GLOSSARY OF RISK MANAGEMENT TERMS

This is a comprehensive list of insurance terms. Not all

concepts or coverages identified in this list are found at
Chapman University.

Revised: October 23, 2006

Absolute Liability: Liability arising from extremely dangerous operations; for

example, blasting. Chapman University or insured is liable for such operations,
without exception, for any resulting harm.

Accident: An unforeseen, unintended event, something unexpected, not

foreseen; for example, accidental bodily injury where Chapman University could
not reasonably foresee its action would result in injury or death; may also include
occupational disease, but generally, does not include stress other than an acute
reaction to a traumatic event. Under workers’ compensation an event or
circumstance(s) causing or leading to an injury, arising out of an in the course of
employment; may, include occupational disease, but generally, does not include
stress other than as an acute reaction to a traumatic event.

Accident Type: Categories of loss that summarize causes of loss, nature of the
loss, or what body part was injured.

Accident Year: Specific twelve month period utilized to measure the ultimate
activity of all claims occurring during that period regardless of the date the claims
were reported, opened or closed.

Accommodation: The changing of work or work methods in order to permit a

person to return to productive employment including reasonable modifications to
work environment.

Accounts Receivable Insurance: Pays for loss of records evidencing amounts

due Chapman University. Loss due to inability to collect outstanding accounts
receivable due to loss of records by covered peril.

Accrue: When a right is vested in Chapman University that right is said to accrue
to Chapman University’s benefit.

American College of Occupational and Environmental Medicine (ACOEM)

Practice Guidelines: The American College of Occupational and Environmental
Medicine’s occupational medicine practice guidelines.

Act of God: Act or event resulting from natural causes, without any human
intervention.

Actual Cash Value: Present day value of property measured in cash, arrived at
by taking the replacement cost and deducting for depreciation.

Actuary: Professional concerned with the application of probability and statistical

theories to the practical problems of insurance, self-insurance, or risk
management.

Additional Insured: An entity or person, other than the one in whose name
coverage is written, protected against loss by an insurance policy or other
coverage document.

Adjuster: One who acts for the insured, pool or self insured like Chapman
University in the settlement of tort claims.

Administrator: Administrator services include filings, coverage analysis, risk

analysis and underwriting, policy issuance and control, loss control, claims and
litigation management.

Admitted Company: An insurance company is termed “admitted” within a given

state when licensed by the state’s regulatory authority to do business in that
state; also known as an “Authorized Company.”

Adverse Selection: The tendency of poorer risks or less desirable insureds to

seek or continue insurance to a greater extend than do better ones, and the
tendency of insureds to take advantage of favorable options in insurance
contracts.

Agreed Medical Examiner (AME): An evaluation performed by a physician

agreed upon by the employer/third party administrator and the
employee/attorney. This evaluation is for the physician’s opinion, which may be
considered final in many workers’ compensation claims.

Aggregate Amount Clause: Policy provision in which the insured agrees to

maintain a stated or determinable amount of insurance.

Aggregate Excess Coverage: Amount under which Chapman University retains

the full amount, subject to its per claim SIR, until those retentions total a specified
dollar amount during a given period of time. Once this total is reached, the
reinsurer pays the full amount of all losses (subject to other policy provisions) for
the remainder of that time period.

Aggregate Limit: Maximum amount of coverage an insurer or pool must pay for
all losses during a specific period.

Allocated Loss Adjustment Expense (ALAE): Those expenses, such as court

fees and outside legal counsel, which can be assigned directly to a particular
claim.

All-Risk Insurance: Coverage that covers loss caused by all perils except those
specifically excluded in a coverage document or agreement.

Alternate Job or Work: In lieu of vocational rehabilitation, a job for the injured/ill
employee that accommodates the permanent work limitations/restrictions of the
employee.

Americans with Disabilities Act (ADA): A federal law that prohibits

discrimination against disabled persons. Within the act’s structure, employers
are to afford disabled employees the same rights, opportunities and benefits as
non-disabled employees. The ADA requires that a physical disability must
“substantially limit one or more of the major life activities of such individuals.”
Appeal: The legal recourse for reconsideration of a judgment or findings.

