Orange Insurance LLC206.774.7867 [ Office ]877.288.6103 [ Toll Free ][email protected] [ Email ] [ Web ]Insurance Terms & DefinitionsA B C D E F G H I J K L M N O P Q R S T U V W X Y ZBelow are some standard terms and definitions used when describing Business and PersonalInsurance coverages. When reading the definitions, please keep in mind that this glossary isprovided as a guide only curated from various sources. These general definitions are providedfor educational purposes. Please refer to your policy or certificate of insurance for exactdefinitions of terms and coverage provisions. The defined terms and coverage provisions inyour policy or certificate of insurance, such as "Reasonable and Customary", may be differentfrom the general information provided below, and the policy or certificate language will prevail.Please further note that definitions and plan options may vary by state and plan.Scroll to the very bottom for terms and definitions specifically related to Health & Life Insurance.-A A&B: Agents and Brokers. A&E: Asbestos & Environmental. Absolute Liability: Liability for damages even though fault or negligence cannot be proven. Accident: An event or occurrence which is unforeseen and unintended. ACLF: Adult Congregant Living Facility Act of God: A flood, earthquake or other non preventable accident resulting from natural causes thatoccur without any human intervention. Activities of Daily Living: A list of activities, normally including mobility, dressing, bathing, toileting,transferring, and eating which are used to assess degree of impairment and determine eligibility for sometypes of insurance benefits. Actual Cash Value (ACV): 1) The cost of replacing or restoring property at prices prevailing at the timeand place of the loss, less depreciation, however caused; 2) replacement cost minus depreciation. Additional Insured (AI): A person, company or entity protected by an insurance policy in addition to theinsured. A person or organization not automatically included as an insured under an insurance policy, butfor whom insured status is arranged, usually by endorsement. A named insured's impetus for providingadditional insured status to others may be a desire to protect the other party because of a closerelationship with that party (e.g., employees or members of an insured club) or to comply with acontractual agreement requiring the named insured to do so (e.g., customers or owners of propertyleased by the named insured) Additional Insured (AI) Blanket: This includes unlimited additional insured endorsements. Additional Insured (AI) Endorsement: This usually includes one or two additional insuredendorsements. Additional Insured On A Primary And Non-Contributory Basis Clause: It's most easily understood withan example; Joe Construction subs out some work to Jack's Plumbing, with Joe Construction requestingthis wording. It means, if Joe Construction is sued, Jack's Plumbing's policy covers. They pay first(primary), and Joe Construction's policy doesn't have to kick in (non-contributory).To break it down even more, in the example of a contractor (or owner) and sub-contractor, if thecontractor (or owner) requires the sub-contractor to have this wording in their policy, the contractor (or

Orange Insurance LLC206.774.7867 [ Office ]877.288.6103 [ Toll Free ][email protected] [ Email ] [ Web ]owner) will be less liable for damage done to the project. Primary wording means that if a contractor (orowner) of a project is partially responsible for damage or injury that occurs on a project, the subcontractor’s policy will pay out FIRST. The Non-Contributory wording states that in the same situation, thesub-contractor's insurance will be the only insurance paying out. Adjuster: A person who investigates and settles losses for an insurance carrier. Adjusting: The process of investigating and settling losses with or by an insurance carrier. Adjusting Injury: What is an Advertising Injury?. An advertising injury is an injury to a third-partybrought about by the business' advertising its goods and services. This can occur by copyright ortrademark infringement. It can also occur as a claim of libel, slander, or invasion of privacy. Typically, acompetitor of your business complains that an act, advertisement, practice, or comment you or your staffhas made has damaged their business. For example, in comparing products, your advertisement uses aphoto of your competitor's product and makes a false claim about the competitor's product. Thecompetitor sues your business for a variety of claims: defamation, trademark infringement, etc. Yourcommercial policy would provide a defense and indemnity for this kind of claim.What Claims are Covered?Your business is provided advertising injury coverage through your commercial general liability policy forclaims such as: LibelSlanderInvasion of PrivacyCopyright InfringementTrademark or Trade Dress ClaimsCertain State Law ClaimsCertain Misappropriation ClaimsUnfair Competition Claims (older policies)The typical commercial general liability defines advertising as; “A notice that is broadcast or published tothe general public or specific market segment about your goods, products or services for the purpose ofattracting customers or supporters.”The coverage provides your business a defense and indemnification for damages as long as the claimrelates to a business advertising reason and is not an intentional non-advertising claim. However, thedefinition of "advertising" has been interpreted differently from state to state. Some courts require theactivity to be wide ranging communication to a broad audience while other courts define the simple act ofbusiness promotion to be advertising without regard to the size of the audience.There are exclusions from coverage in most standard CGL policies. Most of the exclusions look to whetherthe act causing the claim was an intentional act or knowing violation of the law. Typical exclusions fromcoverage include: Knowingly Publishing False Information - Coverage is meant to cover those instances whereadvertising or promotion unintentionally includes false or misleading information.Knowingly Violating the Rights of Another - As an example: If your business knows it has nopermission to use a child's image in its advertising, and does so anyways, coverage will beexcluded.Criminal Acts - Criminal copyright and trademark infringement, or other criminal acts are notcovered.

