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| EMPLOYERS LIABILITY INSURANCE—coverage against common law liability of an employer for injuries to employees (as opposed to statutory WORKERS COMPENSATION coverage). It is included in the Workers Comp policy as Part Two and complements the statutory WC coverage. How much this part of the WC policy comes into play can vary state-to-state, depending on how the state's workers comp law is written—specifically, how effective the EXCLUSIVE REMEDY aspect of the law is. A very effective WC law should minimize the number of Employers’ Liability claims. |
| ERRORS AND OMISSIONS—(See PROFESSIONAL LIABILITY) |
| EXCESS INSURANCE—(a) coverage that applies on top of underlying insurance. Excess insurance does not pay until the PRIMARY insurance exhausts its limit. (b) That portion of a LINE that exceeds the company's NET LINE or RETENTION. |
| EXCESS LIABILITY INSURANCE—a liability coverage form that provides additional insurance above underlying policy limits, but does not necessarily provide broader coverage (compare to UMBRELLA coverage). The excess policy's provisions may match the underlying policies' (often called a "following form"), or it may be narrower, or it may be broader in some ways and narrower in others. |
| EXCLUSION—a provision in an insurance policy or bond referring to PERILS or property for which no insurance is afforded. The most common reasons for exclusions are exposures not common to most insureds (which can often be added by endorsement); uninsurable exposures (e.g., WEAR & TEAR or illegal activities), catastrophic exposures (e.g., war or nuclear), and exposures that are typically covered by other policies (e.g., homeowners policies exclude liability arising from use of an auto, which is covered by an auto policy). |
| FLAT CANCELLATION—cancellation of a policy as of the policy effective date, so that there is no earned premium, the effect being as though the policy was never written. |
HAZARD—refers to physical conditions which may create or increase the probability or potential severity of a loss due to a given PERIL. For example, faulty wiring is a hazard, because it increases the chances of a fire loss. (See MORAL HAZARD and MORALE HAZARD)
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