A - C | D - H | I - O | P - S | T - Z

Insurance Glossary (T-Z)

• Tort - A civil wrong, other than breach of contract.
• Total Cost of Risk - A measurement of an organisations complete costs beyond just the premiums paid to insurers. Calculation methods vary, but generally include insurance premiums, service provider fees, cost of losses which are self insured or below policy deductibles, cost of loss prevention and reduction measures, administrative cost of operating the insurance and risk management program, plus any other consequential costs.
• Treaty Reinsurance - An arrangement between a reinsurer and an insurer under which the reinsurer agrees to provide coverage on all risks that fall within the terms of the terms of treaty.
• Triangulation - See Claims Triangulation
• Umbrella Liability - An insurance policy which provides coverage in excess of various primary liability policies, as well as supplementary difference in conditions coverage where the primary policy is not as broad.
• Unearned Premium - The portion of premium that an insurer had collected, but has yet to earn, because the policy still has time until it expires.
• Vicarious Liability - When a person or organisation is held liable for the negligent actions of another person or organisation, even though they were not directly responsible for the damage or injury caused. For example an employer can sometimes be held vicariously liable for the acts of a worker or contractor. See also Contingent Liability
• Ultimate Net Loss - The total amount which will be paid for a fully developed loss. The measurement may include self insured retentions, paid losses outstanding losses and IBNR
• Waiting Period - A nominated period of time (usually a certain number of hours, days or weeks) which must pass after an insured event, before an insurer is required to provide indemnity. (Also referred to as time excess).
• Waiver of Subrogation - Generally an agreement by an insurer not to pursue their right of subrogation under a policy. This would usually be agreed to because the insured had entered into a specific contract under which they were required to modify or waive their rights to pursue a third party, thereby limiting any potential for the insurer to actually subrogate those rights. See also Subrogation
• Warranty - A specific policy term which obliges the insured to undertake an act (or refrain from undertaking the act) in order for indemnity to apply. (Australia's Insurance Contracts Act limits the manner in which an insurer can rely upon a warranty to deny liability or reduce indemnity for a claim.)
• Workers Compensation to Worker Liability - See Employers Liability Insurance 
• Worker to Worker Liability - A liability exposure arising primarily on construction sites, where a contractors' employee sues the principal in an effort to obtain a common law award, which is not available under direct workers compensation claims against the contractor.
• Working Layer - That layer of insurance in which it is generally accepted that there will be a frequency of losses.
• Tail - An estimation of losses that are yet to be reported under an insurance contract. See Long Tail Business
• Takaful Insurance - Conceptually this is similar to mutual insurance in that it involves a number of participants sharing risk on a cooperative basis. Islamic scholars generally agree that Takaful, which is based on the concept of Ta'awun (i.e., mutual assistance), is consistent with Shari'ah law. Shari'ah law prohibits a Takaful operator (effectively the insurer) from investing in investments which earn interest, and certain equity investments which are haram (i.e., forbidden), such as investments in companies involved in gambling, the manufacture or sale of alcohol, pork products, munitions, restaurants or hotels.
• Time Element Coverage - US market terminology referring to coverage which is provided for the loss of use of property, rather than the actual loss of or damage to the property itself. Business interruption or consequential loss contracts, additional expenditure, loss of rentals etc are all examples of time element coverage.
• Underwriter - 1) The individual employed by the insurer to assess or "underwrite" the risks of insurance to be covered under the policy. The term dates back to the origins of Lloyd's of London, where investors or merchants agreeing to accept part of an insurance risk, would write their names underneath the original investor who had set the terms of the contract. 2) In industry jargon is also commonly used to indicate the Insurance Company.
• Uninsured Working Expenses - those costs analysed for business interruption insurance which will vary in proportion with turnover. If turnover reduces, so will expenses such as manufacturing consumables, production power requirements, freight and cartage costs etc. These uninsured working expenses are deducted from turnover to reduce the insurable gross profit value (and the premium payable).
• Utmost Good Faith - (Uberrimae Fidei) This is a basic principal of insurance which implies that both parties to an insurance contract have an obligation to act in good faith in their dealings with each other. (The Australian Insurance Contracts Act makes specific statements regarding the Duty of Good Faith both for insurers and insured.)
• Written Premium - The total amount of premium charged by an insurer during a particular period. Differs from Earned Premium because it is not allocated proportionately over the policy's duration.

Extract from "The Executives Guide To Insurance and Risk Management" by Berwick, G .  © QR Consulting 2007. 

Hutchison Rodway highly recommends this book.  Copies can be purchased from QR Consulting Website