Taft-Hartley Law
The 1935 National Labor Relations Act was passed in an attempt to prevent unfair labor practices. In order to strengthen, further define, and amend the National Labor Relations Act, Congress passed the Taft-Hartley Law in 1947.
Tail
Liability that exists for losses that are not discovered or reported, or claims made and settled until some time after the policy has expired. Tail exposures may be found in almost all of the liability lines.
[T003]
Tail coverage
Insurance coverage available to provide protection for tail exposures. The present occurrence version of the commercial general liability (CGL) form already provides protection for losses that occurred during the policy period, regardless of when they are reported or claims made. The claims-made version of the CGL must be endorsed to provide coverage for claims that are not made during the policy period.
[T004]
Take-all-comers
A proposal (or requirement in a few states) that an insurer must accept all applicants for a given type of insurance. Also called all-comers.
[T005]
Takeover defense insurance
Protection to reimburse a corporation for expenses incurred, such as legal, investment advisory, communications, accounting, and similar types of expenses, in successfully resisting an attempt to assume its ownership or control by a stock tender offer. Corporations eligible are those whose stock is either traded on public exchanges or which are registered under Section 12 of the Securities Exchange Act of 1934.
[T071]
Tankerman's legal liability
Tankerman operations involve loading and unloading all types of cargo transported by tanker vessels. Many types of cargo they handle are inherently dangerous. Tankerman's legal liability insures these operations from damage or injury to third parties. The damage or injury must be related to their loading/unloading activities.
[T006]
Target (or target risk)
1) A risk which because of its large size, or another characteristic, must be offered to many insurers in order to be placed. Everybody "takes a shot at it."
2) A large risk sought after by virtually all large brokers.
[T059]
Target benefit pension plan
A hybrid between a true defined benefit pension plan and a money purchase pension plan. In the target benefit pension plan a target amount of retirement benefit is selected, i.e. 50% of salary at age 65. However, unlike the defined benefit plan, that target benefit is not guaranteed. Like the money purchase plan, the target benefit plan hopes to create the benefit through effective investment, but performance is not guaranteed.
[T086]
Target commodities
With regards to transportation risks (particularly trucking), refers to any products that are highly vulnerable to theft. Examples include electronics, clothing, tobacco and alcohol.
[T087]
Target marketing
Sales efforts (that typically includes product design) that focus on a specific category or class of business.
[T007]
Tariff
The rate made and published by a rating bureau. Also refers to the rules and schedules which are used to make the rates.
[T008]
Tax audit insurance
A type of specialty insurance coverage that provides funds to reimburse taxpayers for any additional expenses which may be incurred should the Internal Revenue Service (IRS) audit their tax returns. It does not pay for fines or penalties. Coverage is for reproductions, costs of records and related types of expenses.
[T009]
Tax preparers errors and omissions
A professional liability or errors and omissions insurance coverage designed specifically to meet the needs of accountants, bookkeepers, and similar professionals involved in the preparation of tax returns for other parties. Designed to cover negligence, errors, and omissions that may occur during the rendering or failing to render of those services. One feature frequently found in this type of policy is that both the tax preparation service and the individual tax preparers may be covered in one policy.
Technical reserves
A British term that refers to insurer reserves such as unearned premium, outstanding claims and other types of reserves.
[T085]
Telemetrics
A technology involving tools that permit the automatic measurement and transmission of data from remote sources. Telemetrics (aka telemetry) is commonly used in weather tracking, oceanographical studies, collecting flight (including space flight) data, geographical tracking/mapping, and similar uses.
[T072]
Template language
An older term that refers to any policy or form that consists entirely of standard provisions, absent any special or custom features.
[T010]
Temporary disability benefits
State employer liability laws that mandate the minimum benefits that must be offered to temporarily injured, sick or disabled employees not otherwise covered by workers compensation laws.
[T060]
Temporary insurance agreement
A life insurance term used to describe the amount of insurance provided by the insurer between the period of time when the application is taken and the first mode of premium is made and the time the policy is issued. The limit of insurance on the temporary agreement may be less than the policy limit applied for. Most often the temporary insurance agreement is designed to pay if the insured dies before the policy is issued only if that company would have issued the policy except for the prior death of the insured.
