Care, Custody and Control
A term used primarily in liability coverages which refers to property belonging to another but which is legally in the insured's possession or under his control.

Cargo
Goods being transported, such as the load of a truck or the goods being carried by a ship. The cargo of a ship does not include the equipment needed to operate the ship.

Cash Surrender Value
When an insured wishes to cancel a life insurance policy before the full term, the policy may have a cash value which is stipulated in the policy. The longer the policy is in force, the higher the cash value is likely to be. It is a sum paid back by the life insurance company to the insured when an insured requests the termination of the policy.

Casualty Insurance
Loosely used to describe an area of insurance not particularly or directly concerned with life insurance, fire insurance or automobile insurance. Most frequently refers to liability, burglary and plate glass insurance but may include Fidelity and Surety.

Cede
An insurer cedes part of a risk to a reinsurer when it transfers or reinsures part of the risk.

Certified Copy
Reproduction of a document, that authority having custody of original signs and attests as a true, genuine and authentic copy.

Canadian Chartered Insurance Broker (C.C.I.B.)
A professional designation earned by examination following study courses.

Chartered Insurance Professional (C.I.P.)
A professional designation (Canada) earned by the successful completion of several educational requirements as designated by the Insurance Institute of Canada.

C.C.I.B.
See Chartered Insurance Broker.

C.I.P
See Chartered Insurance Professional.

Civil Code
1) The civil law of the Province of Quebec.
2) The reduction of law to a set of rules. In some countries for example,
France, most of the laws of the country were at one time reduced to a set of rules after the style of the Roman Code although these too have subsequently been subject to certain new statutes. In some jurisdictions, certain sections of the law are reduced and simplified to a "Civil Code."

Civil Commotion
Disturbance involving a large number of individuals. An uprising of people creating a prolonged disturbance.

Claim
Strictly speaking, a claim is the exercising of the right of an insured to be indemnified by his insurance company for damage suffered. It is frequently used, however, to indicate the amount of the claim.

In practice, it is any notification of a possible loss under an insurance policy whether any payment is likely to follow or not.

For every claim that is reported, the insurance company must set aside reserves equal to the figure which it is anticipated the claim will cost.

Claimant
One who makes a claim.

Claims Examiner
An employee of an insurer who handles and is responsible for incoming claims.

Claims Made Basis
Provision in some insurance and re insurance contracts covering only claims made during term of the contract.

Clause
Words in a policy which describe certain specifications, limitations or modifications.

Co-insurance Clause
A clause in an insurance policy requiring an insured to carry a certain percentage, usually 80, 90 or 100 per cent of insurance in relation to the value of the property insured. If the insured fails to do this, then he agrees to be a self insurer of all losses large or small in the same ratio as his failure to comply with the percentage required, is related to the insurance required. For example, a building valued at $100,000 with an 80 per cent co-insurance clause would require insurance coverage of $80,000. If coverage is carried for only $40,000 then the insured is a self insurer or coinsurer for $40,000 of the $80,000, and the insurance company would be responsible for the same amount. This ratio would apply even if a loss were only $5,000. Then the insurance company would pay $2,500 and the balance or coinsurance penalty of $2,500 would be borne by the insured.

Coinsurer
Two or more persons or companies who may be sharing a loss. A company whose policy covers the same risk as that of one or more other companies, is a coinsurer whether the policies are written separately or together.

Collapse
Falling in of a building.

Collision
A vehicle or a ship collides when it strikes another object or another vehicle or ship. Collision insurance insures against loss so caused.

Collusion
A secret agreement between persons to defraud another, e.g., an insured driver of an automobile and his passenger may misrepresent the facts of an accident in order to have monies paid to the passenger under the insured's automobile insurance policy.

Commercial Property Floater
Property used in a business which requires it to be moved from place to place, may be insured on one of the forms of commercial property floaters. A television studio, for example, may require insurance on their equipment even though it may be out of the regular studio much of the time. In most instances, these are written on special forms suited to the particular need such as contractor's equipment floater, inland marine block policy, jeweler's block policy, salesman's floater policy, etc.

Common Carrier
One who offers to transport merchandise for hire and must accept shipments from anyone who wishes to use the services. Different laws and rules govern common carriers than do private or contract carriers who only transport the goods of those with whom they have made agreements.

Common Law
American, Canadian and British law derives its force and authority from the universal consent and practice of the people over the years. Certain aspects of the law are written into statutes. The underlying principles and usages and rules of action which do not rest for their authority on this statutory or legislative law are to be found in principles set forth by decisions of the Courts over the years.

Many rules were promulgated in feudal times. During the reign of Henry II (beginning 1154 AD) the King's Courts became organized and common law began to evolve. The Courts met frequently and when one Court made a decision in connection with a certain issue, that decision was followed by the other courts and became the law unless modified by statue or by gradual evolution.

Comprehensive General Liability Policy
A policy particularly suited to a manufacturer, contractor or large wholesaler or retailer providing broad coverage for claims made against him for bodily injury or damage to property of others for which he may become liable and which arise out of his entire business operation.

Comprehensive Personal Liability
A form of liability insurance for individuals which insures the policyholder in the event he has become liable to pay money for damage or injury he has caused to others. This form does not include automobile liability, but does cover almost every activity of the policyholder except those which arise from the operations of a business. Hence "Personal" Liability.

