Risk & Insurance Glossary - E


EARNED PREMIUM – That part of the premium paid which covers the portion of time for which protection has been furnished.
EFFECTIVE DATE – The date on which a contract goes into effect and from which time protection is afforded.
ELECTRICAL EXEMPTION CLAUSE – A clause attached to a fire insurance policy stating that, in the event of electrical injury or disturbance to electrical appliances (including wiring) caused by artificially generated electrical currents the insurer shall be liable only if fire ensues and then for the damage by fire only.
ELEVATOR LIABILITY INSURANCE – Insurance against loss due to claims for damages arising out of the ownership, maintenance, or use of elevators or other hoisting devices.
EMBEZZLE – To fraudulently appropriate money or property in one's care.
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 (ERISA) – A Federal act imposing obligations on employers having employee benefit plans. Public agencies are currently (2/81) excluded from the act.
EMPLOYERS LIABILITY INSURANCE – Insurance against loss due to claims for damages by employees for bodily injuries, including death, and excludes liability under workers' compensation law.
ENCUMBRANCE – Any outside interest in, or right to, property founded on legal grounds; e.g., mortgage, lien for work and materials, or a right of dower. It diminishes the interest of the person owning the property.
ENDORSEMENT – An amendment in writing added to and made a part of the insurance policy to modify the policy. An endorsement supersedes the printed policy text and if two endorsements contradict each other, the one with the latest date prevails.
ENDOWMENT – A life insurance contract providing for the payment of the face amount of the policy at a specific age, at the end of a specified period, or upon the death of the insured.
EQUITY – The value of property owned in excess of the indebtedness against it.
ERRORS AND OMISSIONS INSURANCE – Insurance against loss due to failure, through error or unintentional omission.
ESTOPPEL – Being stopped from asserting a right because of misleading conduct upon which another party relied. For example, an insurer may be estopped from refusing a claim that happened after expiration of the policy if the insurer or his agent acted in some way as though the policy would be renewed.
EXCESS INSURANCE – Insurance in excess of a specified amount. There mayor may not be other insurance for losses less than this specified amount.
EXCLUSION – A part of the insurance policy that refers to hazards, circumstances or property not covered by the policy. Many of the exclusions can be removed by endorsement.
EX GRATIA PAYMENT – A payment made by an insurer for which the insurer is not liable under the terms of the policy.
EXPEDITING EXPENSE –Expenditures to speed the repair of damaged property in order to resume operations more quickly.
EXPENSE LOADING – That part of the premium rate the purpose of which is to take provision for meeting the expenses of the insurer.
EXPENSE RATIO – The ratio of the insurer's expenses to premiums.
EXPERIENCE – Classified statistics of events connected with insurance, of outgo, or of income, actual or estimated.
EXPERIENCE MODIFIER – Premium adjustment factor based on past experience of the insured by class of coverage. Most common is on workers' compensation coverage.
EXPERIENCE RATING – Determination of the premium rate for an individual risk partially or wholly on the basis of that risk's own experience.
EXPIRATION DATE – The date on which the insurance contract terminates.
EXPLOSION INSURANCE – Insurance against loss of property caused by explosion; does not cover explosion of steam boilers, pipes, or certain kinds or pressure vessels.
EXPOSURE – (1) The state of being exposed to the chance of loss. (2) The extent of exposure to loss as measured by payroll, receipts, area, etc. (3) The chance of fire being communicated to an insured risk from its surroundings.
EXTENDED COVERAGE – An endorsement on the fire insurance contract that extends the insurance to cover loss caused by windstorm, hail, explosion (except steam boilers), riot, riot attending a strike, civil commotion, aircraft, vehicles, and smoke.
EXTORTION – To obtain money or favors by violence or threat of violence.
EXTRA EXPENSE INSURANCE – Insurance that covers the extra expense incurred by an insured in order to continue business while damaged premises are being restored. It should not be confused with business interruption insurance as it has no relation to profits.