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SAFE BURGLARY

See Mercantile Safe Burglary.

SAFE DRIVER RATING PLANS

A variety of private passenger automo-bile risks designed to reward operators with clean driving records by affording them lower rates, and to penalize those who have (or develop) a history of accidents and/or violations. Often based on a "point system," the point surcharges depend on the frequency and severity of accidents and/or violations during a specified period of time (usually three or five years) called the "Experience Period." Sometimes called "Careful Driver" or "Merit Rating" plans.

SAFETY ENGINEER

The process by which stored data may be retrieved without having to read all the records that precede it. Magnetic disks make this operation possible; magnetic tape or punch card systems do not.

SAFETY ENGINEER

An individual trained in the field of safety and loss prevention and control who inspects the property and operations of an insured and recommends elimination or reduction of hazardous condition or operations with the purpose of helping to reduce or eliminate the probability of injuries to employees or the public or damage to or loss of property.

SALVAGE

1.) The residual value of property after it has suffered partial damage from fire or other covered peril; 2.) The act of saving and preserving endangered property so as to reduce or eliminate future loss or damage; 3.) Under fidelity, fiduciary, burglary, theft, etc.: the recovery made from the perpetrator or from others; 4.) Ocean Marine: Compensation given in Maritime Law for services and expenses incurred rescuing a vessel, its cargo and/or its passengers; 5.) The property saved.

SALVOR

One who saves or helps to save a vessel and/or cargo at sea; a vessel used in salvage operations. (See Salvage.)

SCHEDULE

A description of items to be specifically insured, including descriptions and values placed on each; the plan or formula which shows the various credit and surcharge factors used in arriving at a rate promulgation. Called "Schedule Rating." (See Promulgate.)

SCHEDULED PROPERTY

Property covered under a policy which is listed and described item by item, with a specific amount of insurance placed on each item. (Contrast to Blanket insurance where a single amount applies to the total of all insured items as a group.)

SEASONAL RISK

A risk which is occupied for only a portion of the year (usually the same period every year) such as a summer cottage or a ski resort. These risks can also be mercantile, manufacturing or processing operations such as may be found in the produce or fishing industry.

SEAWORTHINESS

One of the two implied warranties in connection with ocean marine insurance (the other being that the undertaking must be legal). The "Seaworthiness" warrants that the vessel is of proper design and construction and ready for the voyage in every respect: properly manned, fueled, provisioned and otherwise it is equipped for the cargo it has contracted to carry.

SECURITIES

All negotiable instruments (excluding "money" as defined elsewhere) or contracts representing money or property, including stamps in current use, tokens representing specific value, and tickets. (See Negotiable Instruments, Money.)

SECURITIES

All negotiable instruments (excluding "money" as defined elsewhere) or contracts representing money or property, including stamps in current use, tokens representing specific value, and tickets. (See Negotiable Instruments, Money.)

SELF-INSURANCE

A system of self-protection whereby a large firm or organization deposits money in a fund in lieu of insurance premiums against any losses which may occur. The plan can work only if the self-insured has sufficient resources and geographical spread of risks so as to reduce the possibility of a single loss wiping out the fund (and possibly the business itself.)

SELLING PRICE CLAUSE

Endorsement which can be added to a fire policy reimbursing the insured for an amount exceeding the actual cash value of damaged or destroyed goods to include the profit included in the selling price, as opposed to the actual cash value. There are generally two types: one type, available to both mercantile and manufacturing risks, reimburses the insured for merchandise sold but not delivered based on the selling price (which would include actual cash value plus profit); the other form, available only to manufacturers, reimburses the insured for the amount of the loss based on the price for which the manufacturer expected to sell the goods.

SET CLAUSE

See Pair or Set Clause.

SETTLEMENT

An agreement whereby an agreed amount is accepted by the concerned parties as compensation for loss or damage. (See also Arbitration and Structured Settlement.)

SHOCK LOSS

An unusually heavy single loss which is much greater than that anticipated based on experience.

SHORT RATE

A method of weighting the charge for a policy more heavily early during its term as opposed to Pro Rata, where the premium charge is proportional to the period covered. In effect, it is a penalty against the insured for cancelling a policy. Such penalty is higher during the earlier part of the policy period. See Cancellation.

