEEPERS’ LEGAL LIABILITY

A commercial automobile form which covers the legal liability of a garage keeper as bailee for damage done to customers’ cars while in his custody. Since it is a legal liability policy, it is designed to protect the insured only for those losses for which the law would hold him responsible. In actual practice, however, the courts have tended to hold him responsible for almost all types of losses to customers’ cars. An application does not usually bring a smile to an underwriter’s otherwise happy countenance.

GARAGE LIABILITY

A commercial automobile form designed to cover the legal liability of automobile dealers, repair shops, service stations, etc., for property damage and/or bodily injury losses arising out of business operations. Coverage excludes injury to employees, damage to owned or customer’s cars or other property while in the care, custody and control of the insured. In general, the policy covers premises liability, product liability, (including completed operations and liability for defective workmanship if resulting damage occurs after the property is no longer in charge of the insured.)

GARNISHMENT

An order by the court to one who has possession of property and/or money (the "Garnishee") of a debtor against whom a judgment has been obtained, directing the garnishee not to transfer the property or money to the debtor. An employer, for example, is the garnishee of an employee whose salary has been attached.

GENERAL AGENT

An agent who has an exclusive contract with a company covering a specific territory, and who, to all intents and purposes, acts as a branch office for the company is called a "General Agent." He supervises other agents (called Sub-Agents, Solicitors, Producers or Brokers) and may not solicit business directly from the public. Also, sometimes refers to an agent who has a liberal form of commission contract with the company and does solicit direct business. (See also Agent, Special Agent, Local Agent and State Agent.)

GENERAL AVERAGE

The principal in maritime law that all interests (hull owners, cargo owners, charterees and shippers) share in any sacrifice for the good of all. A good example would be the jettisoning of a part of the cargo in order to save the ship and the balance of the cargo. Particular Average refers to loss which affects only a particular interest, as opposed to "General Average" in which all interests are involved.

GENERAL CASUALTY INSURANCE

Term in general use referring to lines of insurance other than automobile and property insurance. A catch-all definition which includes many unrelated lines such as Burglary and Robbery, miscellaneous Liability, Glass, Boiler and Machinery Worker’s Compensation, Bonds, etc.

GENERAL LIABILITY

See Comprehensive General Liability.

GLASS COVERAGE, COMPREHENSIVE

See Comprehensive Glass Coverage.

GLASS COVERAGE, RESIDENCE

See Residence Glass Coverage.

GOOD STUDENT DISCOUNT

Many companies allow a discount on automobile insurance for students who maintain high scholastic grades, since there appears to be a high correlation between academic achievement and good driving experience.

GRACE PERIOD

The period of time, after the date a premium is due, during which a policy will continue in force. Usually used in life insurance, meaning a period of time (varying from 28 to 31 days) following the premium due date during which the policy remains in force even though the premium has not been paid.

GRADING, TOWN

See Town Grading.

GROSS EARNINGS FORM

A Form of business interruption where the premium is based on the insured’s total sales less cost of merchandise or service ("Gross Earnings"). This very simple form is popular with small mercantile and non-manufacturing (service) businesses.

GROSS LINE

The amount of insurance a company has on a single risk. The "Net Line" is the same thing, with the amount of reinsurance, if any, deducted.

GROSS PREMIUM

See Premium.

GUARANTY FUND

A state fund maintained through assessments (contributions) by insurance companies which are set aside to satisfy claimants and insureds of an insurance company which may become insolvent. The fund may be set up in advance to be prepared for any insolvency, or it may be created by assessment of the other companies after an insolvency has occurred.

GUEST LAWS

Legislated in about half the states, "Guest Laws" restrict the right of recovery for injury sustained by guests (passengers in the vehicle other than the driver) in automobiles by placing upon the guest the burden of proof of “Gross Negligence” of the driver. Some statutes even require that proof of gross negligence include “willful and wanton misconduct” by the driver. The operation of “Guest Laws” can be affected by the relationship between the owner or driver and the passenger: was the joint ownership or right of control of the vehicle; was money or other benefit a consideration; did an employer-employee or principal-agent exist--these relationships have a bearing on the application of Guest Laws.

GUIDING PRINCIPLES

A set of rules of recommended procedures to be used in the adjustment of claims involving overlapping casualty, fire and/or inland marine policies. Prior to the establishment of these “Guiding Principles.” the insured could find himself waiting for his claim to be paid while the insurance companies involved argued as to their participation in the loss and the apportionment, if any. With the advent of combination multi-peril policies (Homeowners, for example) where all coverages are written by one company in the same policy, there are fewer problems in this area, but they do occur, and they can be serious.