Small Business Guide To Commercial Insurance

36 Hazard A circumstance that increases the likelihood or potential severity of a loss. Indemnity In a property and casualty contract, the objective is to restore an insured to the same financial position after the loss that the insured had prior to the loss. In the most basic sense, indemnity is compensa- tion for a loss. Independent Adjuster A person or organization that provides claim adjusting services to different insurers on a contract basis. Insurable Interest Any interest (most commonly ownership) that a person, company, or corporation has in a subject of insurance such as a business, build- ing, or auto, which can be damaged and may cause the person, company, or corporation financial loss or other tangible deprivation. Generally, an insurable interest must be demonstrated when a policy is issued and must exist at the time of loss. Insurance A method of shifting risk from a person, business, or organization to an insurance company in exchange for the payment of premium. The insurance company commits to be responsible for covered losses. Insured The policyholder(s) entitled to coverage under an insurance policy. Insurer The insurance company who issues insurance and agrees to pay for losses and provide covered benefits. Insuring Agreement The portion of an insurance contract that describes what is covered. The insuring agreement usually states the perils insured against, the person(s) and/or property covered, the property locations, and the period of the contract.