- The total amount of liability an insurance company financially exposes themselves to when agreeing to an insurance policy.
uncertain risk, threat, jeopardy, insecurity, endangerment
Related Terms and Acronyms
- Aggregate Limit of Liability — Definition,
- A restriction on the amount of liability an insured entity can place on an insurer in a specific time period.
- Hazard — Definition,
- Anything that poses a potential risk of injury or damage.
- Insurance (insur) — Abbreviation,
- An arrangement where one party provides financial protection to another party for specific damages or losses.
- Insurance Policy — Definition,
- A legal contract between an insurer and entity that specifies what the insurer is required to cover and any benefits the insured entity is entitled to.
- Liability — Definition,
- A situation where one party is found to be legally responsible for something.
- Loss Control — Definition,
- The combined efforts undertaken by both the insurer and the insured to lower the risk, frequency and extent of potential losses.
- Loss Ratio — Definition,
- A method of comparing an insurer's losses to premiums earned in a specific period of time.
- Loss Reserve — Definition,
- A reserve of money and liquid assets set aside by an insurer for the payment of claims that have been submitted but have yet to be paid out.
- Losses Incurred — Definition,
- The total net losses of an entity in a year.
- Mortality and Expense Risk Charge — Definition,
- A charge sometimes applied to reimburse an insurer for the risks in a policy.
- Netting — Definition,
- The offsetting with a counter-party of financial obligations or payments one is owed with those one is entitled to receive, thus reducing the costs arising out of payment settlements. Netting is also used as a risk management tool to help counter-parties reduce their exposure to credit risk.
- Occurrence — Definition,
- An event that triggers the need for insurance coverage.
- Peril — Definition,
- Anything that poses a risk of loss, which may or may not be insurable depending on the potential for risk.
- Policy Declarations — Definition,
- The section of the insurance policy that declares the specifics of the insurance policy including premiums, named perils, and policy limits, amongst others.
- Reciprocal Insurance Exchange — Definition,
- A group of individuals, firms and corporations that mutually insure each other.
- Specific Performance — Definition,
- A remedy in a court of equity compelling a defendant to carry out the terms of an agreement or contract. It is available only where the remedy of damages cannot afford adequate relief to the plaintiff.
- Total Loss (Ltot, TL) — Acronym & Abbreviation,
- When as asset is considered to be damaged beyond repair.