Additional Insured: This coverage endorsement is required to gain protection for the County on another party's policy. An additional insured is not a "named insured" or an "additional named insured," both of which denote specific policy definitions and imply specific rights and duties (such as payment of premium).
Aggregate Limit: An aggregate limit is a cumulative limit that applies to all claims within a given period of time, usually within the policy term. For example, if a policy has an occurrence limit of $1,000,000 and an aggregate limit of $1,000,000, the policy could be exhausted by a sequence of losses totaling $1,000,000 or by one big loss of that amount.
Bailee: An individual or company who has temporary possession of property belonging to another. Bailees may be liable to the owners of the property (bailors) for damage or loss of the property while it is in their possession.
Boilerplate: A colloquialism, used to identify standard terms and conditions incorporated in solicitations, contracts, or purchase orders.
Builder's Risk: This coverage is provided to protect against fire and other related peril damage, typically to new buildings or other structures under construction. Coverage can also apply to temporary or permanent buildings, sheds, fences, tool houses, machinery, tools, and supplies used in conjunction with a construction project. This insurance can be purchased by either the Contractor or the County, depending upon the amount of control deemed necessary by the County.
Business Owner's Insurance Policy: A package policy that provides both property and liability coverage for eligible small business.
Certificate of Insurance: Evidence that an insurance policy has been issued, showing the amount and type of insurance provided. The effective date and expiration date of the policy are also shown.
Claims Made Coverage: This liability coverage responds to claims made during the policy term, regardless of when the triggering accident or event happened. This coverage is much more restrictive than Occurrence coverage, and is typically seen in Professional Liability, Pollution Liability, Errors and Omissions, and lines of insurance that are difficult to insure.
Commercial General Liability (CGL) Coverages: Broad insurance coverage for losses for which the insured is legally liable. The following are usually insured by a CGL policy: false arrest, damage to the property of others, defamation of character, invasion of privacy, assault, malicious prosecution, and bodily injury. All professional liability is excluded from a CGL policy.
Contract Bond: This bond assures the faithful performance of a construction contract and guarantees that all labor and material expenses will be paid. In those situations where two bonds are required, a "performance bond" will cover the performance and a "payment bond" covers labor and material costs.
Contractual Liability: Liability assumed by contract beyond what the contractor would normally be liable. A basic liability policy does not provide this coverage. It is an additional coverage for a specific exposure.
Cross Liability: Refers to the loss exposure created when one insured under a policy sues another.
Cross Liability Clause: Allows the County to litigate against the named insured, if necessary.
Defend: The contractor will pay the cost of defense against any claim (for example, legal costs) made against the County as a result of the contractor's activities related to the contract.
Directors and Officers (D&O) Liability Coverage: Coverage designed to protect corporations and their directors and officers against liability exposures they may face. An example may be someone suing the directors for breach of corporate duties.
Employee Dishonesty: Coverage is provided to an employer for loss arising from the dishonest acts of his or her employees. Dishonest acts include theft, fraud, and misappropriation of employer's property, including cash and other negotiable instruments.
Endorsements: Additional documents that modify the agreements in the policy to which they are attached.
Errors & Omissions Coverage: See definition for "Professional Liability."
Extended Reporting Coverage: This coverage (also known as "Tail Coverage") is written in conjunction with claims-made insurance policies and extends the window within which claims can be made. This coverage can be provided by either keeping a claims-made policy in force, or it can be purchased separately by policy endorsement. Extended Reporting Coverage is required to ensure that coverage will be in place in future time periods to protect against today's wrongful professional acts, errors, or omissions.
Fidelity Bond: The County is protected from acts of dishonesty by the contractor and/or their employees if they are covered by this type of bond. The fidelity bond will reimburse the County for any loss incurred due to this kind of performance.
Garagekeeper's Legal Liability: This coverage form is meant to insure vehicles in someone's care, custody, or control. Examples would include parking lot operators, and garages (which should also carry "Garage Liability" for the completed operations exposure arising out of vehicle repair). Limits of liability required should approximate the maximum value of property (vehicles) in the vendor's care, custody, or control at any one point in time.
Hold Harmless: The contractor is agreeing not to seek recourse against the County for any damages, including judgments, settlement of claims, etc. that may arise out of the contractor's activities associated with the contract.
Indemnify: The contractor will be responsible to pay for any loss or damage caused by the contractor or anyone acting on the contractor's behalf, while performing activities pursuant to the contract.
Installation Floater: This coverage is normally purchased to cover materials, tools, and equipment for building projects. Coverage applies in transit, on site, and while partially installed. Typically, this protection is purchased on remodeling and/or minor building addition contracts.
Named Insured: Any person, or organization, or any of its members, specifically designated by name as insured(s) in a policy.
Occurrence Limit Coverage: Occurrence liability coverage insures accidents or events that happen during the policy term, even if the plaintiff does not make a claim until months or years later. Occurrence limits are available for each accident or event, subject to the aggregate limit. Most liability policies are written on an occurrence basis, and it is normally thought to be a preferred coverage arrangement.
Personal Injury Liability: This coverage insures liability for certain injuries of a non-physical nature, such as false arrest, detention, libel, slander, defamation, wrongful entry, and eviction. This coverage is also included in "Commercial General Liability" coverage and is provided whenever CGL coverage is in force.
Pollution Liability: All Commercial General Liability policies exclude pollution totally. Any vendor handling, disposing, or transporting hazardous materials should have this protection to protect themselves and the County. Specific insurance wording may be required from Risk Management since pollution liability policies are always claims-made, and standard insurance agreements are not used by pollution insurers.
Products/Completed Operations: This coverage insures liability for bodily injury or property damage resulting from products sold, handled or distributed by a supplier, or faulty work completed by a contractor. Typically, this coverage is included in "Commercial General Liability" coverage and should be required from all contractors as well as all suppliers of hazardous or dangerous products.
Professional Liability: Separate insurance for professional activities is necessary because all professional liability is excluded from the Commercial General Liability policy. This typically claims-made coverage needs to be required from all professionals including but not limited to medical practitioners, physicians, engineers, attorneys, accountants, and architects. It is also sometimes referred to as "Errors and Omissions" coverage.
Surety Bond: This bond protects the County when the contractor fails to perform his/her specified duties. The surety agrees to answer to the County for the resulting situation that occurs when the contractor defaults.
"Symbol 1" Commercial Automobile Insurance: This coverage protects against liability claims arising from the use of "any automobile," either owned, hired, or non-owned (employee vehicles). Symbol 1 should always be specified and confirmed when requiring automobile coverage.
Tail Coverage: See definition for "Extended Reporting Coverage."
Umbrella Liability Coverage: Umbrella coverage means higher limits over and above "primary" or "underlying" policies. This coverage extends limits over Commercial General Liability, Commercial Automobile and Employers Liability policies. Umbrellas do not normally extend limits over Professional Liability (Errors and Omissions) or Pollution Liability contracts. Care should be taken to check Umbrella coverage extensions to ensure that adequate levels of protection are in place.
Waiver of Subrogation: Waiver of subrogation means the relinquishment of a right to seek reimbursement for a loss from the responsible party. A typical example is a lease of premises agreement where the parties agree that the lessee will not be ultimately liable for fire or other damage to premises, but rather that the lessor's insurer will respond to the loss under the lessor's property policy without seeking damage from the lessee's liability insurer.