SHORT RATE CANCELLATION

See Cancellation.

SHORT TERM POLICY

Generally, a policy written for a term of less than one year. Seasonal risks, Rail Insurance, Wedding Presents Floater, for examples. In recent years, six-month automobile policies were in common use; but due to high inflation, they have, for the most part, returned to a one year term.

SHORTFALL

A marriage of two perfectly respectable words arranged by some unknown bureaucrat in order to impress his superiors. Term promptly adopted by the latter as their own. Real meaning: "They didn’t give us enough money, so we weren’t (or won’t be) able to finish the job." Also can refer to a situation when an individual, descending stairs in the dark, thinks there are 12 steps when there are really 13.

SIDETRACK AGREEMENT

An agreement by the owner/operator of private property to hold a railroad harmless when it builds a sidetrack or spur on the property to facilitate receiving or shipping of materials. Under such an agreement, the insured (owner and/or tenant of the premises) assumes two risks of loss: one is loss or damage to the property; the other liability for loss or damage to any third party, either of which could be caused by the railroad in operating on the siding. Since he is holding the railroad harmless, he must protect himself. With regard to the first exposure (property), the applicable policy should include the "Railroad Subrogation Waiver Clause" as evidence that the insurance company is waiving its subrogation rights. The insured should also be protected by Sidetrack Liability insurance in orderto protect himself in the event of third party liability assumed by him under the Sidetrack Agreement. (See also Hold-Harmless Agreement.)

SINGLE INTEREST POLICY

A policy designed to cover the interest of the lender only. Used generally in connection with property sold on the installment plan. Also available to the finance company ordealerto cover loss due to wrongful conversion or illegal disposal by the purchaser, such exposures being excluded in the regular forms.

SINGLE LIMIT POLICY

A policy providing a blanket amount to cover Bodily Injury and Property Damage Liability losses with no limit per person and no separate Property Damage Limit. The Single Limit used puts Bodily Injury and Property Damage in one lump sum. (Used in Special Auto Policy and Comprehensive Personal Liability, among others.)

SINKHOLE COLLAPSE

Sudden settlement or collapse of the earth supporting property, resulting from subterranean voids created by the action of water on limestone or similar rock formations. This condition is found primarily in Florida and other southeastern and Gulf states. Resulting damage to buildings is now automatically included in the property policy without additional endorsement or premium in Florida and certain other states, but still may require an endorsement and additional premium in some remaining states.

SLANDER

See Libel.

SMOKE DAMAGE

Damage which is the direct result of sudden, unusual and faulty operation of a heating or cooking unit when the unit is connected to a chimney by a smoke pipe or vent, and only while in or on the premises described in the policy. To be covered, the smoke damage must satisfy all three descriptive terms: sudden, unusual and faulty.

SOFTWARE

A computer term referring to (see) Programs. Without "software," computers would be useless. Refers to everything except the (see) hardware.

SOLE PROPRLETORSHLP

An individual who operates a business and who is the sole owner of all the assets. He may use a Trade Name, but that does not alter the fact that the individual and this very necessary operation are one and the same. They are not separate legal entities. (See Entity.)

SOLICITOR

See General Agent.

SOUND VALUE

The value of property for property insurance purposes. (See Actual Cash Value.)

SOURCE DOCUMENT

Anything that contains information concerning a transaction related to other transactions, written, printed, typed or checked on a form, which must be processed (added, subtracted, multiplied, divided, stored, etc.). Could be cash register tape, invoice, credit memo, return commission debit, items making up an account current or amounts set aside for loss reserves. In bookkeeping, these items are referred to as "Items of Original Entry."

SOUTHERN STANDARD BUILDING CODE

See Beach Plans.

SPECIAL (PACKAGE) AUTO POLICY

A single limit automobile policy (written by different companies under various names), in the past written for a six month period (now mostly for a one year duration), in which all Casualty coverages, Bodily Injury, Property Damage, Medical Ex-penses, Accidental Death and Uninsured Motorist Protection, must be carried. Collision, Comprehensive and Towing and Labor Costs are optional coverages. The policy is somewhat more restrictive (Medical Expenses, for example, is excess over any other applicable insurance) than the Family Automobile policy.

