INSURANCE POLICY

insurance policy. 1. A contract of insurance. 2. A document detailing such a contract. — Often shortened to policy. — Also termed policy of insurance; contract of insurance.

accident policy.A type of business or personal policy that insures against loss resulting

directly from accidental bodily injuries sustained during the policy term. [Cases: Insurance 1012,

1716. C.J.S. Insurance §§ 4, 254.]

assessable policy. 1. A policy under which a policyholder may be held liable for losses of the insurance company beyond its reserves. — Also termed assessable insurance. 2. See assessable insurance (1) under INSURANCE. bailee policy.A floating policy that covers goods in a bailee’s possession but does not

particularly describe the covered goods.

basic-form policy.A policy that offers limited coverage against loss. • A basic-form policy generally covers damages from fire, windstorm, explosion, riot, aircraft, vehicles, theft, or vandalism. — Also termed limited policy; specific policy.

blanket policy.An agreement to indemnify all property, regardless of location. — Also termed

compound policy.

block policy.An all-risk policy that covers groups of property (such as property held in bailment or a business’s merchandise) against most perils. See all-risk insurance under INSURANCE.

broad-form policy.A policy that offers broad protection with few limitations. • This policy

offers greater coverage than a basic-form policy, but less than an open-perils policy.

claims-made policy.An agreement to indemnify against all claims made during a specified period, regardless of when the incidents that gave rise to the claims occurred. — Also termed discovery policy. [Cases: Insurance 2266. C.J.S. Insurance § 430.]

closed policy.An insurance policy whose terms cannot be changed. • A fraternal benefit

society is not permitted to write closed policies. — Also termed closed insurance contract.

commercial general-liability policy.A comprehensive policy that covers most commercial risks, liabilities, and causes of loss. • This type of policy covers both business losses and situations in which a business is liable to a third party for personal injury or property damage. First introduced in 1986, this policy has largely replaced comprehensive general-liability policies. — Abbr. CGL policy. Cf. comprehensive general-liability policy.

completed-operations policy.A policy usu. purchased by a building contractor to cover

accidents arising out of a job or an operation that the contractor has completed. [Cases: Insurance 2296. C.J.S. Insurance §§ 431, 950, 952–953, 971–972, 974–976, 985.]

compound policy.See blanket policy.

comprehensive general-liability policy.A broad-coverage commercial insurance policy covering a variety of general risks, esp. bodily injury and property damage to a third party for which the business entity is liable. • This policy was first offered in 1940. It has largely been replaced by the commercial-general liability policy. — Also termed CGL policy; general-liability

policy. Cf. commercial general-liability policy.

concurrent policy.One of two or more insurance policies that cover the same risk. • Concurrent insurance policies are stated in almost identical terms so that liability can be apportioned between the insurers. [Cases: Insurance 2107.] continuous policy.See perpetual policy.

corrected policy.A policy issued after a redetermination of risk to correct a misstatement in

the original policy.

deferred-dividend insurance policy.Hist. A life insurance policy that accumulated a fixed percentage of the insurer’s surplus profits, payable as a lump sum on a certain date or at the insured’s death, whichever came first.

discovery policy.See claims-made policy.

drummer floater policy.Hist. A policy that covered the goods carried by a commercial

salesperson while traveling.

endowment policy.A life-insurance policy payable at the end of a specified period, if the insured survives that period, or upon the insured’s death if death occurs before the end of the period.

excess policy.See excess insurance under INSURANCE.

extended policy.A policy that remains in effect beyond the time when premiums are no longer

paid.

flier policy.Hist. A policy issued at a very low rate near the end of the year for the purpose of

swelling the insurance agent’s annual-sales figures. — Also spelled flyer policy.

floating policy.An insurance policy covering property that frequently changes in quantity or

location, such as jewelry. — Also termed running policy; blanket policy.

following-form policy.An insurance policy that adopts the terms and conditions of another

insurance policy. [Cases: Insurance 3615(1).] gambling policy.See wager policy. graveyard insurance.See wager policy.

group policy.See master policy.

homeowner’s policy.A multiperil policy providing coverage for a variety of risks, including

loss by fire, water, burglary, and the homeowner’s negligent conduct.

incontestable policy.A policy containing a provision that prohibits the insurer from contesting

or canceling the policy on the basis of statements made in the application. [Cases: Insurance

3121. C.J.S. Insurance § 1636.] interest policy.A policy whose terms indicate that the insured has an interest in the subject

matter of the insurance. Cf. wager policy.

joint life policy.A life-insurance policy that matures and becomes due upon the death of any

of those jointly insured.

