Prepaid expenses refer to amounts that are paid prior to the period they cover, such as insurance and rent. These expenses are assets on the balance sheet and become tax deductible during the appropriate period.
The principal sum refers to the core amount of a debt or financial obligation. In finance, it is the initial amount of money borrowed without interest. In insurance, it designates the amount specified to be paid to the beneficiary under the policy, such as the death benefit.
Pro rata cancellation refers to the revocation of an insurance policy by an insurance company, which returns to the policyholder the unearned premium without reducing for expenses already paid.
Professional Indemnity Insurance (PII) is a type of insurance that provides coverage for professionals and businesses to protect against claims for negligence, errors, and omissions in the service or advice they provide to clients.
Proof of Loss is documentation required by an insurance company from a policyowner to validate a claim, detailing the nature and extent of the loss. This ensures proper payment of benefits according to the policy.
Property insurance is a type of insurance policy that provides financial reimbursement to the owner or renter of a structure and its contents in case of damage or theft. It also provides liability coverage against accidents that may occur on the property.
Property management involves the operation of real estate as a business, including activities such as rental, rent collection, maintenance, and numerous other tasks related to the ownership and oversight of properties.
Pure Risk refers to situations where there is a risk of loss with no opportunity for gain. These conditions, such as fires, natural disasters, and liability issues, are where the need for insurance coverage is clearly indicated since there is only the risk of loss with no possibility of beneficial gain.
Recoupment refers to the process of regaining or recovering losses, typically through legal means, compensation, or adjustments of accounts, often seen in various fields such as accounting, business law, and insurance.
Coverage for damage or destruction of high-value property during shipments, often involving securities and money transfers. The insurance operates on an ALL-RISK basis, with common exclusions such as war, nuclear disaster, and illegal trade items.
A Residential Service Contract, often referred to as a home warranty, is an insurance policy that typically covers the plumbing, mechanical, and electrical systems of a home for one year. It is commonly offered at the purchase of an existing home and can be paid for by either the buyer or the seller.
A revocable beneficiary is a designated individual or entity that can receive benefits from a life insurance policy, trust, or other financial product, and whose designation can be changed or revoked by the policyholder or grantor at any time.
Risk financing transfer involves paying an insurance premium to an insurance firm to cover certain risk hazards, thereby transferring the financial consequences of those risks.
Risk management is a process that aims to help organizations understand, evaluate, and take action on all their risks to maximize their value. This can include taking out insurance or hedging through derivatives.
Risk retention is a method of self-insurance where an organization retains a reserve fund to offset unexpected financial claims. It involves setting aside funds to handle potential future losses and can be an effective risk management strategy under certain conditions.
A salesperson is an individual whose primary responsibility is selling products, services, or investments. Salespersons in various industries, such as real estate, insurance, and securities, are often required to hold licenses.
A provision in the Extended Coverage Endorsement of an insurance policy that ensures coverage for smoke damage resulting from sudden, unusual, and faulty operation of on-premises cooking or heating units connected to the chimney by means of a vent.
The Society of Actuaries (SOA) is an organization dedicated to the advancement and professional development of actuaries, providing invaluable resources, designations like the FSA (Fellow, Society of Actuaries), and fostering collaborations with members, volunteers, and other actuarial organizations.
Speculative risk refers to the possibility of both financial loss and financial gain, characterized by uncertainty and typically not covered by insurance.
Static risk refers to risks with a constant level of uncertainty regarding the outcome or payoff. This type of risk is not influenced by market fluctuations or evolving factors and typically remains unchanged over time.
A Stock Insurance Company is a type of insurance company that is owned by stockholders. These stockholders receive earnings in the form of shareholder dividends. However, under state laws, the interests of policyholders take precedence over those of stockholders.
Total disability refers to an injury or illness that is so serious it prevents a worker from performing any functions for which he or she is educated and trained. Workers with total disability may qualify for Disability Income Insurance, either through a private employer's plan or through the Social Security Disability Income Insurance program.
In the contexts of insurance and investments, underwriting involves assuming risk in exchange for a premium or facilitating the issuance and resale of securities, respectively.
An underwriter assesses risks and decides whether or not these risks can be insured, setting the appropriate premium charges, typically based on the frequency of past claims. Additionally, underwriters play a crucial role in financial transactions by guaranteeing to buy unsold shares during new issue offerings.
An uninsurable risk is a risk that is considered too extreme or too difficult to quantify, thereby making it undesirable for insurance companies to provide coverage.
Withholding refers to the portion of an employee's wages retained by the employer for the purpose of paying various taxes, insurance plans, pension plans, union dues, and other deductions.
Workers' compensation income refers to the benefits provided to employees who suffer work-related injuries or illnesses, compensating for loss of income, medical expenses, and rehabilitation costs during their recovery period.
Workers' Compensation, Coverage A refers to a type of insurance agreement where an insurer commits to covering all compensation and benefits that an insured employer is legally obligated to provide under state-specific workers' compensation laws.
Coverage under a commercial Workers' Compensation Policy for situations not covered under workers' compensation laws where an employee could sue for injuries suffered under common-law liability.
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