SPECIAL AGENT

A salaried company employee who generally serves as the direct connection between the insurance company and its agents in a given territory. He may also perform other duties such as making adjustments or inspections. He is more frequently referred to in recent years as "Marketing Representative."

SPECIAL BUILDING FORM, DWELLING BUILDINGS

See Dwelling Forms.

SPECIAL HAZARD

An exposure to loss not generally anticipated in the underwriting of a risk, such as "Hazardous Waste," dangerous operations in an adjacent premises, etc.

SPECIAL MULTI-PERIL POLICY (S.M.P.)

A "package" policy, vaguely similar to the homeowners form, designed to cover commercial risks for damage to real and personal property (Section I) and Liability (Section II). Section III, Crime Coverage and Section IV, Boiler and Machinery Coverage are optional. Special Multi-Peril Coverage is divided into seven major categories: 1.) Motel-Hotel Program; 2.) Apartment House Program; 3.) Office Program; 4.) Mercantile Program; 5.) Institutional Program; 6.) Processing or Service Program and 7.) Industrial Program.

SPECIAL RISK

A risk containing special and unusual exposures not usually contemplated in its class. Requires careful underwriting and often is a candidate for (se) Non-Admitted Company consideration.

SPECIFIC INSURANCE

Insurance written to cover separate items, indicating description, location and amount of each, as opposed to "blanket" insurance, which would, for example show one amount to cover "building and contents." The term Specific Insurance is sometimes erroneously used to mean Primary Insurance. Do not make this mis-take. (See Blanket Insurance, Schedule and Scheduled Property.)

SPECIFIC RATES

A property insurance term. Also known as "Schedule Rates," "Published Rates" and "Tariff Rates." (See discussion under Minimum Rates.)

SPECIFIED PERILS

See Named Perils.

SPREAD OF RISK

Related to (see) Law of Large Numbers. Concentration of a large number of property insurance risks in a given location or limited area invites the possibility of catastrophic losses. A geographic "spread of risk" can avoid such situations.

STAFF ADJUSTER

See Independent Adjuster.

STALE CHECK

Since a check is a "bill of exchange" and always payable on demand, it is expected to be cashed, deposited or otherwise negotiated within a reasonable time. There seems to be no hard and fast rule as to when a check becomes "stale." As a general rule, however, a bank will routinely return a check unpaid if it was issued more than six months (some banks 90 days) prior to being presented for payment.

Depreciation Insurance provides the difference between what would be paid by an Actual Cash Value policy and full replacement cost. Replacement Cost coverage is automatically included in Homeowners forms, providing the building at the time of the loss is insured for 80% or more of the full replacement cost, but this feature applies to buildings only, unless replacement cost coverage is attached to the policy. (See Personal Property Replacement Cost.)

STAMPING OFFICE

A central regional office to which agents may send copies of policies ("dailies" or "daily reports") or endorsements for approval or correction. On approval, the policies are "stamped" and sent on to the respective companies. If corrections are necessary, correction notices ("criticisms") are sent back to the agent with or without the policy or endorsement for proper action. When a rate error on a daily report or endorsement results in an error in the total premium of $3.00 or less, a criticism will be sent and the rate corrected on the agent’s and company’s copy, but the premium difference is waived. The $3.00 amount more than likely is higher today.

STAMPS AND STAMP COLLECTIONS

See Philatelic Property.

STANDARD FIRE POLICY (SFP)

This usually refers to the "New York Standard Fire Policy" adopted July 1, 1943. This form, frequently referred to as the "165 line form," covers the basic agreements in the contract, and is, with minor changes, used in almost all states. (See Fire Insurance.)

STANDARD FORM (STANDARD POLICY)

A policy form, with identical wording which is used by a large number of insurance companies and approved by many state regulatory agencies. Examples are (see above) the "Standard Fire Policy," the "Basic Automobile Liability and Physical Damage Policy" and the so-called "76" or newer "84" Homeowners Policy Program.