Conditions
The general terms or requirements upon which the insurance is based. For the mutual understanding of the parties the conditions will commonly state such matters as how the policy can be cancelled or renewed, provisions with respect to change of the insured's interest, provisions as to what an insured should do in the event of a loss, and conditions as to what he should do subsequent to a loss etc.

A condition precedent is one that must be fulfilled prior to the general fact at stake. The insured, for example, is required to give notice of a claim and fulfill certain other obligations as a condition precedent to his receiving a settlement.

A condition subsequent is one which is applicable subsequent to the event, as for example, the insured is required to cooperate in the disposition of the claim and to cooperate, other than in a monetary way, to assist to recover from anyone who is responsible for the loss.

Conditions of the Contract
Articles in contract defining or describing terms, responsibilities of owner and contractor, performance and payment schedules, and the like.

Condominium
Is the individual ownership of a single unit in a multiple unit building or group of buildings, together with a percentage interest in that part of the total property owned jointly by all unit owners. In an apartment building, each apartment would be a unit and the stairways, pathways and parking areas would be in common ownership. Condominium property requires special insurance treatment.

Consequential Loss
The word "consequential" means something following as an effect or result. It is an indirect result of the occurrence that causes the loss.

The difference between a direct loss and a consequential loss can be seen in the destruction of a power station by wind. The damage to the power station is a direct loss by wind. There is actual physical damage directly
resulting. The destruction of the power station also interrupts the generation of power by the station. For example, a cold storage plant is without electrical power. Foodstuffs spoil as a result or as a consequence. This is a consequential loss, not a direct loss.

Consideration
The inducement to a contract; the cause, motive or price which induces a contracting party to enter into an agreement, act or forbearance or promise thereof. It is an essential part of a binding contract. Consideration is either expressed or implied.

The money, or whatever is being used in substitution of money, paid for the article or contract is "the consideration."

Constructive Total Loss
A partial loss but where the damage is so extensive that repairs would cost as much or more than the repaired property would be worth, or the limit of insurance.

Contract
An agreement made between two or more persons, which is intended to be enforceable at law, and is constituted by the acceptance by one party of an offer made to him by the other party, to do or to abstain from doing some act. The offer and acceptance may either be expressed or inferred by indication in the conduct of the parties.

Contract Documents
Agreement, addenda, supporting documents, general conditions, supplementary conditions, specifications and drawings and modifications to an agreement.

Contractor's Liability Insurance
Insurance protecting contractor from defined liability claims arising from contractor's operations.

Contractual Liability
Liability assumed by a contract either written or implied. Legal liability policies are based upon liability in tort or negligence and have very little coverage normally for contractual liability (with a possible exception of such matters as sidetrack agreements, etc.) However, contractual liability may be covered in many instances as an additional risk with an additional premium.

Contributory Negligence
Many accidents are the fault of both parties who are involved in the occurrence. The plaintiff who sues another party for damages also may be guilty of some negligence, which is a concurrent cause of the damage. Such a party is guilty of contributory negligence.

Cover
To protect with insurance, or the insurance protection provided.

Coverage
The nature of protection afforded by a particular policy. Can be used at times interchangeably with "insurance" or "protection" as "fire coverage" or "fire protection" or "fire insurance."

Credit Report
A report provided by a commercial credit reporting company which provides details on the reputation and financial strength of an individual or corporation.

Custody
Immediate control that an authority exercises over property or people.

D

Daily Report
Copy of the policy or bond for company or agency records. This term may also include all correspondence, notes, inspection reports, credit reports, etc. pertaining to the policy.

Data Processing (Equipment Insurance)
A special insurance usually on an all risks basis. Covers physical loss and loss from business interruption if the damage necessitates shutdown of operations.

Debris Removal
A provision in an insurance policy most commonly found in fire insurance providing indemnification for the cost of removal of the debris after a fire.

Declaration
Statement, signed by the insured, warranting that information given by him is true.

Decline
To refuse acceptance of an insurance application.

Deductible
An agreed specified sum to be deducted from the amount of loss and assumed by the insured. See also Franchise.

Deductible Clause
A clause defining the amount of loss for which insured is liable; defines insurer's and insured's contributions to cover losses.

Depreciation
Reduction in value of property through use, aging, deterioration and obsolescence.

Direct Billing
A system for the collection of premiums whereby the insurance company "directly bills" he insured for the premium in lieu of the conventional collection of premiums by the agent or broker. The insurer sends a statement to the agent, usually monthly, recording the premiums collected directly, and credits the agent with the commission on those items.

Directors and Officers Liability Insurance
Protection for officers and directors of a corporation against damages resulting from negligent or wrongful acts in the course of their duties. Also covers the corporation for expenses incurred in defending lawsuits arising from alleged wrongful acts of officers or directors. These policies always require the insured to retain part of the risk uninsured.

Disability
Inability to carry on in one's normal occupation due to accident or sickness.

Disclosure
Act of making known something known.

Driver Training Credit
To encourage driver education courses at schools and colleges, many insurers grant premium rebates to applicants for private passenger automobile insurance who have successfully completed an approved training program.

Dwelling
The living quarters occupied, or intended for occupancy, by a household.