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Industry business cycle with recurrent periods of hard and soft market conditions. In the 1950s and 1960s, cycles were regular with three year periods each of hard and soft market conditions in almost all lines of property/casualty insurance. Since then they have been less regular and less frequent.

Covers damage to or loss of policyholders’ property and legal liability for damages caused to other people or their property. Property/casualty insurance, which includes auto, homeowners and commercial insurance, is one segment of the insurance industry. The other sector is life/health. Outside the United States, property/casualty insurance is referred to as nonlife or general insurance.

Documents showing the insurance company that a loss occurred.

Covers professionals for negligence and errors or omissions that injure their clients.

Protects manufacturers’ and distributors’ exposure to lawsuits by people who have sustained bodily injury or property damage through the use of the product.

A section of tort law that determines who may sue and who may be sued for damages when a defective product injures someone. No uniform federal laws guide manufacturer’s liability, but under strict liability, the injured party can hold the manufacturer responsible for damages without the need to prove negligence or fault.

Interest rate that banks charge to their most creditworthy customers. Banks set this rate according to their cost of funds and market forces.

Market for new issue securities where the proceeds go directly to the issuer.

In a reinsurance transaction, the insurance company that is reinsured.

The total premiums on all policies written by an insurer during a specified period of time, regardless of what portions have been earned. Net premiums written are premiums written after reinsurance transactions.

The sum of the face amounts, plus dividend additions, of life insurance policies outstanding at a given time.

The price of an insurance policy, typically charged annually or semiannually.

The particular location of the property or a portion of it as designated in an insurance policy.

Network of medical providers which charge on a fee-for-service basis, but are paid on a negotiated, discounted fee schedule.

Policies that cover property loss and liability arising from pollution-related damages, for sites that have been inspected and found uncontaminated. It is usually written on a claims-made basis so policies pay only claims presented during the term of the policy or within a specified time frame after the policy expires.

Coverage for businesses operating abroad against loss due to political upheaval such as war, revolution, or confiscation of property.

The amount of money remaining after an insurer’s liabilities are subtracted from its assets. It acts as a financial cushion above and beyond reserves, protecting policyholders against an unexpected or catastrophic situation.

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

Health insurance policy that allows the employee to choose between in-network and out-of-network care each time medical treatment is needed.

Property/casualty insurance products that are designed for and bought by individuals, including homeowners and automobile policies.