Primary Policy – An insurance policy providing the initial layer of insurance coverage for an individual, entity, or facility for coverage of a particular act and/or occurrence.

Excess Policy – An insurance policy that covers liability above the limits of an underlying primary policy.  An excess policy is typically triggered only when the underlying primary policy and any other coverage available to the insured is exhausted, and provides an additional layer of protection for high-exposure claims.

Declarations – Also referred to as the “Declarations Page”, this portion of an insurance policy provides information such as the name and address of the insured, the policy period, the amount of insurance coverage, and premium due for the policy period, as well as coverage restrictions and any endorsements to the policy, if any.

Endorsement – A form that amends or supplements the terms of an insurance policy.

Limit(s) – The maximum amount paid under the terms of an insurance policy. Liability insurance policies typically have two limits: a per-claim limit and an annual aggregate limit.  Limits available vary depending on the jurisdiction in which the policy is written, and other considerations.

Vicarious Liability – Liability imposed on one person or entity for the actions and/or omission of another person or entity.  Examples include an employer’s liability for acts of employees or a supervising physician’s liability for acts of allied health professionals.

Premium – The amount of money a policyholder pays for insurance protection, i.e., the “cost” of the policy.

Deductible – An amount that a policyholder agrees to pay towards a covered loss, often as reimbursement to the insurer at the time the settlement or judgment is paid.  Deductibles are included in, and thus may erode, the limit of liability.  For example, an insurance policy with a $1 million limit and a $100,000 deductible means that the insured pays $100,000 and the insurer pays $900,000 before the policy is exhausted.    For a deductible policy, the insurer typically has a duty to defend the insured from the inception of the case, including selecting defense counsel.

Self-Insured Retention (SIR) – An amount of money that a policyholder must pay toward a covered claim before the insurer has an obligation to provide coverage under the policy.  Once the SIR is reached, the insurer would then assume the defense and indemnity of the claim.  An SIR does not erode the limit of liability.  For example, if the policyholder has a $1 million policy limit with a $100,000 SIR, the policyholder pays the first $100,000 for defense costs and damages, but the insurance company still has a responsibility of a limit of $1 million.  The insured may have responsibility for handling both defense and indemnity of claims within the SIR.

Medical Professional Liability (MPL) Policy – An insurance policy that covers an insured healthcare provider’s liability for injury arising during treatment and care of patients.  MPL policies may be issued to entities, physicians, and other healthcare professionals, and may be written on a claims-made or occurrence basis.

Entity Liability Policy – An insurance policy that covers claims against a professional entity (e.g. healthcare practice group) based upon its liability for the acts of its employees and contractors.  Coverage provided under an entity liability policy is separate from any coverage available to the entity under policies issued to individual healthcare professionals. Outside of New York State, an Entity Liability Policy may be referred to as a “Healthcare Facility Policy” by EmPRO Insurance Company.

Claims-Made Policy – An insurance policy that covers claims that are first made during the policy period or any extended reporting period, where the claim arises out of incidents, acts, or omissions which happen during the policy period or any prior acts/retroactive period specified in the policy.

Occurrence Policy – An insurance policy that covers claims based on incidents occurring during the policy period.  In contrast to a claims-made policy, an occurrence policy will continue to provide coverage after the policy period if the events giving rise to the claim happened during the policy period.

Extended Reporting Coverage (Tail) – Applicable to claims-made policies, extended reporting coverage extends the time for an insured to report a claim after the end of the policy period, where the claim is otherwise covered under the policy.  Extended reporting coverage does not provide coverage for claims arising during the extended reporting period, but instead provides coverage for claims that would have been covered under the policy but were not reported until after the policy period ended (but during the extended reporting period).

Modified Claims-Made Policy – Also known as “Occurrence Plus”, a modified claims-made policy provides coverage on a claims-made basis and includes prepaid extended reporting coverage (tail).

Prior Acts Coverage (Nose) – Applicable to claims-made policies, prior acts coverage provides an extension of coverage to a claims-made policy for prior acts between a specified retroactive date and the beginning of the policy period.

Commercial General Liability (CGL) Coverage – Coverage for the insured’s liability for accidental bodily injury, property damage, and personal or advertising injury caused by the services, business, operations, or employees of the entity.  EmPRO Insurance Company’s CGL policies exclude coverage for professional liability and are written on an occurrence basis to hospitals and facilities.  EmPRO Insurance Company may offer CGL coverage to individual health care provider(s) outside of New York State, depending on the state.

These definitions are provided for informational purposes only, and do not modify the terms of any policy issued by EmPRO Insurance Company.  Applicants and insureds should refer to policy documents for their terms and a complete explanation of coverage.