Glossary of Small Business Insurance Terms

ADJUSTER. A person who settles insurance claims. An adjuster may be a Travelers employee or an independent operator.

ADJUSTMENT. The settlement of a claim; final premium determination.

AGENT'S AUTHORITY. The authority placed in the agent by the insurance company; the extent to which the agent may act on behalf of the company. This authority is defined by a contract between the agent and the company.

ALL-RISK. A term commonly used to describe broad forms of Property or Liability coverages. It is misleading because no Property or Liability Policy is truly an ALL-RISK coverage. A Policy will invariably contain some exclusions.

APPRAISAL. An estimate of value, loss or damage.

ASSIGNED RISK. A risk that has been declined by one or more companies. Such a risk may be assigned to designated companies by a recognized authority. The operation is called an Assigned Risk Plan.

ASSURED. The insured; the one for whom insurance is written.

BASIC BENEFITS. Basic benefits, generally, are all the benefits offered by a group health plan except major medical. Basic benefits may include hospital, surgical and medical expense insurance: supplemental accident, diagnostic lab and X-ray, radiation therapy and dental expense insurance.

BENEFICIARY. A person who will receive policy benefits.

BENEFIT FORMULA. A benefit formula defines the amounts of life insurance that may be purchased for employees in a specific classification (salary, occupation, length of service).

BENEFIT. That amount payable under an insurance policy because of an accident, injury or illness.

BINDER. An agreement, usually written, whereby one party agrees to insure another party pending receipt of a final action upon the application.

BUSINESS INTERRUPTION. Insurance covering the loss of earnings resulting from the destruction of property: called Use and Occupancy Insurance.

CANCELLATION. The terminating of an insurance contract by either the insurance company or the insured.

CARRIER. An insurance company.

CASH DEDUCTIBLE. The amount of money an insured must pay for covered expenses before certain benefits can begin.

CASH VALUE. The value, in cash, of a life insurance policy.

CASUALTY. An accident, occurrence or event; the person to whom it happens; the general insurance term applied to insurance coverages for an accident, occurrence or event.

CERTLET. A booklet that describes the benefits and all the provisions of a group policy that affect the insured. The certlet becomes a certification of insurance when the person is eligible for the insurance. It is then the legal document that proves the person is actually insured.

CLAIM. A request by an insured for benefits under an insurance policy.

COINSURANCE. Two or more entities providing insurance protection and sharing in losses.

COMPENSATION. Wages, salaries, awards, fees, commissions; any return in payment for a financial loss.

COMPREHENSIVE. A loosely used term signifying broad or extensive insurance coverage.

CONTRIBUTORY. A group insurance plan that is paid partly by employees' contributions and partly by the employer's contributions.

CONTRIBUTORY NEGLIGENCE. Partial responsibility for one's own injury or damage.

COVERAGE. The insurance protection provided by the policy.

DECLARATIONS. That part of an insurance policy containing the information about the applicant that the applicant listed on the application for insurance.

DEDUCTIBLE. An amount the insured must pay before insurance benefits may be paid.

DISCOUNT. A reduction applied to an insurance premium because of good experience, for example.

DRAFT. A financial instrument similar to a check frequently used by insurance companies to pay losses.

EFFECTIVE DATE. The date the policy is put in force; the inception date.

ENDORSEMENT. A written amendment affecting the declarations, insuring agreements, exclusions or conditions of an insurance policy; a rider.

EVIDENCE OF INSURABILITY, Medical proof, from either a questionnaire or a physical examination, that an applicant, employee or dependent is healthy and, therefore, insurable.

EXAMINER. An individual who reviews, evaluates and processes claims.

EXCLUSION. That which is expressly eliminated from the coverage of an insurance policy.

EXPIRATION DATE. The date an insurance policy terminates.

EXPOSURE. Person or property, injury to whom or damage to which will cause an economic loss.

FACE AMOUNT. In life insurance, the amount of basic coverage stated on the face of the policy.

