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
policyholder’s (insured’s)
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 party’s
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
Ashland
Barron
Bayfield
Buffalo
Burnett
Calumet
Clark
Columbia
Door
Douglas
Dunn
Florence
Forest
Green
Green Lake
Iowa
Iron
Jackson
Jefferson
Juneau
Kewaunee
Lafayette
Langlade
Lincoln
Marinette
Marquette
Menominee
Milwaukee
Monroe
Oconto
Oneida
Ozaukee
Pepin
Pierce
Polk
Portage
Price
Richland
Rusk
Sauk
Sawyer
Shawano
Sheboygan
Taylor
Trempealeau
Vernon
Vilas
Walworth
Washburn
Washington
Waupaca
Waushara
Winnebago
Wood
Wisconsin Municipal Mutual
Insurance Company
Member Counties
Brown
Chippewa
Dane
Dodge
Eau Claire
Kenosha
La Crosse
Manitowoc
Marathon
Outagamie
St. Croix
Waukesha
Remaining Counties
Crawford
Fond du Lac
Grant
Racine
Rock
Information Prepared by:

Dave Pulda, Risk Manager,
UW System Office of Safety and
Loss Prevention

Debbie Beich, Risk
Management Specialist,
UW System Office of Safety and
Loss Prevention