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

Member Counties

Adams Jackson Portage

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

Member Counties

Brown La Crosse
Chippewa Manitowoc
Dane Marathon
Dodge Outagamie
Eau Claire St. Croix
Kenosha Waukesha
Remaining Counties

Crawford
Fond du Lac
Grant
Racine
Rock
Information Prepared by:

DavePulda, Risk Manager,

UW System Office of Safety and
Loss Prevention

DebbieBeich, Risk
Management Specialist,
UW System Office of Safety and
Loss Prevention