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Business Insurance Glossary — D Through H

D

E

F

G

H


D

Data and media coverage
In the event of covered loss, this type of protection provides coverage for the policy holder's media programs and applications, data records and proprietary programs, as well as the property of others which is in the insured's care, custody or control.

Death benefits
Funds paid to a beneficiary when the insured under a life insurance policy dies.

Degree of risk
The level of loss a peril could potentially cause. This measurement may affect policy premiums, however, in some cases a business may reduce policy costs by taking steps to manage risk.

Deductible
The amount that a policy holder must pay out-of-pocket before an insurance company pays a claim.

Depreciation
When reimbursing a policy holder for property loss, insurance companies determine how much the covered property has decreased in value over a certain period of time.

Directors and officers liability coverage
If allegations of wrongful acts are made against a business's directors or officers, this insurance would protect the company from losses due to legal judgments and related defense expenses.
Dividends
Money returned to policy holders from an insurance company's earnings that reflects the difference between the premium charged and actual losses.
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E

Earned premiums
If a business pays an insurance premium in advance for a policy that is later canceled midterm, the insurance company is only entitled to keep the amount of premium for the period for which coverage was provided.

Economic loss
The cash value deficit that results from the death or disability of a wage earner or destruction of property. Factors considered when calculating this amount include lost income, medical, funeral or legal expenses and the cost of restoring or replacing property.

Employer's liability insurance
This coverage protects employers in the event an employee files a lawsuit following a work-related injury or illness.

Employment practices liability insurance
Protects employers from employment-related claims (such as wrongful termination or harassment) made by current, potential or former employees.

Endorsement
A written supplement attached to an insurance policy that modifies the policy's terms and conditions. This form is sometimes referred to as a rider.

Exclusions
Incidents, losses or liabilities that are explicitly not covered by the terms of an insurance policy. Coverage for such situations may be available for purchase under a separate policy.

Experience
A statistical measure that represents losses incurred by a block of business or a particular type of risk for a particular carrier. This figure may affect premium costs.

Exposure
Financial measure used by insurance companies to illustrate vulnerability to loss.

Extended coverage
Extra protection purchased to cover specific situations not covered by an insurance policy.

Extra expense insurance
When a business's operations are interrupted due to a covered loss, this coverage pays for supplies, equipment and other necessary operating costs.
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F

FDIC
An independent agency owned by the federal government, the Federal Deposit Insurance Corporation (FDIC) provides protection to consumers for deposits held by banks and other financial institutions.

Fidelity coverage
A form of liability insurance purchased by businesses for protection against dishonest acts committed by employees, such as theft or fraud.

Fiduciary
A trusted individual appointed by a policy holder to oversee funds or property.

Floater
This is a separate policy that covers movable items of value such as laptops, tradeshow displays and other portable business equipment.

Flood and earthquake insurance
An insurance policy that specifically covers property damaged in a flood or earthquake, as these types of natural disaster are not covered by a standard insurance policy. Rates vary according to the insured business's exposure to risk.

Fraud
Calculated deception committed either by a policy holder attempting to obtain payment for an invalid insurance claim, or by an insurance company employee or broker who misrepresents information for personal financial gain.
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G

GAP insurance
Optional coverage available in some states, this type of insurance is used when a policy holder owes a lender or leasing company more money on a loan than the actual cash value of the item (e.g., auto, equipment). In the event of an accident, GAP insurance would make up this difference.

Grace period
The period of time (typically 31 days) before an insurance policy is cancelled due to an unpaid premium. During this period, a policy holder may make a payment and it will not be considered late.

Group health insurance
Medical coverage offered to employees or members of an organization where subscribers are reimbursed for covered health care services according to the plan's benefits structure.

Group life insurance
Typically offered as an employee benefit or as an option through a membership organization, this type of life insurance enables all plan participants to be covered under one policy.
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H

Health Maintenance Organization — HMO
A pre-paid group health insurance plan where a network of contracted health care practitioners provide members with medical care. With this type of plan, the focus is on preventative health care and referrals to specialists are required. If a business provides health care coverage as part of its benefits package, this option may be offered to employees. (See also Independent Practice Association — IPA and Preferred Provider Organization — PPO)
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