[T011]
Temporary worker
A person furnished to an employer to substitute for a permanent employee on leave or to meet a seasonal or short-term workload condition. This does not include leased workers.
(See leased worker.)
[T012]
Tenants policy
A form of homeowners policy sold to persons who rent their living quarters or who are co-op apartment owners.
[T013]
Ten-day examination period
In health insurance, a notice on the first page of a policy that the policyholder has 10 days in which to examine the policy and return it for full refund of premium if not satisfied. Often known as the "ten-day free look," the provision is now required in many states.
[T014]
Tender offer defense expense insurance
Protection to reimburse a corporation for expenses incurred such as legal, investment advisory, communications, accounting, and similar types of expenses, in successfully resisting an attempt to assume its ownership or control by a stock tender offer. Corporations eligible are those whose stock is either traded on public exchanges or which are registered under Section 12 of the Securities Exchange Act of 1934.
[T015]
Term
The length of time for which a policy or bond is written.
[T016]
Term insurance
A type of life insurance policy that is not whole life or written to cover the whole remainder of the insured's lifetime, but instead is written to cover only a period of time. Often that period of time is a set number of years, such as 1 year, 10 years or 20 years. At other times, the policy is written for a term that expires at a specified age, for example, when the insured turns 65.
(See level term life insurance.)
[T017]
Term policy
A policy written for longer than one year. If for less than a year, it is a short-term policy.
[T018]
Term rate
The insurance rate for a policy period longer than one year. If for less than a year, it is a short-term rate.
[T019]
Term rule
The provision which stipulates the length of time for which a policy may be written and the discount, if any, applying to the rate or premium of policies issued for more than one year.
[T084]
Terminal operator's liability
Typically refers to a type of liability policy that protects a terminal operator against claims by third parties. The claims involve damage or loss to property owned by third parties that was under the care, control or custody of the terminal operator. Terminal may mean any number of things such as piers, wharves, docks, etc.
[T020]
Termination
The cessation of coverage caused either by the expiration of the policy or by cancellation or nonrenewal. Cancellation may be either at the insured's request (coverage no longer needed or replaced elsewhere) or at the request of the insurer (for cause such as higher than expected hazards or losses, lack of compliance with safety recommendations, or for nonpayment of premium).
[T021]
Territorial rating
When an insurer develops insurance classifications and rates based on the physical, environmental, political, and overall loss potential of geographic locations.
[T066]
Terrorism exclusion
Policy wording that typically defines what acts are considered to be the result of actions by terrorists and then an explanation of which acts are barred from coverage under the applicable insurance policy. The specific wording varies since standard wording is evolving.
[T022]
Terrorist insurance
Property insurance coverages or policies designed to protect an insured against physical damage caused by terrorist acts.
[T061]
Testamentary disposition
Using a will to distribute the proceeds of a life policy.
[T074]
T-filing
Using an automated (computer) system to file an organization's documents by their transaction date rather than alphabetically by customer and to substitute paper with electronic records.
[T023]
Theatrical floater
An inland marine policy covering loss or damage to the scenery, costumes and other properties of a theatrical production.
[T024]
Theft
A broad term meaning the wrongful taking of the property of another.
[T025]
Third-party
The claimant under a liability policy, so called because the first two parties are the insured and insurer, who enter into the insurance contract, which pays the third- party's claim.
[T062]
Third-party administrator
Used with self-insurance programs. The self-insurer outsources the plan administration paperwork, enrollment, check handling, etc. to a specialty firm.
[T026]
Third-party insurance
Protection against liability to a third party. The first two parties are the insured and the insurer.
[T075]
Third-party over action (or suit)
A suit filed by a third party against an employer in order to recover damages that were levied against that party.
[T027]
3-D policy
(See dishonesty, disappearance, and destruction policy.)
[T028]
Threshold level
This term applies to no-fault automobile liability provisions. No-fault was designed to reduce the time and litigation involved when two or more parties are involved in an auto accident by providing coverage with the insured's own insurer, regardless of who was actually at fault in the accident. Some states have a modified no-fault to allow an insured to take legal action against the negligent party who caused the accident when the accident exceeds a specified amount called the threshold level, or when serious bodily injury, disfigurement or death occurs. The threshold level is different by jurisdiction.
