Small Business Guide To Commercial Insurance

35 Endorsement A written agreement that changes the terms of an insurance policy by adding or subtracting coverage. Effective Date The starting date of an insurance policy: the date the policy goes in to force. Exclusion A contractual provision in an insurance policy that denies or restricts coverage for certain perils, persons, property, or locations. Experience Modification The adjustment of premium resulting from the use of experience rating. Experience rating plans reflect an insured’s past loss experi- ence (usually from the past three years) and uses this experience to modify and determine the premium for the current policy year. Expiration Date The termination date of coverage as indicated on an insurance policy. First Party The policyholder (insured) in an insurance contract. Flat Cancellation Cancellation that takes place on the policy effective date. No premium charge is made; however, other charges (i.e., service) may apply. Fraud An intentionally deceptive act committed to obtain an unfair or unlaw- ful advantage. Fraud usually involves monetary gain. Frequency The number of times a loss occurs.