lapsed policy. 1. An insurance policy on which there has been a default in premium payments. [Cases: Insurance 2039.] 2. An insurance policy that, because of statutory provisions, remains in force after a default in premium payments. • Statutes normally provide a 30- or 31-day grace period after nonpayment of premiums. [Cases: Insurance 2018.]

level-rate legal-reserve policy.A policy that seeks to build a reserve equal to the policy’s face

value by the end of the insured’s life.

life policy.A life-insurance policy that requires lifetime annual fixed premiums and that becomes payable only on the death of the insured. — Also termed regular life policy. [Cases:

Insurance 1011, 1716. C.J.S. Insurance §§ 10–14, 254.]

limited policy. 1. An insurance policy that specifically excludes certain classes or types of

loss. 2. See basic-form policy.

manuscript policy.An insurance policy containing nonstandard provisions that have been

negotiated between the insurer and the insured.

master policy.An insurance policy that covers multiple insureds under a group-insurance plan.

— Also termed group policy. See group insurance under INSURANCE.

mixed policy.Marine insurance. A policy combining aspects of both a voyage policy and a

time policy.

multiperil policy.An insurance policy that covers several types of losses, such as a homeowner’s policy that covers losses from fire, theft, and personal injury. — Also termed named-perils policy.

nonmedical policy.An insurance policy issued without a prior medical examination of the

applicant.

occurrence policy.An agreement to indemnify for any loss from an event that occurs within the policy period, regardless of when the claim is made. [Cases: Insurance 2264. C.J.S.

Insurance § 429.]

open-perils policy.A property insurance policy covering all risks against loss except those

specifically excluded from coverage.

open policy.See unvalued policy.

package policy.An insurance policy providing protection against multiple perils and losses of

both the insured and third parties. • A homeowner’s policy is usu. a package policy.

paid-up policy.A policy that remains in effect after premiums are no longer due.

participating policy.A policy that allows the holder a right to dividends or rebates from future

premiums. • This type of policy is issued by a mutual company. permanent policy.A renewable policy that is effective for a specified period and is terminable

by either the insurer or the insured after giving express notice.

perpetual policy.An insurance policy that remains effective without renewal until one of the

parties terminates it according to its terms. — Also termed continuous policy.

regular life policy.See life policy. running policy.See floating policy. specific policy.See basic-form policy.

standard policy. 1. An insurance policy providing insurance that is recommended or required by state law, usu. regulated by a state agency. [Cases: Insurance 1775. C.J.S. Insurance § 297.] 2. An insurance policy that contains standard terms used for similar insurance policies nationwide, usu. drafted by an insurance industrial association such as Insurance Services Office.

survivorship policy.A joint life policy that is payable after all the insureds have died.

term policy.A life-insurance policy that gives protection for a specified period, but that does

not have a cash value or reserve value.

time policy.An insurance policy that is effective only during a specified period.

tontine policy (tahn-teen or tahn-teen). An insurance policy in which a group of participants share advantages so that upon the default or death of any participant, his or her advantages are distributed among the remaining participants until only one remains, whereupon the whole goes to that sole participant. • Under the tontine plan of insurance, no accumulation or earnings are credited to the policy unless it remains in force for the tontine period of a specified number of years. Thus, those who survive the period and keep their policies in force share in the accumulated funds, and those who die or permit their policies to lapse during the period do not. This type of policy takes its name from Lorenzo Tonti, an Italian who invented it in the 17th century. Today, newer and more ingenious forms of insurance have largely made tontine policies defunct. See

TONTINE. [Cases: Insurance 2441.]

umbrella policy.An insurance policy covering losses that exceed the basic or usual limits of liability provided by other policies. See umbrella insurance under INSURANCE. [Cases:

Insurance 2110, 2394.]

unvalued policy.A policy that does not state a value of the insured property but that, upon loss,

requires proof of the property’s worth. — Also termed open policy.

valued policy.An insurance policy in which the sum to be paid when a loss occurs is fixed by the terms of the contract. • The value agreed on is conclusive for a total loss and provides a basis for determining recovery in cases of partial loss. This value is in the nature of liquidated damages.

[Cases: Insurance 2171. C.J.S. Insurance §§ 1108–1109, 1204.] voyage policy.A marine-insurance policy that insures a vessel or its cargo during a specified

voyage.

wager policy.An insurance policy issued to a person who is shown to have no insurable interest in the person or property covered by the policy. • Wager policies are illegal in most states. — Also termed gambling policy; graveyard insurance. See insurable interest under INTEREST(2). Cf. interest policy; viatical settlement under SETTLEMENT(3). [Cases: Insurance 1784.]

[Blacks Law 8th]