Small Business Guide To Commercial Insurance

38 Material Misrepresentation A factual falsification made in such a manner that the insurance company would have refused to insure the risk if the truth had been known at policy issuance. A material misrepresentation gives an insurance company grounds to rescind a contract. Misquote An incorrect estimate of an insurance premium. Nonpayment of Premium Failure by the policyholder to pay the premium on a policy or pay the installment premium payments due on a policy. Nonrenewal The termination of an insurance policy on its normal expiration date. Occurrence A liability insurance policy that covers claims arising out of occur- rences that take place during the policy period, regardless of when the claim is filed. Peril Cause of loss. Personal Lines Insurance written on the personal and real property of an individual (or individuals) to include such policies as homeowners insurance and personal auto insurance, as contrasted with commercial lines. Policy A contract that states the rights and duties of the insurance com- pany and the insured.