Risk & Insurance Glossary - S


SAFE DEPOSIT BOX INSURANCE – Insurance against loss of or liability for loss of contents of a safe deposit box.
SALVAGE – (1) The value of property after it has been partially damaged by a peril; (2) To save endangered property and to enhance the value of damaged property; (3) Property taken over by the insurer on payment of loss in maritime law, the award to persons who voluntarily render services to maritime property in peril, with resulting benefit thereto.
SCHEDULE BOND – A bond in which are listed the names or positions of the employees covered as principles. Also called a position bond.
SCHEDULE POLICY – An insurance policy that covers, under separate insuring agreements, several enumerated causes of loss.
SELF INSURANCE – (1) The setting aside of funds by an individual or organization to meet losses, and the accumulation of a fund to absorb fluctuations in the amount of loss, the losses being charged against the funds so set aside or accumulated; (2) A planned program for financing or otherwise recognizing losses.
SELF INSURED RETENTION (SIR) – That part of a risk retained by an insured, the excess of which, if any, is insured.
SELLING PRICE CLAUSE – A clause in an insurance contract providing that, in case of loss, property shall be valued at the price at which it has been actually sold or could have been sold, less discounts and charges to which it would have been subject had no loss occurred.
SERVICE FEE – A fee paid to a broker for his services. (See also COMMISSION)
SHOCK LOSS – (1) A loss larger than expected; (2) A claim or loss that is so large as to affect materially the underwriting averages.
SHORT RATE – The charge required for insurance or bonds taken for less than one year and, in some cases, the earned premium for insurance or bonds canceled by the insured before the end of the policy period or term of bond.
SINGLE INTEREST COVER – Used largely in connection with the insurance of property sold on the installment plan. It means the insurance protects the lender of the money advanced to purchase the property and does not protect the borrower and purchaser.
SISTERSHIP LIABILITY – Loss arising when an owner or user of a product cannot use it due to known or suspected defect. Comes from the situation where a certain aircraft has a defect so similar craft (sister ships) are not allowed to fly until the defect is corrected.
SOCIAL HOST LIABILITY – The legal term for the civil responsibility of a person who furnishes alcohol to another person (guest) as an act of hospitality or otherwise permits alcohol to be consumed on property or premises that the host of the party either owns or controls, with no money being formally exchanged in a sales capacity.  A social host is most often a private individual who serves alcohol in a non-commercial setting.
SMOKE INSURANCE – Insurance against loss due to smoke or smudge caused by the sudden, unusual, and faulty operation of a heating or cooking unit.
SPECIFIC INSURANCE – Insurance covering a specific kind or unit of property in contrast to blanket insurance.
SPECIMEN POLICY – A sample policy used by producers for discussing protection features with prospective insurance buyers.
SPLIT LIMITS – Refers to limits of insurance policies that have designated limits per person, per occurrence, and for property damage; most common in automobile liability policies.
SPRINKLER LEAKAGE INSURANCE – Insurance against loss from accidental leakage or discharge from a sprinkler system (in some contracts, fire protection equipment), due to causes other than a hostile fire or certain other specified causes.
STANDARD FORM – A contract or policy form in general use by insurers, adopted by a group of insurers approved by a state insurance department, or prescribed by law.
STANDARD PROVISIONS – Contract provision in general use by insurers, adopted by a group of insurers, approved by a state insurance department, or required by statute either literally, in substance or in a form more favorable to the insured.
STATE FUND – An insurer operated by a state government.
STATUTE OF LIMITATIONS – The time limit allowed by law to bring legal action.
STATUTORY LAW – Written law created by the legislature as contrasted to law created by judicial opinions and administrative bodies or common law.
STOCK INSURANCE COMPANY – An insurance company owned and controlled by stockholders, usually for the purpose of making profits.
STOP LOSS – Any provision in a policy designed to cut off the company's loss at a given point. A stop loss may be an aggregate payable under the policy, maximum payable for anyone disability, or the like.
STOP LOSS INSURANCE – A form of excess insurance covering losses over and above an agreed amount during the policy period.
STRICT LIABILITY – Legal concept applied to certain product liability cases where the manufacturer is responsible for hazardous products whether or not he was negligent.
SUBROGATION – The acquiring by the insurer of the insureds rights against third parties for indemnification of loss or other payments to the extent that the insurer pays the loss.
SUBSIDENCE – The sinking or settling of land.
SUBSTANDARD – Conditions making a risk less desirable than normal for its class.
SUE AND LABOR CLAUSE – An ocean marine term requiring the insured to take all necessary steps to save property from further loss.
SURETY – The corporation or individual guaranteeing performance or faithfulness under a bond.
SURETY BOND – A guarantee of the performance of an expressed obligation, usually evidenced by a written instrument.
SURETYSHIP – The function of being a surety.
SURPLUS LINES – Insurance not usually available from admitted insurers, so written with non–admitted insurers.
SURPLUS LINES BROKER – A broker who is authorized to place insurance with nonadmitted insurers.
SURVEY – (1) A study of and report on the hazards and insurance requirements of a person or organization; (2) An inspection of a risk for underwriting or loss prevention purposes.
SUSPENSE FILE – A file in which are kept letters and other documents requiring follow–up.