GRACE PERIOD. A period beyond the premium-due date, during which the premium may be paid and the insurance will be continued in force.

GROUP INSURANCE. Insurance covering a group of employees.

HAZARD. A condition that creates or increases the probability of a loss.

HEALTH INSURANCE. Commonly called Accident and health Insurance, protection against financial loss from a personal accident or illness.

INCURRED LOSS. A loss that, while not yet paid, has been sustained and for which reserves have been established to pay in the future.

INDEMNITY. Insurance protection that will place the insured in the same financial position as before a loss was sustained.

INSPECTION. An examination by those having authority. An insurance company usually reserves the right to inspect any property it insures.

INSURANCE. Protection against loss. The insured sacrifices a small certain loss (the premium) for protection against a large uncertain loss (an accident, fire, death). The insurance company assumes the risk by employing the law of large numbers and the principle of risk spreading.

INSURED. The entity whose life or property is protected by the insurance. The one for whom insurance is written.

LAPSE. To fail to continue an insurance policy; to cease to provide insurance protection.

LIABILITY. Being bound by law and justice to do something that may be enforced by the courts.

LIMITS. The value or amount of a policy; the greatest amount that can be collected under the policy.

LOSS. In insurance, the amount the insurer is required to pay because of an insurer's loss.

MULTI PERIL. An insurance policy that provides coverage against many perils. Sometimes called a "package" policy.

OCCURRENCE. A continuance of a repeated exposure to conditions which result in injury.

PERIL. Anything that may cause a loss (cause of a possible loss).

POLICY. A legal contract of insurance.

POLICYHOLDER. The owner of the policy; the one who purchases the policy and pays the premiums.

POLICY PERIOD. The term for which insurance remains in force, sometimes definite, sometimes not.

PREMIUM. The cost of an insurance policy. The charge the policyholder pays for the insurance protection.

PROPERTY. The thing owned; real property is real estate and things attached to it; anything else is personal property.

PROPERTY DAMAGE. Physical damage to property.

PROVISIONS. The terms or conditions of an insurance policy.

RATE. Cost per unit of insurance.

REINSTATE. To restore coverage after it has been canceled or suspended.

REINSURANCE. Insurance placed by an underwriter in another company to reduce the amount of the risk his or her company has assumed.

RENEW. To continue; to replace as with a new policy.

RIDER. An endorsement.

SCHEDULE OF BENEFITS. The amount of insurance for which each classification of employees is eligible. (Classifications can be based on salary, wage, occupation or length of service.)

SELF-INSURANCE. An arrangement where, instead of purchasing an insurance policy, a party maintains a reserve fund to protect it against a loss.

SETTLEMENT OPTION. The way in which money for the death benefit of an insurance policy will be paid to a beneficiary.

SURETY. A guarantee that a person, normally called the principal, will perform according to a statute or a contract. Surety offers protection to a third party, normally called an obligee.

UNDERWRITER. The insurance company; a party assuming the risk; the person performing the underwriting function.

VOID. Of no force; null.

WAITING PERIOD. A period immediately after the inception of the policy, during which no benefits will be paid even if a loss occurs. Pertains to health insurance.

WAIVER OF PREMIUM. In life insurance, a provision which states that, if the insured becomes disabled and the disability appears total and permanent, the insurance policy will continue in full force without further payment or premium.

 

 

As the Proprietor of Your own company you deal with problems on an almost daily basis. Getting comfortable with effective Problem
Solving Techniques can dramatically affect the growth of your small business.

Although you Find solutions to your problems, many businessmen and women are not really proficient in the methods of problem
solving, and if solutions fail, they fault themselves for misjudgment. The issue is usually not misjudgment but rather a lack of
skill.

This manual Educates you in a few problem solving processes. Crucial to the success of a business faced with issues is your
comprehension of what the issues are, defining themfinding solutions, and picking the best answers for your situations.

