Small Business Guide To Commercial Insurance

41 Short Rate Cancellation A cancellation initiated by policyholder request in which the pre- mium returned is subject to an administrative penalty. Sistership Liability Exists when a manufacturer refuses to withdraw a product as ordered by a government agency or company management. Once a defective product has been identified and recalled, an insurance company excludes all other claims arising from the defective product due to the negligent failure of the company to take the product off the market. Split Limits The technique for expressing limits of liability coverage under a par- ticular insurance policy by stating separate limits for different types of claims growing out of a single event or combination of events. Coverage can be split (limited) per person, per occurrence, between bodily and property damage, or in other ways. Subrogation The process of recovering the amount of claim damages paid out to a policyholder from the legally liable party. When a company pursues the legally liable third party, they are required to include the policy- holder’s deductible in the recovery process. Third Party An individual other than the policyholder or the insurance com- pany who has suffered a loss and may be able to collect compensation under the policy due to the negligent acts or omissions of the policy- holder. Third Party Over The legal doctrine that involves an injured employee bringing suit against a third party who (for one reason or another) is able to bring an action against the employer.