Applicant: Under State of California (California) workers’ compensation, the

party, usually the injured worker, who establishes a case before the California
Workers’ Compensation Appeals Board.

Application: A questionnaire or survey providing information utilized to

determine insurance coverage.

Application for Adjudication of Claim (Application or AAP): Filing this form

establishes a case before the California Workers’ Compensation Appeals Board
(WCAB). A WCAB case number will be assigned.

Apportionment: An approved methodology to determine how much of an

employee’s permanent disability is due to his/her industrial injury and how much
is due to other causes.

Appraisal: An estimate of quantity, quality or value; especially, “building

appraisals.”

Appreciation: An increased conversion value of property due to economic

causes.

Arbitration: A third party is appointed by the first and second parties to consider
the facts and dispute at issue and render a decision about them. The arbitrator’s
award is binding and final on both the first and second parties.

Arising Out of and Occurring in the Course of Employment (AOE/COE):

Injury or illness caused by a worker’s job and occurring during the course of
his/her work. An injury or illness must be AOE/COE to be covered or
compensable by workers’ compensation.

Arson: Willful and malicious burning of property.

Assets: All the available properties of an insurer or the insured to pay its debts
and liabilities.

Assumption of Risk: Where one places one’s self in a position of known risk
and danger.

Attractive Nuisance: A dangerous place or instrumentality attractive to children,

the owner of which has the legal duty of taking unusual care to guard them from
it.

Audit: Survey of records to determine the premium or contribution which should

be paid a pool or insurer for the protection furnished.

Automobile, Collision: Insurance against loss of, or damage to, a vehicle due to
collision with another vehicle or object.

Automobile, Comprehensive: Insurance against any physical loss to a vehicle

except collision.

Automobile, Liability: Insurance against bodily injury or property damage to

others arising from accidents or use of a covered vehicle.

Automobile, Medical: Optional coverage pays medical expenses of passengers

and insureds irrespective of responsibility for the accident.

Autopsy: Report by a medical examiner providing information on causes of

death.

Average Weekly Benefits: Weekly amount prescribed by statutes for disability

or death.

Aviation Insurance: Insurance protection against losses connected with airline

or airplane accidents.

B
Bailee: One who has temporary possession of property belonging to another.

Benefit: Under workers’ compensation, a payment made to a worker or a

dependent in relation to a compensable injury or condition.

Betterment: Enhancement of value from improvements. Improvements to

property that adds value not repairs or replacements.

Blanket Insurance: Insurance that covers more than one type of property in one
location or one or more types of property at several locations.

Blanket Position Bond: Protects an insured or Chapman University from loss

caused by its employees’ dishonest acts.

Bodily Injury: Injury to the body of a person as defined in coverage documents.

Boiler and Machinery Insurance: Covers property damage resulting from

accidents of boilers, pressure vessel, chillers, or related property.
Bond: An obligation of a surety to protect the obligee (for example, an owner)
against financial loss caused by act or omission of the principal (for example, a
contractor).

Bond, Bid: A guarantee a contractor will enter into an awarded contract; also,
termed “Performance Bond.”

Bond, Blanket: A broad bond covering all employees.

Bond, Performance: A bond guaranteeing the construction of an improvement

in connection with which, and prior to the completion of which, a mortgagee or
other lender lends money to the owner.

Bond, Public Official: A guarantee that a public official will property account for
public funds and will perform such other duties as are prescribed by law.

Bordereau: Passing of reinsurance from an insurer or a pool to a reinsurer under

a reinsurance contract.

Builder’s Risk: Insurance against loss to buildings and materials in course of

construction; also, known as “Course of Construction” (COC).

Burglary: Breaking and entering into premises of another with felonious intent.

Business Interruption: Protection for business owners for economic losses

during a period of interruption.

Business Necessity: Under workers’ compensation or disability benefits, when

an employer must release an employee out due to injury or illness, based on the
hardship placed on the business to maintain at least a minimum level of service
for its clients.
C

Calendar Year: All claims activity (loss payments, claims closed, claims opened,
legal fees, etc.) occurring during a specific calendar year regardless of when the
claim first occurred.