[T063]
Thrift plan
Common before 401(k) plans. A voluntary plan sponsored by an employer to give the employees a place to invest funds for retirement. Some employers match employee contributions, some do not.
[T029]
Ticket, reinsurance
A notation in the form of a separate piece of paper attached to the daily report of an insurer, setting forth the details of reinsurance that has been effected.
Tiering
Regarding insurance rating in which a substantial number of different price classes or tiers are created via the use of modern computing to identify and analyze newer rating variables (such as credit scores).
[T030]
Tight market
In the property and liability insurance business, underwriting philosophies fluctuate between periods called the tight or hard market and the soft market. The tight or hard market is the period when underwriting standards are very tight and the rates are high. Normally the hard market closely follows a soft market period where the underwriting standards had been soft and the price or rates are very low, resulting in substantial underwriting losses. The cycle swings back and forth between soft underwriting with low rates and heavy losses, to the hard market with subsequent tightening of standards and dramatic increases in price.
[T031]
Time element insurance
A coverage which pays for loss of earnings or income when business operations are interrupted, curtailed or suspended due to property loss as a result of an insured cause of loss. Also covered are loss of rents and rental value. The current commercial time element coverage forms are business income and extra expense. Extra expense covers costs incurred to continue operations at another location.
[T032]
Time limit
A specified time period or the time limit stated in the conditions section of a policy, within which a notice or proof of loss must be filed to be covered.
[T033]
Title insurance
Protection which indemnifies the purchaser of real estate against loss occasioned from defects in the legal title. A title insurance policy extends for the lifetime of the insured while owning the insured property. Largely written by insurers specializing in this class alone.
[T064]
Top-heavy plan
A pension plan or employee benefit plan that discriminates in favor of officers or highly compensated employees. Top heaviness puts limits whether a plan can remain qualified according to IRS rules. Curing top heaviness may require that limits be placed on voluntary and other contributions made to the accounts of officers and highly compensated employees.
[T034]
Tornado
A destructive and whirling wind of extreme violence which is accompanied by a funnel-shaped cloud moving rapidly over land in a narrow path. The barometric pressure may drop so severely and rapidly that buildings actually explode from within.
[T035]
Tornado insurance
Protection against damage done to property by unusually high-speed winds.
[T036]
Tort
A legal wrong arising from a breach of duty fixed by law, except under contract, causing injury to persons or property and redressible by legal action for damages.
Tort feasor
One who commits a tort.
[T037]
Tort law
The area of civil law that involves tort actions, which are defined as: a legal wrong arising from a breach of duty fixed by law, except under contract, causing injury to persons or property and redressible by legal action for damages.
Tort liability
A legal responsibility to pay a third party (claimant) because an insured's action or inaction directly caused injury or damages to that person or that person's property.
[T038]
Total disability
Inability to perform any functions of any occupation, caused by a covered illness or injury.
(See partial disability, and permanent and total disability.)
[T039]
Total loss
1) Loss of all the insured property.
2) Under a given policy, a loss involving the maximum amount for which that policy is liable.
[T040]
Tourist floater
An inland marine form which insures the baggage and other possessions of a traveler or tourist.
[T041]
Towing charges
An extension of an automobile damage policy which covers the cost of towing the insured car or providing emergency road service.
[T041a]
Town class or town grading
A 10-category ranking or schedule of public fire protection of cities and towns established in 1916. The grading is currently maintained by the Insurance Services Office for use in making fire insurance rates and to encourage local governments to maintain better fire fighting equipment and personnel. A city or town is ranked in one of the categories by receiving deficiency points for failing to meet established standards under each of these major headings: water supply, fire department, fire service communications, fire safety control, climate, and divergence between fire department and water supply. Town Class 1 is the best class (a city or town having fewer than 501 points), and Town Class 10 is the worst (more than 4,500 points).
[T042]
Town grading or town class
A 10-category ranking or schedule of public fire protection of cities and towns established in 1916. The grading is currently maintained by the Insurance Services Office for use in making fire insurance rates and to encourage local governments to maintain better fire fighting equipment and personnel. A city or town is ranked in one of the categories by receiving deficiency points for failing to meet established standards under each of these major headings: water supply, fire department, fire service communications, fire safety control, climate, and divergence between fire department and water supply. Town Class 1 is the best class (a city or town having fewer than 501 points), and Town Class 10 is the worst (more than 4,500 points).
