Annual premium equivalent (APE) represents the total premium for a policy if it were to be taken out for one year. This term is typically used for life insurance policies, but can be applied to other types of insurance as well. What does API mean in insurance? API stands for “Application Programming Interface.” An API … Read more
A War Exclusion Clause is a type of clause often found in insurance contracts which excludes coverage for any loss or damage caused by war, invasion, or hostilities (whether war is declared or not). The clause may also exclude coverage for civil war, insurrection, or rebellion. What are the two categories of exclusions? There are … Read more
The term “Exposure Rating Definition” refers to the definition of what is considered to be an exposure for the purposes of calculating an insurance premium. An exposure is typically defined as a unit of measure, such as $1,000 of property value or $100,000 of liability coverage. The exposure rating definition may also include other factors, … Read more
Split limits is a type of insurance coverage that provides different limits of coverage for different types of losses. For example, a split limits policy might have a limit of $100,000 for bodily injury per person, $300,000 for bodily injury per accident, and $50,000 for property damage. What are split limits in insurance? A split … Read more
A commercial package policy (CPP) is an insurance policy that combines multiple types of coverage into one policy. This can include property insurance, liability insurance, and crime insurance. CPPs are typically used by businesses to insure against a variety of risks. What is not covered under CPP? There are a few things that are not … Read more
The Inchmaree Clause is a clause that is often found in insurance policies that provides coverage for losses that are caused by an insured’s own negligence. The clause is named after the case of Inchmaree v. Royal Exchange Assurance, in which the English court held that an insurer could not avoid liability for a loss … Read more
Probable Maximum Loss (PML) is the estimated maximum loss that could reasonably occur from the most severe combination of peril, exposure, and vulnerabilities. PML estimates are used to help determine the amount of insurance coverage a business should purchase, as well as the retention limit for a self-insured retention program. What is seismic PML? Seismic … Read more
A commutation agreement is an agreement between an insurer and a policyholder to cancel a life insurance policy and pay the policyholder a lump sum of cash. The insurer agrees to pay the policyholder an amount that is less than the face value of the policy. What is facultative reinsurance? Facultative reinsurance is a type … Read more
Wholesale insurance is insurance that is sold to businesses, rather than individuals. This type of insurance is typically used to protect businesses from risks that are not covered by traditional insurance policies. For example, a business may purchase wholesale insurance to protect against products that are damaged in transit. What is a wholesale industry? The … Read more
A block policy is an insurance policy that covers a group of policyholders under one contract. Block policies are often used to insure multiple properties under one contract, or to insure a group of people with similar risk profiles. What does COP mean in insurance? COP stands for “certificate of insurance.” It is a document … Read more
