(RPLU) Professional Liability Insurance:
Intro - Definitions
Aggregate Limit - answer✔The maximum amount the insurer will pay within a specific policy period for
all of the claims incurred under an insurance policy
Allocatoin - answer✔The determination of the portion of the loss that the policy covers when less than
100 percent of the loss is covered or when some defendants are covered by the policy and others are
not
Amendment - answer✔A written document that revises the provisions of an insurance policy. (also
called endorsement or rider)
Anti-Stacking Provision - answer✔A policy provision that ties all claims related to one wrongful act back
to the policy in effect at the time the first claim was made and that restricts coverage to the limits
applicable under the policy in effect at the time the claim was first made
Application Severability - answer✔A policy provision that limits the effects of a breach of an application
representation to the culpable insureds and that protects innocent insureds from the actions of the
culpable parties
Awareness Provision - answer✔A policy provision that allows insureds to notify the insurer of
circumstances they believe will give rise to future claims (also called the notice of potential claim or
circumstance or the discovery clause)
Base Rate - answer✔The rate per unit of insurance that is based on criteria specific to a particular line of
coverage and that is a component of a PLI rating plan used to determine PLE premiums, before
premiums are adjusted for the limits of liability and other considerations
Bilateral Extended Reporting Period (ERP) - answer✔An extension of the time period within which claims
may be reported beyond the policy expiration date for any claims arising from incidents that happened
after the retro date and before the expiration date of a claims-made policy and that is offered when
either the insurer or insured cancels or does not renew a policy (also called a two-way ERP)
Broad Form Nuclear Exclusion - answer✔An exclusion attached to an insurance policy that excludes
exposures related to nuclear energy
Claim - answer✔an allegation and demand for some kind of relief, such as money or services (Definition
may vary by policy)
Claims-Made Policy - answer✔A form of liability coverage that is triggered IF (1) an event takes place
after the retro date but before the expiration of coverage and (2) the claim is made against the insured
while the policy or any applicable Extended Reporting Period (ERP) coverage is in effect
Claims-Made and reported Policy - answer✔A form of claims-made coverage that requires that the claim
not only be made but also reported during the same policy period
Claims Reporting - answer✔The insured's notification to the insurer of a claim made against the insured
Commercial General Liability (CGL) Insurance - answer✔A type of insurance that provides coverage for
commercial risks for losses arising out of business operations involving bodily injury and property
damage, except those specifically excluded or limited within the coverage form or by endorsement (may
include advertising injury/personal injury coverage)
Conditions - answer✔A section of an insurance policy that establishes the responsibilities that the
insured must meet for coverage to apply and that may limit or qualify an insurer's promises (General
Rules)
Consent to Settle Provision - answer✔A policy provision that requires the insurer to obtain the insured's
consent before offering to settle claims made under a duty to defend policy (In a duty to pay policy, the
insured must obtain the insurer's consent before entering into any settlement)
Contractual Breach - answer✔A violation of a contract potentially resulting in damages that may or may
not be insured under a PLI policy
Coverage Form - answer✔The core of the insurance policy that includes the insuring agreement,
definitions, limits, and exclusions that define policy coverage
Dec Page - answer✔A section of an insurance policy, usually the first page, that provides info about the
property, person(s), or activity(ies) that are insured; policy limits; deductibles; and coverages (Coverage
Summary)
Deductible - answer✔A portion of the loss that the insured must bear and that may apply to the
indemnity payment, defense costs, or both (Insurer typically pays the loss and then collects the
deductible form the insured)
Defense-Only Provision - answer✔A policy provision indicating that the insurer provides coverage for
defense but NOT for damages
Definitions - answer✔A section of an insurance policy that defines terms used throughout the policy
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