Business Insurance Glossary

A | B | C | D | E | F | G | H | I | L | M | N | O | P | Q | R | S | T | U | W

Improvements and betterments

Any changes made by a tenant that may not be legally removed. These improvements become part of the realty and require special insurance consideration, as some policies cover betterments under the building coverage while others consider betterments to be contents.

Incontestability provision

An insurance and annuity provision that limits the time within which the insurer has the right to void the contract on the ground of material misrepresentation in the application for the policy.

Incurred but not reported losses (IBNR)

Insured losses that have occurred but have not been reported to a primary insurance company.

Incurred claims

The total number of claims associated with insured events/situations occurring during a given time period.

Incurred losses

The total dollar amount of losses associated with insured events/situations occurring during a given time period. A portion of incurred claims and losses represent insurers’ estimates of the final costs of pending claims that are still open during the reporting period, as well as estimates of losses associated with claims that have yet to be reported.

Indemnification

Provides financial compensation for a loss with the intent to restore a person or entity to the financial position enjoyed before the loss.

Independent agent

An insurance agent that usually represents multiple insurance companies as opposed to a captive (or exclusive) agent who is contractually obligated to represent only one insurance company.

Indirect damage

A term used to describe a consequential loss resulting from a direct loss to property. For example, the loss of use of a building that was damaged by fire could result in loss of income and additional expense for leasing temporary quarters during repair of the damaged building. Coverage for indirect damage is sometimes referred to as 'time element' insurance.

Inland marine insurance

Primarily covers property in transit such as from warehouse to warehouse or warehouse to retail store, as well as other people's property left on your business premises, such as clothes left at a dry cleaning business or an employee's personal effects left in the company locker room.

Insurable interest

Exists when an individual would suffer an economic loss as the result of damage to property or bodily injury.

Insurance fraud

Insurance fraud is any act or omission with the purpose of illegally obtaining a property and casualty insurance benefit. This definition encompasses the full range of fraudulent acts, from completely fabricated claims, to inflation or padding of legitimate claims, to false statements on insurance applications, to internal fraud.

Insurance score

A person’s insurance score is influenced by their credit history, and is used in some states to determine whether a policy is written, and/or the premium charged.

Insurance to value

The amount of insurance written on property is approximately equal to its value. An insured most always wants to insure all property to value.