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Your Risk

As operating costs continue to rise, insurance coverage at the right price alows management to spend more of the things that visitors can rave about. Learn about some claims that have happened to hotel owners just like you:

This page provides a glossary of insurance terms and definitions that are commonly used in the insurance business.

A | B | C | D | E | F | G | H | I-J-K | L | M-N-O | P-Q | R | S-T | U-V-W-Y-Z

Actual Cash Value - Cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence. For example, a 10-year-old sofa will not be replaced at current full value because of a decade of depreciation.

Adjuster - A representative of the insurer who seeks to determine the extent of the insurer's liability for loss when a claim is submitted.

Appraisal - A survey by a claims representative or claims appraiser estimating the amount of damage to property and the cost to repair or the determination of a complete loss.

Bodily Injury - Any physical injury to a person. The purpose of liability insurance is to cover bodily injury to a third party resulting from the negligent or unintentional acts of an insured.

Broker - A licensed person or organization paid by you to look for insurance on your behalf.

Burglary - Coverage against loss as a result of forced entry into premises.

Business Interruption Insurance - Also Loss of Use Insurance. Compensation for loss caused because the policyholder has lost the use of his property where a business is closed to its customers or operations are scaled down as a result of a covered event.

Calendar/Accident Year - The accumulation of loss data on all accidents with the date of occurrence falling within a given calendar year. The earned premium is the same as in calendar year.

Cancellation - The termination of insurance coverage during the policy period. Flat cancellation is the cancellation of a policy as of its effective date, without any premium charge.

Catastrophic Risk - The risk of a large loss by reason of the occurrence of a peril to which a very large number of insured are subject.

Claim - A formal request for payment related to an event or situation made by the insured to an insurer that under the terms of a policy, a loss may be covered.

Claimant - The first or third party. That is any person who asserts right of recovery.

Coinsurance - In property insurance, requires the policyholder to carry insurance equal to a specified percentage of the value of the property to receive full payment on a loss.

Collision Coverage - Reimburses you for physical damage to the insured's automobile sustained in a collision with another car or with any other object, movable or fixed, (for example, you accidentally backed into another object while pulling out from a parking stall and causing damage to the bumper and fender of your covered automobile).

Commercial Lines - Refers to insurance for businesses, professionals and commercial establishments.

Comprehensive Coverage - Auto insurance coverage providing protection in the event of but not limited to fire, theft or malicious mischief of the insured car. For example, fire damage or a cracked windshield would be covered under the comprehensive section.

Coverage - The scope of protection provided under an insurance policy. In property insurance, coverage lists perils insured against, properties covered, locations covered, individuals insured, and the limits of indemnification. In life insurance, living and death benefits are listed.

Deductible - The amount of the loss which the insured is responsible to pay before benefits from the insurance company are payable.

Endorsement - Amendment to the policy used to add or delete coverage.

Equipment Breakdown Insurance - Also Mechanical Breakdown Insurance. Covers losses resulting from the malfunction of boilers and other machinery. This coverage is usually excluded from property insurance creating the need for this separate product.

Evidence of Insurability - Proof that a person is an insurable risk.

Exclusion - Certain causes and conditions, listed in the policy, which are not covered.

General Liability Insurance -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. Insurance coverage that offers protection against claims alleging that a property owner's negligence or inappropriate action resulted in bodily injury or property damage to another party.

Insured - The policyholder - the person(s) protected in case of a loss or claim.

Insured to Value - The amount of insurance written on property is approximately equal to its value. An insured should work with their agent to insure all property to its accurate value.

Insurer - The insurance company.

Liability Insurance -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. Insurance coverage that offers protection against claims alleging that a property owner's negligence or inappropriate action resulted in bodily injury or property damage to another party.

Liability Insurance (Auto) - Coverage for a policyholder's legal liability resulting from injuries to other persons or damage to their property as a result of an auto accident.

Limit - Also Policy Limit. Maximum amount a policy will pay either overall or under a particular coverage.

Loss Control - All methods taken to reduce the frequency and/or severity of losses including exposure avoidance, loss prevention, loss reduction, segregation of exposure units and noninsurance transfer of risk. A combination of risk control techniques with risk financing techniques forms the nucleus of a risk management program. The use of appropriate insurance, avoidance of risk, loss control, risk retention, self insuring, and other techniques that minimize the risks of a business, individual, or organization.

Loss - The dollar amount associated with a claim.

Loss of Use Insurance - Also Business Interruption Insurance. Compensation for loss caused because the policyholder has lost the use of his property where a business is closed to its customers or operations are scaled down as a result of a covered event.

Mechanical Breakdown Insurance - Also Equipment Breakdown Insurance. Covers losses resulting from the malfunction of boilers and other machinery. This coverage is usually excluded from property insurance creating the need for this separate product.

Medical Payments - Will pay reasonable expenses incurred for necessary medical and /or funeral services because of bodily injury caused by accident and sustained by you or any other person while occupying a covered automobile.

Negligence - Failure to act within the legally required degree of care for others, resulting in harm to them.

Policy - The written contract of insurance, or the certificate thereof, by whatever name called, and including all clauses, riders, endorsements, and papers attached thereto and made a part thereof.

Policy Limit - Also Limit. Maximum amount a policy will pay either overall or under a particular coverage.

Premium - The amount of money an insurance company charges for insurance coverage.

Quote - An estimate of the cost of insurance, based on information supplied to the insurance company by the applicant.

Renewal - The automatic re-establishment of in-force status for a policy based on the payment of another premium.

Replacement Cost - The dollar amount needed to replace damaged personal property or dwelling property without deducting for depreciation but limited by the maximum dollar amount shown on the declarations page of the policy. By this method of determining value, damages for a claim would be the amount needed to replace the property using new materials.

Scheduled Property - Listing specific personal property for a stated insured value. This is usually considered for items that are subject to limited coverage, such as jewelry, sports equipment, art or collectibles

Subrogation - The right of an insurer who has taken over another's loss also to take over the other person's right to remedies against a third party.

Total Loss - A loss of sufficient size that it can be said no value is left. The complete destruction of the property. The term also is used to mean a loss requiring the maximum amount a policy will pay.

Umbrella Policy - Coverage for losses above the limit of an underlying policy or policies that extends the terms of a regular insurance policy once coverage limits for the regular policy have been reached.

Underwriter - The individual trained in evaluating risks and determining rates and coverages for them.

Underwriting - The process of identifying and classifying the degree of risk represented by a proposed insured.

Workers Compensation Insurance - Coverage providing benefits for employee job-related injuries or diseases.

Insurance programs are underwritten by "A- or higher" rated carriers to ensure financial security and franchisor compliance.
Administered by ARM Multi Insurance Services & Sequoia Insurance Company.
CA License #OC73841

  
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