STANDARD OPEN LOT

Under Commercial Automobile--Dealers’ Theft Coverage, a "Standard Open Lot" is defined as an open parking storage lot enclosed on all sides by a metal cyclone fence or equivalent fence not less than six feet in height; or bounded on one or more sides by the wall or walls of a building, with no unprotected openings, and with the exposed sides of the lot enclosed by a metal cyclone or equivalent fence not less than six feet in height, with openings securely locked when unattended. Broad Form Theft Coverage applies when lot qualifies as above. Non-Standard Open Lot and open lot which does not meet the above qualifications, and $50 (or higher) Deductible Theft Coverage applies.

STANDARD PROVISIONS

Clauses contained in insurance contracts in accordance with certain state statutory requirements; contract provisions in general use by a group of insurers, and approved by state regulatory agencies.

STATE AGENT

An insurance company salaried representative who deals with agents in a given state in the company’s interests. Usually senior to other special agents. (See also Agent, Broker, General Agent, Local Agent and SpecialAgent.)

STATE EXCEPTIONS

Most bureau manuals are designed to cover afield of insurance for a large number of states. Most of an individual manual is taken upwith General Rules: General Instructions, Scope of Coverage, Interests Insured, Definitions, Limits of Liability, Basis of Premium, Minimum Premiums, Classifications, etc. There are however, differences applicable in the different states where conditions warrant variations from the General Rules. These differences are called "Exceptions" and are found following the main section of the manual. Here will also be found Territorial Definitions, rates and premiums applicable to the particular state.

STATED AMOUNT

See Valued Policy.

STATED VALUE

See Valued Policy.

STATEMENT

A request for payment for merchandise sold or services rendered; an itemized summary of invoices charged, credits if any, and balance due. Usually prepared and forwarded at specified intervals.

STATEMENT (INSURANCE)

A written detailed description of an accident or other loss made by an insured, an involved person or witness. Signed statements are important in these cases and should be taken promptly while the facts are fresh in the mind of the maker. Statements are necessary to make a permanent record of events, and aid in the investigation of a loss.

STATUTE

A law enacted by a state legislative body.

STATUTE OF LIMITATIONS

A state law limiting the time within which legal actions of various types may be brought. These time limitations vary with the type of charges and also in different states.

STATUTORY LAW

See Common Law.

STATUTORY VIOLATION

Violation of a statute is prima facie evidence of negligence. Violation of an ordinance or law, even if resulting in bodily injury to another, does not always result in the violator being found negligent.

STOCK

Goods awaiting processing, in the process of manufacture or completed and held for sale, as opposed to (see) "Furniture and Fix-tures."

STOCK INSURANCE COMPANY

An insurance company owned and controlled by stockholders for the purpose of making a profit. A portion of the earnings (after setting aside the reserves required by law) are distributed to the stockholders from time to time in the form of dividends. There is no requirement for a policyholder to be a shareholder, and vice versa. Also known as "Capital Stock Company."STOCK PARTICIPATING COMPANY

A stock insurance company as described above, but which distributes a portion of net earnings to policyholders as well as stockholders in the form of dividends on premiums paid. The stock in this type of company is not generally widely held.

STOP LOSS REINSURANCE

See Excess of Loss Reinsurance, Aggregate

STOREKEEPERS BURGLARY AND ROBBERY POLICY

A limited package burglary and robbery policy designed for the small retail establishment of mercantile risk which covers Burglary of Merchandise, Inside or Outside Robbery, Kidnapping, Safe Burglary, Theft of Night Depository and Damage to Property and Premises. The policy excludes loss by Dishonesty of Employees and by Fire.

STOREKEEPERS LIABILITY POLICY

A package liability policy designed for relatively small retail (not more than 50% of sales by mail order) store, providing, generally speaking, the following coverages: Premises and Operations, Products Completed Operations, Contractual Liability for "incidental contracts": and Independent Contractor (protective) Liability. Elevator Liability and Elevator Collision may be added at the appropriate manual rates and rules.

That liability imposed on an individual who deliberately takes an action (or fails to take an action) in a hazardous situation resulting in injury to another’s person or property.

