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

P

PACICC*

See Property and Casualty Insurance Compensation Corporation.

P&C insurance*

See Property and casualty insurance.

Package Policy

Any insurance policy which covers two or more lines or types of insurance in the same policy.

Pain and Suffering*

A non-economic loss for which recovery may be available against the wrongdoer in a lawsuit.

Pair & Set Clause

Establishes that loss or damage to one of a pair or set of individual items does not represent the loss of the pair or set.

Partial Loss

A loss covered by an insurance policy where the property or the premises are not completely destroyed or rendered completely worthless.

Penalty

Liability limit on a fidelity or surety bond.

Per Annum

For each year.

Per Capita

Per head or per person.

Peril*

This is the cause of loss or damage. A homeowner’s policy, for example, insures against perils like windstorms, fire and theft.

Period of Indemnity

Used in business interruption and disability insurance to define the length of time for which indemnity is payable.

Perjury

Giving false evidence or information while under oath.

Permission Granted Clause

Provision in most property insurance policies on real property that permits a policyholder to use insured premises for normal purposes related to occupancy.

Personal Articles Floater*

A personal articles floater provides all-risk coverage, subject to reasonable exclusions, for valuable items such as furs, jewellery, cameras, silverware, etc. The items are generally listed by description and value. This should not be confused with a personal effects/property floater.

Personal Auto Policy

Insurance policy issued to individuals covering risks arising out of the ownership or operation of a licensed automobile.

Personal Effects/Property Floater*

Coverage for personal property, anywhere it may be in the world. Typically, this type of floater is issued in one of two forms, all-risk (or broad) or specified perils.

Personal Injury*

An injury, other than physical, arising out of false arrest or detention, malicious prosecution, wrongful entry or eviction, libel or slander, or violation of a person's right to privacy.

Personal Injury Liability

Injury other than bodily injury arising out of defined causes which usually include false arrest or detention, malicious prosecution, wrongful entry or eviction, libel or slander or violation of a person's right to privacy other than in the course of advertising, broadcasting, television, publishing.

Personal Lines Insurance*

Home or auto insurance for individuals, as distinguished from commercial lines insurance for businesses.

Personal Property*

Possessions owned by an individual other than real estate or buildings (not attached to the land). Often used to refer to property in a Homeowner's policy.

Personal Property Insurance*

Home insurance covers the contents of a home and other personal property that the named insured and members of the household own, wear or use (including clothing, cameras, furniture, etc.) while on the premises. It may even cover personal property of others (excluding roomers or boarders who are not related to the insured) that is not otherwise insured. There will normally be coverage for personal property while it is temporarily away from the home anywhere in the world (see also "Personal effects/property floater"). Personal property not normally kept at home is not covered. Personal property in a warehouse is usually covered against theft without time limit, but other perils may not be covered, or may be covered only up to 30 days.

Personal Property Insurance Coverage Limitations*

The maximum amount a policy will pay, either overall or under a particular coverage.

Personal Property Floater*

See Floater

Personal Theft Insurance

Theft coverage on personal property. Most often part of a Homeowners contract.

Physical Damage Coverage (Automobile) *

The section of an automobile policy that provides cover for damage to the insured vehicle. It may cover all perils, collision or upset, all perils other than collision or upset (comprehensive) or specified perils.

Plaintiff*

The person who initiates a lawsuit. Also called a claimant.

Policy

Legally binding contract effecting insurance or certificates thereof, including all clauses, riders, endorsements and renewals.

Policy Conditions

Provisions which state the rights and duties of the insured or insurer.

Policy Expiration Date *

The date when an insurance policy expires. This date can be found on the current Declaration (or "Dec") page, insurance identification card, or recent cancellation notice.

Policy Fee*

An additional charge placed on the initial premium to reflect the cost of issuing a policy, establishing records and other expenses.

Policy Limit*

The maximum amount an insurer will pay under a policy, either overall or under a particular coverage.

Policy Period

Duration of policy, most often one year in property/casualty insurance.

Policy Territory*

Geographic area in which the damage or injury must occur for coverage to apply.

Policy Year

Period between anniversary dates.

Policyholder*

Same as Insured.

Pollution Exclusion

Standard general liability policies include an exclusion for loss arising out of pollution. For certain exposures this exclusion may be modified. e.g., "sudden and accidental" pollution arising from a fire.

Pool*

A group of insurers or reinsurers who insure particular types of risks. Premiums, losses and expenses are shared in agreed-upon amounts.

Precedent (Legal)

A previous common law decision used in considering a subsequent legal case.

Preliminary Proofs of Loss

A preliminary statement of the particulars of a loss which the insured submits to the insurer.

Premises

Building including the land immediately surrounding it and belonging to it.

Premium*

An insurance premium is the money the policyholder pays to the insurer for financial protection against specific risks for a specific time-span. Unlike the premiums for many forms of life insurance, general insurance premiums are not intended to produce a reward other than financial peace of mind.

Prior Insurance

Insurance cover in force before the current insurance.

Private Passenger Vehicle*

A vehicle not used as a commercial vehicle. For example, if a small van is used as a family vehicle, it is considered a private passenger vehicle. However, if this same van is used as a full-time delivery vehicle, it is considered a commercial vehicle.

Producer

Broker or agent who sells insurance.

Product Liability Insurance*

Protects manufacturers' and distributors' exposure to liability for bodily injury or property damage caused by the negligent manufacturing of the product. Also referred to in relation to claims arising out of completed work.

Product Recall Insurance *

Designed for manufacturers, this coverage insures against the unexpected cost of recalling a product from the market due to faulty design, errors in manufacturing, or intentional tampering not caused or known by the insured and that may cause harm to customers.

Professional Liability Insurance

Protects professionals against liability for damages and cost of defense based upon his/her alleged or real professional errors and omissions or mistakes, e.g., architects, engineers, medical malpractice, attorneys.

Proof of Loss*

A formal statement made by a policyholder to the insurance company regarding a claim, specifying its circumstances and the amount of loss, especially in property insurance.

Property and Casualty (or General) Insurance*

This is the branch of the insurance industry that covers home, car and business insurance. (The other branch of the industry is life and health insurance.)

Property and Casualty Insurance Compensation Corporation (PACICC)*

In the unlikely event of the collapse of a home, car or business insurance company in Canada, the industry-funded, non-profit Property and Casualty Insurance Compensation Corporation (PACICC) will respond to claims of policyholders under most policies issued by home, car and business insurance companies. This protection is extended automatically to eligible policies.

Property Damage Liability Insurance

Protection against liability for damage to the property of another including loss of the use of the property.

Property Insurance

Covers an insured's property against damage, destruction or loss by a covered peril.

Pro Rata Cancellation

Cancellation of an insurance policy or bond with the return premium credit being the full proportion of premium for the unexpired term of the policy.

Prorating

The adjustment of policy benefits due to a change of exposure or existence of "other insurance."

Provisions

Statements contained in an insurance policy which explain the benefits, conditions and other features of the insurance contract.

Proximate Cause

Cause of loss or damage. Unbroken chain of cause and effect between the occurrence of an insured peril and damage to property.

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