What's a problem. A dilemma is a situation that poses trouble or perplexity. Issues are available in many shapes and dimensions.
By Way of Example, it can be:

Something did Not work as it should and you do not know how or why. Something you need is inaccessible, and something must be
found to take its place. Workers are undermining a new program. The market isn't purchasing. What do you do to survive? Clients
are complaining. How can you manage their complaints?

Where do Issues come from? Issues arise from every facet of human and mechanical purposes as well as in nature. Some problems we
cause ourselves (e.g., a hasty decision has been made and the wrong individual was selected for the job); additional problems are
brought on by forces beyond our control (e.g., a warehouse is struck by lightning and burns ).

Issues are a Natural, regular occurrence of lifestyle, and in order to suffer less from the anxieties and frustrations they cause,
we need to learn to deal with them in a rational, logical fashion.

If we accept The simple fact that issues will arise on a regular basis, for many different motives, and by an assortment of
resources, we can: learn to approach problems from an objective standpoint; learn how to expect some of these; and prevent some of
them from getting larger problems.

To accomplish This, you need to learn the procedure for problem solving. Here, we'll instruct you in the basic procedures of
problem-solving. It's a step-by-step guide which you can easily follow and exercise. As you follow this manual, you will
eventually develop some tips of your own that function in concert with all the problem-solving procedure described in this guide.

Keep in mind, However, as you see that this is not a thorough analysis of the art of problem-solving but rather a practical,
orderly, and simplified, yet powerful, way to approach issues contemplating the limited time and information most business owners
and managers possess. In addition, some problems are so complex that they need the further help of experts in the field, so be
prepared to accept that a number of issues are beyond just one individual's ability, skill, and desire to be successful.

To be able to Appropriately recognize the problem and its causes, you have to do some study. To do this, just list each of the
previous queries in checklist form, and maintaining the checklist useful, go about gathering as much info as you possibly can.
Remember the relative importance and urgency of the problem, in addition to your own time limitations. Then interview the folks
involved with the issue, asking them the questions on your checklist.

After you've Gathered the information and reviewed it, you'll have a fairly clear understanding of the problem and what the
significant causes of the problem are. At this point, you can research the causes farther through observation and extra
interviewing. Now, you should summarize the problem as briefly as you can, list all of the causes you've identified, and record
all of the areas the issue seems to be affecting.

Now, You are ready to check your comprehension of the issue. You have already identified the problem, broken it all down to all
its facets, narrowed down it, done research on it, and you are avoiding typical roadblocks. On a large pad, write down the issue,
including all the factors, the regions it affects, and what the consequences are. To get a better visual comprehension, you might
also wish to diagram the problem showing cause and effect.

Study what you Have written down or diagrammed. Call in your workers and talk about your analysis together. Based on their
opinions, you may choose to revise. Once you believe you fully comprehend the causes and consequences of the problem, summarize
the problem as succinctly and as easily as you can.

Go through your Long list of solutions and cross-out those who clearly will not work. Those notions aren't wasted for they impact
on those thoughts that stay. To put it differently, the best ideas you pick may be revised based on the ideas that would not work.
With the rest of the solutions, use what is called the"Force Field Analysis Technique." This is basically an analysis technique
that divides down the solution to its positive effects and negative outcomes. To do this, write each solution you are
contemplating on a different piece of paper. Beneath the solution, draw a line vertically down the middle of the paper. Label one
column advantages and one column disadvantages.

Now, some more Analytical thinking comes in to play. Analyzing each facet of this solution and its influence on the issue, listing
every one of the benefits and disadvantages you may consider.

One way to help You think of the advantages and disadvantages is to role-play every solution. Call in a few of your employees and
play out each alternative. Ask them to their own reactions. Depending on what you observe and on their opinions, you will have a
clearer idea of the advantages and disadvantages of each alternative you're thinking about.

Once you Complete this process for each solution, pick those solutions that have the Many advantages. Now, you should be
considering only three or two.

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