[T067]
Toxic mold
A general reference to a variety of single-cell organisms (such as stachybotrys atra, toxic black mold) which grow in moist areas. When these molds or fungi grow in areas of a home or business, they may release spores which may create minor to severe reactions in humans. In severe cases, an infested home may have to be abandoned.
[T043]
Tractor/trailer
In insurance terms, not a farm tractor, but rather a motor truck type and the trailer to which it is attached.
[T044]
Trade association
One of the three basic forms of insurance organizations: rating bureaus, advisory organizations, and trade associations. Rating bureaus make and file rates, loss costs, rating plans, schedules, manuals, and forms for members, subscribers and service purchasers who choose to use them. Advisory organizations perform advisory functions for insurers relative to these rating bureau activities and, like rating bureaus, are licensed by state insurance departments and subject to examination and other regulation. Trade associations are cooperative organizations to protect the business interests of their member insurers, producers, adjusters, attorneys, or other groups. Either a rating bureau or an advisory organization can function as a statistical organization, and the function of advisory organizations and trade associations can overlap. Distinctions in functions can best be appreciated by understanding that, historically, rating and advisory organizations were licensed and regulated under state rating laws because of the public interest in the cooperative activities of insurers, relative to pricing and the need for regulation, in order to replace application of antitrust laws.
(See rating bureau, and advisory organization.)
[T076]
Trade ratio
The addition of the ratio of losses incurred to earned premiums, and the ratio of underwriting expenses to written premiums.
[T077]
Trading dollars
A term for describing reinsurance premium payments that are roughly equal to reinsurance loss reimbursements.
[T078]
Traditional-bond form
A type of bond used to handle workers compensation losses. The company issuing the bond (the surety) is obligated to pay any workers comp claim that is filed during the bond's term. This obligation remains even after the bond is terminated.
[T044a]
Traffic detection devices
As it relates to business or personal auto coverage, it is defined as equipment designed to detect or defeat speed or traffic control or detection devices including both radar and laser.
[T079]
Transactional filing
Using an automated (computer) system to file an organization's documents by their transaction date rather than alphabetically by customer and to substitute paper with electronic records.
[T045]
Transfer of coverage
Normally, this term applies to employee benefit plans or group insurance coverages and refers to those occasions when the benefit plan or group insurance is moved, sold, or transferred from one insurer to another.
[T046]
Transfer of risk
When the hazards of, exposures, or financial responsibility for loss is transferred or shifted from the risk to another entity. Various types of risk transfer or risk management methods are available and may include insurance policies, hold harmless and other contractual agreements, leasing mechanisms, or other alternative financing.
[T047]
Transportation insurance
Insurance on merchandise and/or cargo while it is being moved and is subject to loss or damage during transportation. This insurance may also protect while in a warehouse. Coverage is also available for property serving as either an instrument of transportation or of communication, such as bridges, tunnels and television transmission towers. The writing of this type of protection is usually within the province of marine or inland marine underwriters.
[T047a]
Traumatic injury
A physical injury caused by an accident or inflicted by an outside source; other than sickness or disease.
[T048]
Travel accident insurance
A type of life or accident policy sold at airports, bus stations and railroads to provide coverage for bodily injury, accidents or death suffered by passengers while traveling on the aircraft, bus or railroad. The coverage may be sold by ticket agents or in vending machines.
[T049]
Travel agents errors and omissions insurance
Specially designed professional liability or errors and omissions insurance to protect travel agent from losses caused by negligent acts, rendering or failing to render services, and errors and omissions of not only the named insured errors, but often, employees, tour guides, and tour operators contracted by the insured.
[T080]
Treasury listing
A list that shows the maximum liability (surety) that can be written for a federal bond.
[T050]
Treaty, reinsurance
A reinsurance agreement between an insurance company and a reinsurer, usually for one year or longer, which may be divided into two broad classifications:
1) the participating type which provides for sharing of risks between the ceding company and the reinsurer; and
2) the excess type which provides for indemnity by the reinsurer only for loss which exceeds some specified predetermined amount.
Trend factor
A trend factor is applied to the latest year of historical experience to reflect changes in insurance costs and usage that are expected to take place between that year and the year during which rates will be in effect. Insurance costs fall into two broad categories, each which may experience different trends:
Costs associated with policyholder claims: medical and vehicle damage losses, lost wages, damages to property, legal costs and
expenses incurred by companies in the ordinary course of business: wages, rents, costs of new technology.
