Risk & Insurance Glossary - F


FACE AMOUNT – Generally used to mean the amount of insurance provided.
FAIR PLANS – Stands for Fair Access to Insurance Requirements. State plans to obtain insurance for property owners in deteriorated urban areas. They call for physical inspections and insurance if recommendations are carried out.
FAITHFUL PERFORMANCE BOND – A contract whereby a surety guarantees that a principal's failure to perform duties of office will not cause loss to the obligee.
FEE SIMPLE ESTATE – Absolute ownership of real estate as distinguished from less than absolute ownership.
FIDELITY BOND – Insurance protecting an employer against loss due to the dishonesty of employees.
FIDUCIARY – A person or entity who occupies a position of special trust and confidence; e.g., handling or supervising the affairs of funds or another.
FIDUCIARY BOND – Protection against loss by reason of a breach of duty or dishonesty.
FINANCIAL RESPONSIBILITY CLAUSE – A clause in an automobile liability insurance contract subjecting the contract to the requirements of any financial responsibility law and requiring the insured to reimburse the insurer for disbursements it would not have been required to make except for this clause.
FINANCIAL RESPONSIBILITY LAW – A law requiring an operator or owner of a motor vehicle to give evidence of financial ability to meet claims for damages in order to be licensed to drive a motor vehicle or to have his vehicle registered. May be compulsory on all registrants in some states or under specified conditions in other states.
FINE ARTS INSURANCE – Insurance of fine arts against "all risks" on a valued basis.
FIRE – An agent that produces heat and a flame or glow. (See also FRIENDLY FIRE AND HOSTILE FIRE)
FIRE DEPARTMENT SERVICE CLAUSE – A clause in a fire insurance contract providing for reimbursement of the insured for payment of charges made by a fire department for responding to an alarm of fire at the location of the property insured.
FIRE INSURANCE – Insurance against loss caused by a hostile fire; includes loss caused by lightning and removal.
FIRE WALL – A fireproof wall erected for the purpose of preventing the spread of flames.
FIREPROOF (FIRE RESISTIVE) – The term "fireproof' is frequently misunderstood for, property defined "fireproof' or "fire resistive" refers to buildings of which the structural members, including walls, columns, floor and roof constructions, are of noncombustible materials of such quality and so assembled as to resist the effects of a severe fire. "Fireproof' has never meant a building which could not be damaged by fire.
FIRE RESISTIVE CONSTRUCTION – Construction designed to offer a high degree of resistance to damage by fire, and making use of noncombustible materials.
FIRST PARTY INSURANCE – Insurance indemnifying the policyholder against loss or damage to his own property; e.g., fire insurance. (See also THIRD PARTY INSURANCE)
FIXTURES AND FITTINGS – Articles attached to and a permanent part of a building; e.g., lights, counters, shelves, etc. Sometimes used to mean articles of furniture and equipment not permanently attached.
FLAT CANCELLATION – The cancellation of a policy as of its effective date, before the company has assumed liability. This requires the return of paid premium in full.
FLEET – A group of several insurers under common ownership or management.
FLEET POLICY – An insurance contract covering a number of automobiles owned by one insured and under one direct operating management.
FLOATER POLICY – An insurance contract that covers property in any location within a specified territory.
FLOOD INSURANCE – Insurance against loss caused by tidal wave, overflowing of streams, and cloudbursts.
FORCE MAJEURE – A natural and unavoidable catastrophe that interrupts the expected course of events (See also ACT OF GOD)
FOREIGN COMPANY – An insurance company domiciled in another state, whether licensed in the state or not. (See also ALIEN COMPANY and DOMESTIC COMPANY)
FORGERY – In general, any false writing with intent to defraud.
FORGERY BOND – Insurance against loss due to forgery or alteration of, on, or in checks or other instruments.
FORMS – A document (usually printed, typed, or reproduced) prepared in a prescribed arrangement of words and layout; e.g., policy, endorsement, application.
FORTUITOUS – Accidental.
FOUNDATION EXCLUSION CLAUSE – A clause excluding from coverage foundations below the level of the lowest basement floor, or if there is no basement, below the level of the ground, and cost of excavations.
FRANCHISE CLAUSE – A clause providing that no payment shall be made unless the loss or damage equals or exceeds a specified amount, known as the franchise; the entire loss or damage is covered.
FRATERNAL INSURANCE – Insurance provided by members of a fraternal organization for the protection of themselves.
FRAUD – False misrepresentation, deceit, concealment.
FREE ALONGSIDE (FAS) – A marine insurance term. Shipper assumes liability for loss until goods are safely on pier or dock alongside the vessel.
FREE OF PARTICULAR AVERAGE (FPA) – A marine insurance term. It exempts the insurer from paying partial losses. Only total losses are reimbursed.
FREE ON BOARD (FOB) – Shipper is responsible until goods have been placed on board vessel, car or truck, after which the consignee assumes the risk. The description following the term "FOB" usually designates where the purchaser takes title; e.g., FOB – Destination.
FRIENDLY FIRE – A fire in the place intended; e.g., furnace, stove or fireplace.
FRONTING – An insurer providing an insurance policy without participating in the risk, usually at a fee.
FULL COVERAGE – Any form of insurance which provides for payment in full of all losses caused by the perils insured against up to the amount of insurance without deductions.