PACKAGE POLICY – An insurance contract in which several coverages are included in one policy.
PAID–UP INSURANCE – A policy on which no further premium payments need to be made.
PARCEL POST INSURANCE – Insurance against loss of property shipped by parcel post while in charge of the Post Office Department.
PARTIAL LOSS – (1) A loss of less than the entire value of property; (2) A loss to the insurer of less than the face amount of the contract.
PARTICIPATING INSURANCE – (1) Insurance or reinsurance which contributes proportionately with other insurance on the same risk; (2) Insurance written under a contract providing for distribution to the insured of the excess of the insurer's funds over amounts necessary to meet its obligations and maintain its solvency. Subject to governmental regulation, such distribution is usually at the discretion of the board of directors.
PARTICULAR AVERAGE – An ocean marine term denoting a partial loss to a ship or cargo caused accidentally.
PASSENGER LIABILITY – The liability of a common carrier for the bodily injuries to its passengers as a result of an accident. Aircraft liability policies sometimes have a separate or designated limit for passenger liability.
PATENT INSURANCE – Insurance against loss due to infringement of the insured's patent, or due to claim of infringement of another's patent by the insured.
PAYEE CLAUSE – A clause in an insurance contract providing for payment of loss to a person or class of persons.
PAYMASTER ROBBERY INSURANCE – Insurance against loss by robbery of payroll while in charge of a custodian.
PAYROLL AUDIT – An examination of an insured's payroll records by a representative of the insurer to determine the premium due on a policy written on a payroll basis.
PAYROLL ROBBERY INSURANCE – (See also PAYMASTER ROBBERY INSURANCE)
PER DIEM – By the day.
PERFORMANCE BOND – (See also CONTRACT BOND)
PERIL – The term refers to the causes of possible loss such as, fire, windstorm, explosion and the like.
PERJURY – A false oath.
PERMIT BOND – A bond guaranteeing that the person to whom a permit is, or is to be, issued will comply with the law or ordinance regulating the privilege for which the permit is issued.
PERPETUAL INSURANCE – Insurance without an expiration date and for which the insured make a large deposit with the insurer, so that interest earnings will pay for losses.
PERSONAL PROPERTY – Property that is not real, consisting of things temporary or movable; chattels.
PERSONAL PROPERTY FLOATER – A contract affording insurance against loss to personal property wherever located.
PHYSICAL HAZARD – This refers to the material, structural or operational features of the risk itself.
PHYSICIANS' AND SURGEONS' LIABILITY INSURANCE – Insurance against loss due to claims for damages alleging malpractice by physicians or surgeons in the exercise of their professions. Often referred to as Medical Malpractice Insurance.
PILFERAGE – Theft of minor items, usually goods from a shipping container.
PLATE GLASS INSURANCE – Insurance against loss resulting from breakage of glass, including replacement of lettering and ornamentation. Does not cover breakage of glass by fire.
POLICY – A written instrument in which a contract of insurance is set forth.
POLICY YEAR – A twelve–month period following the inception date of the policy.
POLICYHOLDER – (1) A person or entity protected by an insurance contract; (2) Insured.
POOL – (1) The participation by a group of insurance companies in furnishing coverage on a large risk; e.g., nuclear pools; (2) The participation of a group of entities to share in each others losses from the same risk; (3) A sharing of losses.
POSITION BOND – A fidelity bond covering all persons occupying stated positions.
PORTFOLIO – A listing of the securities in which the assets of a company are invested.
POWER INTERRUPTION INSURANCE – Insurance against loss due to interruption of power supply from a power utility caused by accidental breakdown of the utility's machinery.
POWER OF ATTORNEY – Authority given to a person or corporation to act for and obligate another, to the extent specified in the instrument granting the power.
POWER PLANT INSURANCE – Insurance against loss caused by accidental injury to objects used for generation control, storage or distribution of energy. (See also BOILER AND MACHINERY INSURANCE)
PREFERRED RISK – A desirable risk from the insurer's point of view.
PREMISES – Particular location or portion thereof as defined by the policy contract.
