Glossary

The language of insurance can be quite complex and confusing. Below are some commonly used insurance terms and their meanings. Insurance professionals with whom you may come into contact should be prepared to explain these terms. If you don't understand, ask!

This information is for educational purposes only and should not be relied upon to form professional opinions on coverage issues.

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

E

Earned Premium

1) That portion of premium earned or charged for the period of time a policy remained effective. For example, an annual policy paid for in advance would be one twelfth "earned" at the end of the first full month of its term.

2) An amount calculated by taking earned premium reserve at beginning of period plus premium written during period, less unearned premium reserve at end of period.

3) Premium actually exposed to loss.

Earthquake Insurance*

Coverage for damage caused by an earthquake as defined in the contract.

Easement

Right of way, or similar right, over another's land, e.g., the owner of land may grant passage over a certain portion of that land to another who may want to access another property or lake.

Effective Date*

The date on which an insurance policy or bond goes into effect, and from which protection is furnished.

Embezzlement*

The fraudulent use of money or property that has been entrusted to one's care.

Employer's Liability Insurance

Protects an employer against injuries sustained by employees that fall under common-law liability. This should not be confused with workers' compensation liability, which is liability as defined by workers' compensation law.

Endorsement

An amendment added to a written document, particularly an agreement between parties, altering its provisions.

Equipment

Material for use on one machine, one vehicle, one unit. For example, a car comes "equipped" with five tires. Tires other than those on the car are not "equipment" of the car. They are instead the dealer's "stock of tires." Equipment also includes contractor's equipment, e.g., backhoe, bulldozer.

Equipment Floater Insurance

A form of inland marine insurance, often on a broad form basis, covering various kinds of equipment. The most common class is contractor's equipment.

Equivalent Materials

Materials or equipment that a contractor substitutes for those defined in contract documents, claiming that materials are equal to or better than those defined. A contractor must provide sufficient proof to engineer, who decides if materials are equal or better.

Errors and Omissions Insurance

1) Insurance covering the legal liability of professionals not usually involved with the care of the human body such as architects, engineers, accountants.

2) A type of insurance which will step in to take the place of insurance that has not been effected due to a mistake or forgetfulness on the part of the policyholder. Issued to risks such as mortgage concerns, professionals, semi professionals or others engaged in the routine insurance of many properties.

3) A clause in certain policies whereby the insurer agrees to waive its defences when an honest error has been committed, provided it is corrected when discovered.

See also Malpractice Insurance and Professional Liability Insurance.

Estate

1) In law, one of the various interests in land.

2) The net worth of an individual's worldly goods.

Estimated Premium

A tentative premium set in the anticipation of being approximately correct but which may be increased or decreased when the final premium calculation is made.

Estimator

A person who appraises value, worth or cost of items, especially construction costs.

Examiner

1) One who administers an examination.

2) Insurance company underwriter who studies individual risks for acceptability.

3) Insurance company person who receives reports of the various claims for approval of payment.

4) Government official who attends to check the records of an insurance company.

Exceptions

Differences listed in a policy which amend the standard declarations so as to provide the required coverage.

Excess Insurance

Insurance which does not participate until all other similar insurance on the same subject is exhausted, or until the loss exceeds a previously agreed upon amount. Where there are two policies on a risk and both contain a provision that they are "excess to all other insurance," the problem is resolved by the general "guiding principles." This is usually interpreted so that each insurer contributes pro rata to the loss.

Exclusion

Risks, perils or properties defined in the policy as not covered.

Exculpatory Clause

An article in a contract, relieving one party of blame or negligence for his acts.

Exhibitions Insurance

Insurance against risks particularly pertinent to exhibitions.

Expiration*

The date upon which a policy will end.

Expiration Notice

Notice sent by the company to the broker/agent or one sent by the broker/agent to the client that a policy is due to expire.

Expiry

End of the policy period.

Explosion

A rupture of a pressure vessel of some kind due to excessive internal pressure (usually accompanied by a loud noise).

Explosion Insurance

Protection for both the article which explodes and the property of the insured damaged by the explosion. Also covered is personal injury suffered by others for which the insured may be legally liable, arising out of the explosion.

Exposure

The hazard threatening a risk because of external or internal physical conditions.

Extended Coverage Insurance*

Protection for the insured against loss or damage of his property caused by windstorm, hail, smoke, explosion, riot, riot attending a strike, civil commotion, vehicle and aircraft. This is provided in conjunction with the fire insurance policy.

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