Business Insurance Glossary

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Occupancy

The type of building use and the nature of its contents. It is an important factor in calculating rates and determining the limit of insurance a company is willing to provide on a property.

Occupational accident

An accident occurring over the course of one's employment that was caused by inherent or related hazards.

Occupational disease

An illness that occurs from a person's place of employment or over the course of employment.

Occupational Safety and Health Act (OSHA)

A federal statute that establishes safety and health standards on a nationwide basis.

Occurrence

An event that leads to an incurred loss.

Occurrence coverage

A policy providing coverage only for injury or loss that occurs during the policy period, regardless of when the claim is made. For example, a claim made after expiration of a policy would be covered if the injury or loss occurred during the time the policy was in force. (See Claims-Made Coverage for comparison.)

Off balance sheet risk

Risk inherent in insurance companies that are not apparent by viewing the insurer’s balance sheet. Examples of off balance sheet risk are excessive rates of growth, imprudent underwriting, and contingent liabilities.

Off-premises

Located away from a listed location. Coverage is available to protect your property while it is away from the insured premises.

Ordinance or law coverage

In many jurisdictions, once a building or structure has been substantially damaged or destroyed, even if the cause of loss is covered by a property insurance policy, significant additional expenses may be incurred by the insured as a result of local ordinances or laws. An unendorsed property policy does not protect the insured for those additional costs required by law and for which the insured has no option but to comply with if he/she wishes to remain in operation at that location. Coverage may be obtained for losses that result from the enforcement of laws or ordinances which do not permit restoring property to the same condition as existed prior to damage. The endorsement available is titled: Ordinance or Law Coverage. These types of losses may result from:

  • Loss of value of an undamaged portion of the existing property that must be destroyed (not directly from a covered cause of loss) from the operation of building or zoning laws
  • Costs of demolition of the undamaged portion of the property; AND
  • Increased expenses to:
    • Replace the property so as to comply with current building, zoning or land use laws or ordinances.
    • Repair the undamaged property so that it complies with current building, zoning or land use laws or ordinances.