Dictionary of Insurance Terms -E-

-E-

• Early Retirement: Retirement of a
  participant prior to the normal retirement date, usually with a reduced
  amount of annuity. Early retirement is generally allowed at any time during
  a period of 5 to 10 years preceding the normal retirement date.


• Earned Income: Employment income derived
  from salary, wages, commissions, or fees.


• Earned Premium: The part of the total
  property/casualty policy premium which applies to the portion of the policy
  period which has already expired.


• Earned Premium: The portion of a premium
  which is the property of an insurance company, based on the expired portion
  of the policy period. E.g., a $300 premium for a one year policy beginning
  July 1 would amount to an earned premium of $150 the following January
  1.


• Earned Premium: That portion of a policy’s
  premium payment for which the protection of the policy has already been
  given. For example, an insurance company is considered to have earned 75
  percent of an annual premium after a period of nine months of an annual
  term has elapsed.


• Earnings Test (retirement
  test): Determination of the amount of Social Security benefits payable
  to a beneficiary after adjusting for earnings. The amount of earnings allowed
  before his or her benefits is indexed annually; benefits are reduced by
  $1 for every $3 of earnings (beginning in 1990) above the earnings test
  threshold.


• Economic Loss: The estimated total cost,
  both insured and uninsured, of mishaps (such as motor vehicle accidents,
  work accidents, and fires); includes such factors as property damage, funeral
  expenses, wage loss, insurance administration costs, and medical, hospital
  and legal costs.


• Effective Date: The date on which the
  insurance under a policy begins.


• Elements of a Negligent Act:
  Four elements an injured person must show to prove negligence: existence
  of a legal duty to use reasonable care, failure to perform that duty, damages
  or injury to the claimant, and proximate cause relationship between the
  negligent act and the infliction of damages.


• Elimination Period: A period of
  time between the period of disability and the start of disability income
  insurance benefits, during which no benefits are payable. (See Waiting
  Period.)


• Elimination Period: A specified
  number of days at the beginning of each period of disability during which
  no disability income benefits are paid. The elimination period may be as
  short as a few days or as long as one year or more.


• Embezzlement: Fraudulent use or taking
  of another’s property or money which has been entrusted to one’s care.


• Employee Dishonesty
  Coverage Form: Commercial crime insurance form drafted by the Insurance
  Services Office that covers the loss of money, securities, and other covered
  property because of any dishonest act of a covered employee or employees.


• Employee
  Retirement Income Security Act (ERISA): Legislation passed in 1974
  applying to most private pension and welfare plans that requires certain
  minimum standards to protect participating employees.


• Endorsements: An additional piece of
  paper, not a part of the original contract, which cites certain terms and
  which, when attached to the original contract, becomes a legal part of
  that contract.


• Endorsement: An amendment of the policy
  usually by means of a rubber stamp or rider.


• Enrolled Actuary: A person who performs
  actuarial service for a plan and who is enrolled with the Federal Joint
  Board for the Enrollment of Actuaries.


• Environmental
  Impairment Liability Insurance: A form of insurance designed to cover
  losses and liabilities arising from damage to property by pollution.


• Equities: Investments in the form of ownership
  of property, usually common stocks, as distinguished from fixed income
  bearing securities, such as bonds or mortgages.


• Equity in the Unearned
  Premium Reserve: Amount by which an unearned premium reserve is overstated
  because it is established on the basis of gross premium rather than net
  premium.


• ERISA: See Employee Retirement Income
  Security Act.


• Errors and Omissions Insurance:
  Liability insurance policy that provides protection against loss incurred
  by a client because of some negligent act, error, or omission by the insured.


• Estate: The assets and liabilities of a person
  left at death.


• Estate Planning: Developing a plan
  to transfer all of your property from one generation to the next or within
  a generation .


• Estoppel: Legal doctrine that prevents a
  person from denying the truth of a previous representation of fact, especially
  when such representation has been relied on by the one to whom the statement
  was made.


• Excess and Surplus Insurance:
  (1) Insurance to cover losses above a certain amount, with losses below
  that amount usually covered by a regular policy. (2) Insurance to cover
  an unusual or one-time risk, e.g., damage to a musician’s hands or the
  multiple perils of a convention, for which coverage is unavailable in the
  normal market. (See also “Umbrella liability” and “surplus lines.”)


• Exclusions: Specific conditions or circumstances
  listed in the policy for which the policy will not provide benefit payments.


• Exclusive Agent: An agent who is employed
  by one and only one insurance company and who solicits business exclusively
  for that company.


• Exclusive Remedy Doctrine:
  Doctrine in workers compensation insurance which states that workers compensation
  benefits should be the exclusive or sole source of recovery for workers
  who have a job related accident or disease; doctrine has been eroded by
  legal decisions.


• Exclusion or Exception: Specified
  conditions or circumstances, listed in the policy, for which the policy
  will not provide benefits.


• Expense Loading: See Loading.


• Expense Ratio: The ratio of a company’s
  operating expenses to premiums.


• Experience: A term used to describe the
  relationship, usually expressed as a percent or ratio, of premium to claims
  for a plan, coverage, or benefits for a stated time period.


• Experience Modification
  Factor: Used in workers compensation rating to reflect the degree to
  which a particular employer has experience that is better or worse that
  expected for that industry. Weighted by employer’s credibility factor.


• Experience Rating: The process of
  determining the premium rate for a group risk, wholly or partially on the
  basis of that group’s experience.


• Experience Refund: A provision in
  most group policies for the return of premium to the policyholder because
  of lower than anticipated claims.


• Exposure Unit: Unit of measurement used
  in insurance pricing.


• Extended Coverage Insurance:
  Protection for the insured against property damage caused by windstorm,
  hail, smoke, explosion, riot, riot attending a strike, civil commotion,
  vehicle and aircraft. This is provided in conjunction with the fire insurance
  policy and the various “package” policies.


• Extended Non owned Coverage:
  Endorsement that can be added to an automobile liability insurance policy
  that covers the insured while driving any non owned automobile on a regular
  basis.


• Extended Reporting Period:
  An additional period of time after policy expiration during which valid
  claims will be paid under a claims-made policy of liability insurance


• Extended Reporting
  Period Endorsement: Added to a claims-made policy of liability insurance
  to provide additional period of time during which valid claims will be
  paid


• Extended Term Insurance: A
  form of insurance available as a non forfeiture option. It provides the
  original amount of insurance for a limited period of time.


• Extended Unemployment
  Insurance Benefits: Additional cash benefits paid by federal state
  unemployment insurance programs to workers who are involuntarily unemployed
  and who have exhausted their regular weekly cash benefits during periods
  oh high unemployment.


• Extortion: Surrender of property away from
  the premises as a result of a threat to do bodily harm to the named insured,
  relative, or invitee who is being held captive.


• Extra Expense Insurance: Type
  of business income insurance that covers the extra expenses incurred to
  continue operations after a loss has occurred.