The value specified by the manufacturer as the maximum total loaded weight of a single
vehicle.

Inland marine insurance designed to provide coverage for loss of or damage to jewelry that is
the stock of jewelry retailers, wholesalers, manufacturers and pawnbrokers.

A type of business interruption coverage that does not include a coinsurance clause but
limits recovery to loss incurred during a specified period of time (typically 120 days) after
the direct damage loss. Approximated by the “maximum period of indemnity coverage
option” of the Insurance Services Office, Inc. (ISO), coverage forms

Otherwise known as “expected losses,” the loss pick is an underwriter’s (or actuary’s)
estimation of future losses based on past losses. Typically, 5 years’ of historical loss data will
be used to predict an estimate of a future year’s losses.

An extended reporting period with a very short (i.e., 60 days) duration.

A property insurance term referring to policies that provide coverage only for loss caused by
the perils specifically listed as covered.

Inland marine coverage on property (usually equipment) being installed by a contractor.
Essentially a specialized type of builder’s risk coverage that is often written on the same
form used to provide builder’s risk coverage.

A provision in standard automobile liability policies that embraces within the definition of
“insured” certain persons without the necessity of naming them or designating them
specifically.

The cost of investigating and adjusting losses. Loss adjustment expenses need not be
allocated to a particular claim.

An experience rating plan for risks operating on a multistate (interstate) basis that utilizes
the experience developed within more than one state.

Sometimes used as a substitute for the term all risks in describing property insurance that
insures against loss to covered property from all causes except those that are specifically
excluded.

Liability for bodily injury or property damage arising out of the serving or distribution of
alcoholic beverages by a party not engaged in this activity as a business enterprise.

Described in commercial auto policies as an auto that is used in connection with the named
insured’s business but that is neither owned, leased, hired, rented or borrowed by the
named insured. As used in the business auto policy, the term specifically applies to vehicles
owned by employees and used for company business; as used in the truckers and motor
carrier policies, it applies only if such autos are private passenger type autos.

A factor used in the retrospective rating formula that provides a charge to cover unallocated
claims and the cost of the insurer’s claim services. Since the charge is developed as part of
the formula, the amount the insured will pay for unallocated loss expenses is a function of
losses.

An interest in the value of the subject of insurance, including any legal or financial relationship.

Exterior walls of masonry material (adobe, brick, concrete, gypsum block, hollow concrete
block, stone, tile or similar materials), with floor and roof of metal or other noncombustible
materials.

Specialty crime coverage that insures against loss by the surrender of property as a result of
a threat of harm to the named insured, an employee or a relative or guest of the insured or
the insured’s employees.

A boiler and machinery insurance term for equipment or machinery. Boiler and machinery
coverage applies to loss or damage resulting from an accident (such as a breakdown or
explosion) to a covered object.

Also called “pure premium,” the actual or expected cost to an insurer of indemnity payments
and allocated loss adjustment expenses.

A property insurance endorsement or provision establishing market value (rather than actual
cash value or replacement cost value) as the valuation basis for covered property. Usually
used in connection with agricultural products and other commodities whose value fluctuates
in accordance with a commodities exchange.

Exterior walls of wood, brick veneer, stone veneer, wood ironclad, stucco on wood.

Errors and omissions liability insurance covering the directors and officers (D&O) of nonprofit
organizations. Such policies, while resembling the D&O forms covering for-profit firms,
generally offer broader protection by providing entity coverage, employment practices liability
insurance, and substantially lower retention levels.

An endorsement to a property business interruption policy limiting to a specified number of
days (such as 90 days) or eliminating altogether, coverage for payroll expense of employees
other than executives, department managers, employees under contract, and other
“important” employees. In the absence of such an endorsement, virtually all property
business interruption policies cover ordinary payroll.

The difference between the original loss as initially reserved by an insurer and its subsequent
evaluation at a later date or at the time of its final disposal. This occurs
because of (1) inflation - both “social inflation” and inflation in the consumer price index -
during the time period in which losses are reported and ultimately settled; and (2) time lags
between the occurrence of claims and the time they are actually reported to an insurer.

A legal doctrine applying in some states that allows an injured person to sue and recover
from any one or more of several wrongdoers at his option, regardless of that wrongdoer’s
degree of negligence. The injured party cannot receive double compensation but can choose
to recover 100 percent of a damages award from any defendant who is found liable to any
extent.