Orange Insurance LLC206.774.7867 [ Office ]877.288.6103 [ Toll Free ][email protected] [ Email ] [ Web ] Breach of Contract and Contractual Liability - Your business cannot assume advertising liability bycontract. For example, if your business rents a hall as part of a trade organization, and yourbusiness signs a hold harmless agreement with the organization and hall, if a visitor sues thetrade organization or hall and your business becomes liable as a result of the hold harmlessagreement - there is no coverage.Price, Quality, and Performance Claims - Generally damages incurred because of erroneous price,quality, or performance claims are not covered. If owing to a printer error you advertise a 10,000 used car for 1,000, and actually sell the car at the advertised price of 1,000, theinsurer will not reimburse the other 9,000.There are other exclusions that are less likely and you will want to review the exclusions with yourinsurance professional.What About Websites, Bulletin Boards, and Forums?First, understand that certain businesses are excluded from most advertising injury coverage: Internet Service ProvidersWeb Site Designers and PublishersAdvertising CompaniesThese companies will need to purchase a separate endorsement to be covered completely. However,creating your own company web site does not turn your business into an advertising company. Generally,if your business designs and builds a website coverage extends to the promotional advertising material onthe site.However, this coverage is being limited each year as insurers begin to recognize the risk of advertisingclaims related to internet activities. Today, most Standard CGL policies exclude coverage for electronicforums or bulletin boards hosted by the insured. CGL policies also now exclude from coverage claimsrelated to "spam" or mass electronic advertising. Again, this is an area where you will want to speak withyour insurance professional. Admitted (Standard Lines): Standard line insurance companies are insurers that have received a licenseor authorization from a state for the purpose of writing specific kinds of insurance in that state, such asautomobile insurance or homeowners' insurance. They are typically referred to as "admitted" insurers.Generally, such an insurance company must submit its rates and policy forms to the state's insuranceregulator to receive his or her prior approval; although whether an insurance company must receive priorapproval depends upon the kind of insurance being written. Standard line insurance companies usuallycharge lower premiums than excess line insurers and may sell directly to individual insureds. They areregulated by state laws, which include restrictions on rates and forms, and which aim to protectconsumers and the public from unfair or abusive practices. These insurers also are required to contributeto state guarantee funds, which are used to pay for losses if an insurer becomes insolvent. Non-Admitted (E&S or Excess & Surplus Lines): Excess line insurance companies (also known as Excessand Surplus) typically insure risks not covered by the standard lines insurance market, due to a variety ofreasons (e.g., new entity or an entity that does not have an adequate loss history, an entity with uniquerisk characteristics, or an entity that has a loss history that does not fit the underwriting requirements ofthe standard lines insurance market). They are typically referred to as non-admitted or unlicensedinsurers. Non-admitted insurers are generally not licensed or authorized in the states in which they writebusiness, although they must be licensed or authorized in the state in which they are domiciled. Thesecompanies have more flexibility and can react faster than standard line insurance companies becausethey are not required to file rates and forms. However, they still have substantial regulatory requirementsplaced upon them.

Orange Insurance LLC206.774.7867 [ Office ]877.288.6103 [ Toll Free ][email protected] [ Email ] [ Web ]Most states require that Excess line insurers submit financial information, articles of incorporation, a listof officers, and other general information. They also may not write insurance that is typically available inthe admitted market, do not participate in state guarantee funds (and therefore policyholders do nothave any recourse through these funds if an insurer becomes insolvent and cannot pay claims), may payhigher taxes, only may write coverage for a risk if it has been rejected by three different admittedinsurers, and only when the insurance producer placing the business has a surplus lines license. Generally,when an excess line insurer writes a policy, it must, pursuant to state laws, provide disclosure to thepolicyholder that the policyholder's policy is being written by an excess line insurer. Agreed or Guaranteed Value: Agreed upon value for property. Then in the event of a total covered loss,the policy pays that amount – minus any deductible – guaranteed. ALS (Actual Loss Sustained): Some policies are written on an Actual Loss Sustained (ALS) basis for Lossof Business Income. If there is no limit shown in the declarations for ALS, this does not mean an unlimitedsource of payment for your loss. The loss must still be proven and the proof is the amount that will bepaid, and usually, it will note that the limit is to match some other limit or reference to your policycoverage. A.M. Best: Issues financial-strength ratings measuring insurance companies' ability to pay claims. It alsorates financial instruments issued by insurance companies, such as bonds, notes, and securitizationproducts.Best's Financial Strength Ratings (FSR) represent the company's assessment of an insurer's ability to meetits obligations to policyholders. The rating process involves quantitative and qualitative reviews of acompany's balance sheet, operating performance and business profile, including comparisons to peersand industry standards and assessments of an insurer's operating plans, philosophy and management.The ratings formulae are proprietary.The ratings scale includes six "Secure" ratings: A , A (Superior) A, A- (Excellent) B , B (Good)The scale also includes ten ratings for companies deemed "Vulnerable": B, B- (Fair) C , C (Marginal) C, C- (Weak) D (Poor) E (Under Regulatory Supervision) F (In Liquidation) S (Rating Suspended)There are many companies that A.M. Best follows but does not issue a Best's Credit Rating on. Thesecompanies are designated as Not Rated (NR). Amendment: A formal document changing the provisions of an insurance policy signed jointly by theinsurance company officer and the policy holder or hisauthorized representative. Annuity: Any terminating stream of fixed payments over a specified period of time; An annuity is acontract between you and an insurance company that is designed to meet retirement and other longrange goals, under which you make a lump-sum payment or series of payments. In return, the insureragrees to make periodic payments to you beginning immediately or at some future date.

Orange Insurance LLC206.774.7867 [ Office ]877.288.6103 [ Toll Free ][email protected] [ Email ] [ Web ]Annuities typically offer tax-deferred growth of earnings and may include a death benefit that will payyour beneficiary a specified minimum amount, such as your t