PREMIUM – The sum paid for a policy of insurance. (See also EARNED PREMIUM, MINIMUM PREMIUM, NET PREMIUM, PURE PREMIUM, RETURN PREMIUM and UNEARNED PREMIUM)
PREMIUM DISCOUNT PLAN – A plan providing for percentage reductions in premiums, the percentage increasing with the size of the risk.
PREMIUM RATE – The price per unit of insurance.
PREMIUMS WRITTEN – The entire amount of premium on policy contracts written by an Insurer.
PRIMARY INSURANCE – (1) The first level or layer of insurance for a given risk; (2) Provides coverage up to a specified amount against specified perils. (See also EXCESS INSURANCE)
PRINCIPAL – The party, in suretyship, whose actions, honesty, performance or responsibility are to be guaranteed.
PRIVATE CARRIER – A carrier that transports its own goods and/or people (See also COMMON CARRIER and CONTRACT CARRIER)
PROBABILITY – (1) The chances of an event occurring; (2) A ratio of the number of times an event occurs divided by the number of times it is possible to occur.
PROBABLE MAXIMUM LOSS (PML) – The largest loss likely to occur. (See also MAXIMUM FORESEEABLE LOSS and MAXIMUM POSSIBLE LOSS)
PRODUCER – The individual who has solicited insurance business from the buyer and is placing it with the company; thus, he may be either an agent or a broker.
PRODUCT LIABILITY – Liability imposed for damages caused by accident and arising out of goods or products manufactured, sold, handled or distributed by the insured or others trading under the insured's name. The accident must have occurred after possession of goods has been relinquished to others and with the exception of food products (restaurants, etc.), away from premises owned, rented or controlled by the insured.
PRODUCT LIABILITY INSURANCE – Insurance against loss due to claims against the insured for damages arising from product liability.
PROFESSIONAL LIABILITY – (See also MALPRACTICE)
PROFITS AND COMMISSIONS INSURANCE – Insurance against loss of profits or commissions on the sale of goods due to loss to the goods caused by a specific peril.
PROFITS INSURANCE – In the United States, insurance against loss of profits on the sale of goods due to loss to the goods caused by a specific peril.
PROHIBITED RISK – A line that an insurance company will not insure under any condition.
PROOF OF LOSS – A formal statement of a claim for payment of a loss made by an insured to an insurance company.
PROPERTY DAMAGE (LIABILITY) INSURANCE – Liability insurance protecting the insured against claims arising from damages caused to the property of others.
PRO RATA CANCELLATION – The cancellation of an insurance contract or bond, with the premium being adjusted in proportion to the exact time the protection has been in force; the insured receives a refund of the unearned premium.
PRO RATA CLAUSE – A clause in an insurance contract providing that losses will be paid in the proportion that the amount of the contract bears to the entire amount of insurance covering the loss.
PRO RATA DISTRIBUTION CLAUSE – In a fire insurance policy, it provides that the amount of insurance written shall apply to each building or location in that proportion which the value of each building or location bears to the total value of the described property.
PRO RATA RATE – A premium rate charged for a short term at the same proportion of the rate for a longer term as the short–term bears to the longer term.
PROTECTION – A term used interchangeably with the word "coverage" to denote the insurance provided under the terms of the policy.
PROTECTION AND INDEMNITY INSURANCE (P&I) – Liability and property damage insurance covering the liability of owners and operators of vessels for claims from third parties, owners of cargo on board and passengers and includes compensation coverage for the ship's master and all crew members.
PROTECTIVE LIABILITY INSURANCE – Insurance against loss due to claims for damages due to contingent liability.
PROXIMATE CAUSE – The factor that directly caused a certain accident or situation without other intervening causes.
PUBLIC LIABILITY INSURANCE – Insurance against claims arising out of bodily injuries or property damage sustained by others, not employees. Sometimes used to indicate forms of bodily injury liability insurance.
PUBLIC OFFICIAL BOND – A guarantee that a public official will properly account for public funds and will perform such other duties as are prescribed by law. The form of the bond and the performance guaranteed are often prescribed by statute.
PUNITIVE DAMAGES – Damages awarded in addition to compensatory damages to serve as punishment for wanton misconduct or as a deterrent to others.
PURE PREMIUM – Premium arrived at by dividing losses by exposure, and to which no loading has been added for commissionable taxes and expenses.