Insurance 101 Terminology Presented for Wisconsin 4-H Youth Development Staff Youth Emphasis March 2005

Insurance Policy A written contract for insurance between an insurance company and policyholder stating details of coverage.

Primary Insurance The insurance policy that pays first when you have a loss that's covered by more than one policy.

Secondary Insurance This insurance is utilized after the primary insurance has been exhausted. For example if you are in an automobile accident with your personal vehicle, claims would be made on your personal automobile policy until the limits are exhausted and then on county insurance until those limits are exhausted.

Insured The party who stands to benefit from an insurance policy. The party insured.

Property Damage Covers damage to or loss of policyholders (insureds) property.

Liability Legally bound or responsible. Something for which one is liable; an obligation, a responsibility, or a debt.

Law Civil The body of laws of a state or nation dealing with the rights of private citizens. Tort The body of law governing negligence, intentional interference, and other wrongful acts for which civil action can be brought, except for breach of contract, which is covered by contract law.

Liability Insurance Insurance which pays and renders service on behalf of an insured for loss arising out of their responsibility to others imposed by law or assumed by contract.

General Liability Insurance Designed to protect business owners and operators from a wide variety of liability exposures. Exposures could include liability arising from accidents resulting from the insured's premises or operations, products sold by the insured, operations completed by the insured, and contractual liability.

Liability Insurance Volunteer (Agent) This insurance is designed to cover a volunteer's actions that may cause physical injury to another, or damage to another's property. If the injured party feels that their injury or the damage to their personal property resulted from the negligence of the volunteer, the volunteer may be sued. When this occurs, the volunteer will need to defend himself or herself, and if judged negligent will be responsible for the financial judgment incurred.

Liability Insurance Automobile Insurance A form of insurance that protects against losses involving autos. Examples of coverage types include: bodily injury liability, property damage liability, medical payments, and collision and comprehensive coverage for physical damage to the insured's vehicle.

Liability Insurance Umbrella Coverage Coverage for losses above the limit of an underlying policy or policies such as homeowners and auto insurance. While it applies to losses over the dollar amount in the underlying policies, terms of coverage are sometimes broader than those of underlying policies.

Liability Insurance Directors & Officers Liability Insurance (D & O) Covers directors and officers of a company for negligent acts or omissions and for misleading statements that result in suits against the company, often by shareholders.

Negligence Failure to use that degree of care which an ordinary person of reasonable prudence would use under the given or similar circumstances. A person may be negligent by acts of omission or commission or both.

Indemnify Provides financial compensation for losses.

Hold Harmless A contract by which one partys legal liability for damages is, in effect, assumed by the other so as to hold the first party without responsibility for any damage arising out of the transaction.

Personal Injury Injury to an individual's body, mind, or emotions. In some instance of a personal injury an individual or a company may be liable for the resulting suffering that the personal injury caused. Personal injuries can occur out of negligence, an intentional infliction of harm, or the injuring of another person despite any type of negligence or intent.

Product Liability A section of tort law that determines who may sue and who may be sued for damages when a defective product injures someone.

Limitations or Exclusions Limitations are exceptions to coverage and limits of coverage as contained in an insurance contract. Exclusions are a contractual provision that denies coverage for certain perils, persons, property, or locations.

Endorsement This is a clause under which the stated coverage of an insurance policy may be altered. A provision added to an insurance contract altering its scope or application.

Certificate of Insurance Written evidence that an individual is a participant in an insurance program or employee benefit plan. The certificate confirms that a master policy has been issued and may be reviewed. This confirmation is good for the day the certificate is issued.

Homeowners This insurance covers the house, the garage and other structures on the property, as well as personal possessions inside the house such as furniture, appliances and clothing, against damage to or loss of. The extent of the perils covered depends on the type of policy. The liability portion of the policy covers the homeowner for accidental injuries caused to third parties and/or their property.

Accident & Health Insurance This is insurance against injury or death because of an accident to individuals named on the policy. Accident insurance policies cover death or dismemberment, as well as hospital coverage and transportation to a hospital. Persons without accident insurance may find themselves responsible for a lifetime of round-the-clock medical care, expensive surgeries, and loss of wages.

Event Insurance Event insurance can be purchased for a particular event, such as a concert, a sports event, or even a wedding. Event insurance policies could cover anything from liability associated with your event, to a singer's tonsillitis that would force the cancellation of a concert to an unexpected blizzard that would postpone a golf tournament or a power outage that would force the rescheduling of a computer show.

Self-Insured The concept of assuming a financial risk oneself, instead of paying an insurance company to take it on. Large firms, and some counties, often self-insure frequent, small losses such as damage to their fleet of vehicles or minor workplace injuries.

Wisconsin County Mutual Insurance Corp Adams Ashland Barron Bayfield Buffalo Burnett Calumet Clark Columbia Door Douglas Dunn Florence Forest Green Green Lake Iowa Iron Jackson Jefferson Juneau Kewaunee Lafayette Langlade Lincoln Marinette Marquette Menominee Milwaukee Monroe Oconto Oneida Ozaukee Pepin Pierce Polk Portage Price Richland Rusk Sauk Sawyer Shawano Sheboygan Taylor Trempealeau Vernon Vilas Walworth Washburn Washington Waupaca Waushara Winnebago Wood Member Counties

Wisconsin Municipal Mutual Insurance Company Member Counties BrownLa Crosse Chippewa Manitowoc DaneMarathon DodgeOutagamie Eau ClaireSt. Croix KenoshaWaukesha

Remaining Counties Crawford Fond du Lac Grant Racine Rock

Information Prepared by: Dave Pulda, Risk Manager, UW System Office of Safety and Loss Prevention Debbie Beich, Risk Management Specialist, UW System Office of Safety and Loss Prevention