[T051]
Trending
In order to make informed and credible predictions of future statistics, past historical data as it relates to economic and demographic influences is evaluated and then used to project results.
Triangle
An actuarial illustration that display's an insurer's historical loss development, which is shaped like a triangle due to earlier underwriting loss years have longer development than later loss years.
Triennial examination
Refers to the regulatory financial examination that should be performed on every insurer in order to determine whether the insurer is financially solvent to continue to serve its policyholders and claimants. The examination is, under NAIC guidelines, required every three years.
[T068]
Trigger
The event which determines when coverage of a liability policy applies. In an "occurrence" policy, the event is the occurrence of the injury or damage. In a "claims-made" policy, the event is the notification to the insurer or the insured, whichever comes first, of the happening of the injury or damage.
[T069]
Trigger theory
An event is recognized as an insurable loss (or occurrence) along a timeline from when damage first appears until it terminates. The continuous damage is eligible for coverage under every policy in existence during the period that damage occurred. Under this theory, each policy would cover its share of damage that occurred during the time the policy was in effect.
(See exposure theory, injury-in-fact theory and manifestation theory.)
[T070]
Tri-national Insurance Working Group
A semiofficial group of insurance experts created as a result of the North American Free Trade Agreement. The group’s focus is upon developing practices to allow for the uniform application of insurance protection throughout Canada, Mexico and the U.S.
[T052]
Trip insurance
Insurance written to cover a single shipment of household furniture, personal effects, merchandise, and livestock against loss by specified perils or "all risk."
[T053]
Trip transit insurance
Insurance written to cover a single shipment of household furniture, personal effects, merchandise, and livestock against loss by specified perils or "all risk."
[T088]
Triple bottom line
A fairly recent concept that replaces the narrower concept of a corporation's single bottom line of financial results. The newer concept views final financial results from a corporation's philosophy of its financial performance, the manner in which its operations affects the environment and its acting equitably towards other parties (such as customers and workers).
[T054]
Truckers liability
Auto liability exposures experienced by owners and operators of businesses designed to transport the goods of others by land motor vehicles for a fee. Subject to regulations by the Department of Transportation (DOT). The Insurance Services Office (ISO) has designed a special business automobile insurance for this purpose, called the truckers liability coverage form. Also available is the motor truck carriers liability coverage form.
[T055]
True group insurance
A group insurance program is one in which an entire related group of people is offered access to the same insurance coverage, normally life, health, accident, and/or disability. In a true group, coverage is offered regardless of their past medical history or current medical conditions. Because coverage is offered to an entire group, marketing and other insurer expenses are not as great, so savings are passed onto the group in the form of lower premiums. In those cases where the group insurance is being offered as an employee benefit by an employer, employers often will subsidize a portion of the premium.
[T081]
Trust
A legal document that allows one party to handle another party's property for the benefit of that party.
[T082]
Trustee
A person who is appointed to manage another party's finances, particularly in dealing with that party's creditors.
[T065]
TSA (tax-sheltered annuity)
A form of employee retirement plan for not-for-profit, governmental or charity organizations.
(See also section 403(b).)
[T056]
Turnkey insurance
A specially designed professional or errors and omissions liability insurance which includes coverage for engineering, design, products, and completed operations for contractors, architects, and/or engineers on specific construction projects.
[T057]
Twenty-four hour coverage
An emerging theory aimed at providing medical and health insurance protection in one format for both work-related and nonwork-related coverage. In theory, this would eliminate the need for workers compensation coverage and would evolve the current traditional medical or health insurance program into 24-hour or around-the-clock protection, and would possibly set the venue for national health insurance coverage.
[T057a]
Twisting
When an agent or broker uses misrepresentation to convince an insured to change insurance providers by canceling an existing policy in order to purchase a new one. The agent or broker may benefit from this via higher commissions, bonuses or incentives with the new carrier while the insured may suffer coverage gaps or inconsistencies and short-rate cancellation charges. This is considered to be an unfair trade practice.
[T058]
Typhoon
A hurricane-type storm originating in the Pacific Ocean, China Sea and the Philippines.
