other or from other property.
Clean-up costs – Generally, those costs associated with the clean-up of pollution.
Close or closely held corporation – A corporation that is owned by a small number of individuals who are related. A close corporation fills its own vacancies.
COBRA – A health insurance plan which allows an employee who leaves a company to continue to be covered under the company’s health plan, for a certain time period and under certain conditions. The name results from the fact that the program was created under the Consolidated Omnibus Reconciliation Act. The system is designed to prevent employees who are between jobs from experiencing a lapse in coverage.
Coercion – Another act defined by most states as an unfair trade practice. Coercion occurs when someone in the insurance business uses physical or mental force to persuade another to transact insurance.
Coinsurance clause – Coinsurance refers to the bargain between commercial property owners and the insurance industry. This clause in property policies encourages the property owner to gauge coverage needs by possible, not probable, maximum loss. With $1 million at risk but a probable maximum loss of $100,000, for example, the property owner would probably buy $100,000 insurance and bank on avoiding the larger disaster. The bargain offered by the insurance industry is a reduced rate per $100 of coverage if the owner agrees to buy coverage at a specified relation (80% commonly) to value (to possible maximum loss in other words). If the insured accepts the bargain but events prove the amount of insurance is inadequate to the stated coinsurance percentage, the insured becomes coinsurer in the same ratio as the amount of insurance bears to the amount that should have been carried.
Collapse – A property insurance peril, subject to its own specific agreement in property policies, that otherwise insure on an open perils basis.
Collision damage waiver – When paired with an auto rental agreement, the rental car company agrees to waive the renter’s responsibility for any physical damage to the rental car in exchange for an additional payment. Sometimes called a loss damage waiver. Collision insurance – A type of physical damage insurance available for automobiles. Coverage is triggered when damage is caused by striking against another object.
Collusion – A secret agreement between persons to defraud another, e.g., an insured driver of an automobile and his passenger may misrepresent the facts of an accident in order to have monies paid to the passenger under the insured’s automobile insurance policy. Combined ratio – The sum of an insurance company’s loss ratio and expense ratio; used as an indicator of profitability for insurance companies.
Combined single limit (CSL) – Liability policies commonly offer separate limits that apply to bodily injury claims and to claims for property damage. 50/100/25 is shorthand under such a policy for $50,000 per person/$100,000 per accident for bodily injury claims and $25,000 for property damage. A combined single limits policy might cover for $100,000 per covered occurrence whether bodily injury or property damage, one person or many.
Commercial blanket bond – A bond that covers the named insured against employee dishonesty. A single coverage amount applies to any one loss, regardless of the number of employees involved.
Commercial general liability (CGL) – The CGL policy is an ISO form, widely used to provide commercial enterprises with premises and operations liability coverage, products and completed operations insurance and personal injury coverage. Premises medical payments coverage is often included as well.
Commercial lines – A distinction marking property and liability coverage written for business or entrepreneurial interests as opposed to personal lines.
Commercial property policy – An alternative title for the commercial building and personal property coverage form.
Commissioner of insurance – The official in a state (or territory) responsible for administering insurance regulation; sometimes called the superintendent or director of insurance.
Common area – The part of a building or premises either owned by or used by all tenants or tenant-owners of the building (e.g., the swimming pool at a condominium).
Common carrier – A carrier (such as a shipping company or railroad) who offers his vessel or other mode of transportation to the public for the purpose of transporting merchandise.
Comparative negligence – A variation of contributory negligence, in which the comparative degree of negligence for each party to an accident is taken into account when awarding damages.
Compensatory damages – The award, usually monetary, that is intended to compensate the claimant for injury sustained. Competitive state fund – A facility established by a state to sell workers compensation in competition with private insurers. Completed operations – See Products and completed operations.
Completed operations insurance – See Products and completed operations.
Completion bond – A bond that guarantees a lending institution or other mortgagee that a building or other construction that they have lent money on will be completed on time so it can used as collateral on the loan.
Comprehensive Loss Underwriting Exchange – Commonly referred to as a CLUE report, this provides accident or loss history of individuals including claim payments and coverages. Used by agents and carriers to determine eligibility and premiums for coverage. Comprehensive personal liability insurance – Provides individuals and family members with protection from legal liability for most accidents caused by them in their personal lives. Note that any legal liability claims submitted while in the course of business activities are not covered.
Comprehensive physical damage (automobile) – Traditional name for physical damage coverage for losses by fire, theft, vandalism, falling objects, and various other perils. On personal auto policies, this is now called other than collision coverage. On commercial forms, it continues to be called comprehensive coverage.
Compulsory auto insurance – The minimum amount of auto liability insurance that meets a state law. Financial responsibility laws in every state require all automobile drivers to show proof, after an accident, of their ability to pay damages up to the state minimum. In compulsory liability states this proof, which is usually in the form of an insurance policy, is required before you can legally drive a car. Computer fraud coverage – Covers loss if money, securities, or other property is stolen or transferred through computer fraud. Computer insurance – Covers computer equipment and peripherals beyond the normal coverage provided in homeowner’s insurance policies, typically between $1,000 and $3,000. Some policies are also designed to cover damage and/or theft of portable equipment, such as laptop computers, and even the costs of data recovery.
Concurrent causation – When two perils contribute concurrently to a property loss, one excluded and the other not, the effect of the exclusion tends to be voided in a policy covering on an open perils basis. A concurrent causation exclusion is found in current forms. Condition – One of the obligations of either the insured or the insurer imposed in the insurance contract.
Conditional sales floater – Covers a store’s property purchased on installment.
Condominium – Type of dwelling where the structure is owned jointly while spaces within the structure are owned individually. Special property and liability forms cover the interests of the condominium association and of unit owners.