STRUCTURED SETTLEMENT

A relatively new concept suggested to replace "Lump Sum" awards in cases involving large awards to victims of serious accidents which may entail lifetime disabilities, and require lifetime income. "Lump Sum" settlements may dissipate in a relatively short time due to inexperience of the victim in financial planning (not to mention inflation.) The alternative is a "Structured Settlement" tailored to the needs of the injured party. Such an arrangement could consist of an immediate cash settlement, in addition to monthly maintenance payments for a specified period, plus substantial amounts at intervals of five to ten years.

SUB-AGENT

A licensed agent who operates undeer an agency agreement within and under the jurisdiction of the agency.

SUBJECT RATE

A fire insurance risk, if not clearly qualified for Minimum Rating (a new commercial building, for example), may be bound or written pending specific rating by the bureau having jurisdiction, If a policy is written for such an unrated risk, the rate charged is usually $1.00 (per $100) "subject to revision and approval," and a written application for a rating should accompany the daily report. When the risk has been rated, the promulgated rate shall apply as of the effective date of the policy. The same procedure must be followed when the property is transferred to a new unrated location. The temporary rate used is referred to as Subject Rate, and the premium developed is called the Subject Premium.SUBROGATION

The right reserved by the insurance company to take (at its own option) action to recover a loss paid to a policyholder if the loss was caused by the negligence of a third party. Any recovery made, minus expenses, must be shared proportionately with the insured in the event a deductible is applied to the loss.

SUE AND LABOR CLAUSE

Inland Marine policies: This clause requires the insured to: 1.) Make every effort to preserve injured property from further loss; 2.) to assist in recovering the property. The insured is entitled to reimbursement for any expense he incurs in these efforts.

Ocean Marine: The Sue and Labor expenses involved in preserving a ship or its cargo from further loss or damage from a covered peril can often run into a great amount of money. The extra expenses to save a ship and/or cargo and prevent further damage is provided for in the "Sue and Labor" clause. It must be mentioned that the captain of the ship is considered the agent of the owner and may take any measures he considers necessary to preserve property. Generally speaking, sue and labor expenses (providing they are incurred to preserve the property from a peril insured against) are reimbursed over and above the face amount of the policy.

SUPERSEDED SURETYSHIP RIDER

A form attached to a fidelity bond stating that it will cover a loss which occurred while the previous bond was in force, and which would have been covered had the loss come to light during the (see) Discovery Period.

SUPERVISOR OF INSURANCE

See Commissioner of Insurance.

SURCHARGE

An additional charge made to cover a risk with an exposure greater than that usually anticipated for the class. Usually expressed as a percentage of the rate or premium. (See also Factor and Increment.)SURETY

An inspection report on the characteristics of an insurance risk for an insurance company for the purposes of underwriting or loss prevention or control. The term is also used to describe a detailed study and report of the exposures and insurance recommendations for an individual or organization. A "Marine Survey" is the report of a detailed examination of the condition, seaworthiness and sometimes the market or actual cash value of a yacht, or vessel or other watercraft.

SURETY BOND

A type of bond in which one party (the Surety) guarantees the satisfactory performance of a second party (the Principal) to a third party (the Obligee). (See Bond.)

SURPLUS LINES

See Excess and Surplus Lines.

SUSPENSE (FILE)

A file in which copies or correspondence are placed for checking at a later date to see if requested action has been taken or if correspondence has been answered. (Also known as Diary File.)

SUSPENSION-AUTOMOBILE

When an automobile is put out of operation, insurance coverage (except Comprehensive) may be suspended for all liability and physical damage for a period of not less than 30 consecutive days, and a pro rata return premium be allowed for the period of suspension. Portions of the liability (Medical Payments, Uninsured Motorist, etc.) may be continued in force during the period of suspension at the option of the insured. The reattachment of the suspended portions of insurance at the request of the insured is called Reinstatement. Suspension is not allowed where a certificate has been filed in compliance with any Financial Responsibility law.

SYMBOL

A letter or number assigned to a particular make, model, year, body style and power (usually indicated by cubic displacement and br horsepower) of a private passenger automobile to establish its relative value for the purposes of rating for physical damage insurance.

SYNDICATE

A group of insurers joined together to insure property or a certain category of risks. Lloyd’s of London is a good example of a syndicate.