| Term | Definition |
|---|---|
| Term | Definition |
| Breach of contract | A failure, without legal excuse, to perform any promise that forms all or part of the contract. |
| Claim | Formal written demand for monetary relief or if you are formally served with process or papers in a lawsuit. |
| Claims made and reported | A claim is ‘made’ when you receive a written demand or are provided with or formally served with process or papers in a lawsuit, arbitration, or disciplinary proceeding. Once a claim has been ‘made’ against you, or you are aware of a potential claim, you are required to report the claim to the insurer during the policy period. |
| Claimant | Person or entity making a claim against the insured’s policy. |
| Damages | Any compensatory sum, including a judgment, award and/or settlement (provided any settlement is negotiated with the Company’s written consent). |
| Deductible | The amount an insurer will deduct from the loss before paying up to its policy limits. |
| Defense costs | Reasonable and necessary fees and expenses incurred in the defense or appeal of a claim. |
| Errors and Omissions (E&O) insurance | Type of coverage that protects the insured against liability for committing an error or omission in performance of professional duties. |
| Insured | Person or organization covered by the policy. |
| Judgement | A decision of a court regarding the rights and liabilities of parties in a legal action or proceeding. |
| Misrepresentation | False or misleading statement, or a material omission, made with intent to deceive that renders other statements misleading. |
| Negligence | Failure to exercise appropriate and/or ethical ruled care expected to be exercised amongst specified circumstances. |
| Settlement | Resolution between disputing parties about a legal case, reached either before or after court action begins. |
Related resources
The policy for which you are applying is issued by a purchasing group. The purchasing group may not be subject to all of the insurance laws and regulations of your state of domicile. State insurance insolvency guaranty funds may not be available for purchasing groups.