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Business Insurance Glossary — S Through Z

S

T

U

V

W


S

Salvage
Damaged property an insurer takes over to reduce its loss after paying a claim. Insurers receive salvage rights over property on which they have paid claims, such as badly damaged cars. Salvage charges are the costs associated with recovering such property.

Schedule
A listing of specific items covered under an insurance policy.

Self-insurance
Employers who assume all or part of the responsibility for paying employees' health insurance claims. Firms that self insure for health claims are exempt from state insurance laws mandating the illnesses that group health insurers must cover.

Settlement
Insurance policy proceeds paid by the insurer to a beneficiary or policy holder in order to resolve a claim.

Severity
A criterion used by insurance companies when calculating premium rates that indicates degree of loss or potential loss.

Solvency
A company's or individual's ability to repay debt.

Stacking
A process that allows policy holders to insure multiple vehicles under one policy (or one vehicle under multiple policies) in order to increase the amount of money available to pay out on an auto liability claim. This practice is not permitted in all states.

Sublimit
A maximum dollar amount of coverage that exists within another defined coverage maximum.

Surety bond
A guarantee typically used in conjunction with a contractual work agreement that promises the performing party will carry out the duties fully and completely, as defined in the terms of the contract.

Surplus
After an insurer's liabilities are subtracted from its assets, this is the amount left over that may be used to protect policy holders in case of unexpectedly high claims.

Surplus lines
Property/casualty insurance coverage that is not available from insurers licensed in the state, called admitted companies, and must be purchased from a non-admitted carrier. Laws that authorize and govern this kind of coverage vary from state to state.
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T

Term life insurance
A life insurance policy that offers coverage for a set amount of time — typically five to 20 years. If an insured dies during this period, the beneficiaries named in the policy would receive the full amount of the policy proceeds (subject to policy provisions). If the insured survives the term of the policy, the policy would expire without any cash value.

U

Umbrella coverage
Additional protection above and beyond the specified limits of an insurance policy.

Underinsurance
A policy holder who does not carry enough insurance may not be fully reimbursed for the types of losses covered under their policy.

Underwriting
The process of reviewing, accepting or rejecting insurance risks in order to charge appropriate premiums to potential or existing policy holders.

Underlying policy
A policy providing basic or primary coverage for a loss. For example, in a business umbrella liability policy, a schedule of underlying insurance is listed.

Unearned premium
A portion of the premium that has already been paid to an insurance company, for which protection has not yet been provided. Insurance premiums are usually paid in advance; however, the premium is not fully earned until the policy's expiration date.

Uninsurable risk
A peril that is not likely to be covered by an insurance company.

Uninsured motorist coverage
Coverage that provides coverage to a policy holder in the event he or she is injured as a result of an accident with a hit-and-run driver or other motorist with insufficient liability insurance. (See also collision coverage, comprehensive coverage, liability coverage and uninsured motorist coverage)
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V

Valued policy — inland marine
The policy holder and insurance company agree on the value of the property at inception to determine what amount will be paid in the event of a total loss.

Void
This term is used in reference to a policy which is not legally in force.
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W

Workers' compensation insurance
Most states require businesses to carry this type of coverage, which provides income and medical benefits to employees who are injured on the job.

Write
The process of reviewing and accepting a potential policy holder's application for insurance.
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