Risk & Insurance Glossary - B


BAIL BOND – A bond deposited for the release of the principal which bond is forfeited if the principal fails to appear in court.
BAILEE – A person or entity having custody of property of others. Bailees have different degrees of liability for such property.
BAILEES' CUSTOMERS INSURANCE – Insurance against loss of or damage to property of bailees' customers payable either to bailee for their account or direct to customers.
BAILOR – A person entrusting goods to another.
BARRATRY – A term used in ocean marine for the unlawful acts or fraudulent breach of duty on the part of the master of a ship or of the crew, to the detriment of the owner of the ship or cargo.
BASIC RATE – The manual or experience rate from which are taken discounts or to which are added charges to compensate for the individual circumstances of the risk.
BATTERY – Use of force against a person.
BENEFICIARY – The party or parties named in the policy, by the insured, to receive the death benefit of the policy.
BETTERMENTS – An improvement in property that enhances its value beyond ordinary repair.
BID BOND – A guarantee that a contractor will enter into a contract on which he has bid if it is awarded to him, and furnish a contract bond (sometimes called a "performance bond") as required by the terms of the contract.
BILL OF LADING – A receipt of property to be transported, issued by the carrier. It outlines the carrier's responsibilities for the property.
BINDER – A memorandum or agreement to issue an insurance policy. Because actual issuance of the policy often takes weeks or months, a binder gives evidence of essential elements of the policy.
BLANKET BOND – A broad bond covering all employees and, in the case of financial institutions, including insurance against enumerated hazards.
BLANKET INSURANCE – Insurance covering one or more items of property in one or more locations or one or more shipments.
BODILY INJURY LIABILITY INSURANCE – Protection against loss due to claims for damages because of bodily injury (including death), sickness or disease sustained by any person or persons other than employees.
BOILER AND MACHINERY INSURANCE – Insurance against loss, property and liability, due to accidents, including explosions to boilers, pressure vessels, electrical apparatus or machinery.
BOND – An obligation of a surety to protect the obligee (holder of bond) against financial loss caused by an act or omission of the principal.
BOOK VALUE – The value of assets, such as real estate, property, bonds, etc. as shown on the books of a company.
BREACH – Failure to live up to the warranties or conditions of an insurance contract; e.g., a fire sprinkler warranty is breached if the sprinklers are not operative, if the failure is from conditions under the insured's control.
BROKER–AGENT – One who is licensed to act both as broker and as agent.
BROKER OF RECORD – The licensed insurance broker who has been designated by the policyholder as his only broker, entitling the designated broker to negotiate insurance. This requires a broker–of–record from the insured.
BUILDER'S RISK INSURANCE – Insurance against loss to structures or ships, including machinery and equipment, in the course of construction, and to materials incidental to construction.
BUILDING CREDITS – Credits allowed on the basic rate for protective construction features of a building against fire.
BUILDING DEFICIENCIES – Features or arrangement of a building that add to its fire hazard.
BUILDING RATES – A rate applied to risks in fire insurance based upon the building instead of upon the contents of the building.
BUREAU RATES – Basic rates established by members of an insurance company organization agreed to be charged by all members.
BURGLARY – Breaking and entering into premises of another, with felonious intent, and with visible signs of the forced entry.
BURNING RATIO – The ratio of losses that could reasonably be expected to the amount of insurance in effect. By contrast, the loss ration is the ratio between actual losses and premiums.
BUSINESS INTERRUPTION INSURANCE – Insurance against loss of profits and certain continuing expenses, if a covered peril interrupts the normal operation of a business. Also called Use and Occupancy Insurance, a term obsolete except in boiler and machinery insurance.
BUSINESS INTERRUPTION VALUE – Amount of business interruption insurance necessary in order to provide for payment in full of any business interruption loss within the period of interruption covered by the contract.