California Family Rights Act (CFRA): Similar to the Federal Family Medical
Leave Act (FMLA), except CFRA it allows time off to care for a domestic partner
and specifically excludes pregnancy related disabilities. Typically, an employee
may not coordinate CFRA leave with Pregnancy Disability Leave (PDL).
However, twelve weeks of CFRA may run consecutively with PDL to care for a
newborn.
Cancellation, Pro-rata: 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.

Cancellation, Short Rate: Rate for a period less than that for which coverage
was originally written; higher than a pro-rata rate.

Care, Custody and Control: A liability exclusion denying coverage of Chapman

University’s liability damage to others’ property in Chapman University’s care,
custody or control.

Case Evaluation and Plan (CEP): Document provided by defense counsel

within 30 days of assignment providing an assessment of the merits of the case,
defenses available and recommended budget.

Case Evaluation and Plan Analysis: Document provided by defense counsel

following trial or settlement of lawsuit providing an analysis of the lawsuit’s
original CEP.

Case Reserves: The reserves established for individual claims. The case
reserve may be modified over time as new facts about the claims become
known.

Casualty Insurance: A class of insurance made up of variety of subclasses,

principally concerned with insurance against loss due to legal liability to third
persons, but comprising also several unrelated lines or coverages.

Catastrophe: A sudden and severe disaster which causes an extraordinarily

large loss.

Causation: Under workers’ compensation, the legal determination that

employment resulted in or ‘caused” an illness or injury.

Cause of Action: Basis upon which a suit may be brought against another party.

Cede: To buy reinsurance.

Ceding Insurance Pool: Pool or insurer that places reinsurance of its original
risk with a reinsurance company.

Certificate of Insurance: Evidence of insurance that a specific entity or property

is covered by insurance.

Claim: A demand for payment of damages upon Chapman University or under a

coverage agreement, insurance contract or bond. A notification to Chapman
University that an event may have occurred that resulted in damage to an
individual or organization.

• First Party Claim - A property claim by the insured department or

employee.
• Small Court Claims - Claim for damage that does not exceed $5,000
and are administered within the State of California Small Court
System.
• Third Party Claim - A liability bodily injury or property damage claim by
a third party against Chapman University.
• Tort Claim - Any tort claim or lawsuit initiated by a third party against
Chapman University. A tort third party claim for bodily injury or
property damage caused by alleged negligence of Chapman University
or imposed by statute or contract.
• Closed Claim - A claim for which no further action or activity is
expected; or a claim which is not actively being adjudicated for any
liability, expense benefits or appeals.
• Litigated Claim - A third party claim, employee claim wherein the
claimant is represented by an attorney; or, if a workers’ compensation
claim, where an application for adjudication has been filed.
• General Liability Claims (GL) Bodily injury and/or property damage
claims; e.g., slip/fall, excessive use of force, violation of civil rights, etc.
• Vehicle Liability Claims (AL) Bodily injury and/or property damage
caused by the driver of the insured vehicle.
• Medical Malpractice Claims (MEDMAL) Bodily injury and professional
negligence claims arising from the provision or administration of
medical treatment.
• Contract Tort Liability Claim (CL) Tort liability demands or complaints
arising out of alleged breach of contracts or agreements.
• Professional Liability Claims (PL) Claims arising from professional
negligence; e.g., errors and omissions.
• Medical Only Claim (MO) A work related injury case, in which there is
no lost time away from work.
• Property Loss Allegations/Claims Property loss allegations/claims for
small property claims (under $5,000).

Claim, Accepted: A workers’ compensation claim in which the claims adjuster or

administrator determines that the worker’s injury is covered by workers’
compensation.

Claim Form: Under workers’ compensation, a form to report a work injury or

illness to the employer.

Claimant: One who makes a claim.

Claim Assignment: The act of assigning a claim or lawsuit for adjusting.

Claim Frequently and Severity: Respectively, the rate of claims or accidents
and a measure of the seriousness of claims or accidents.

Claim Liability: The funds set aside to cover all claims, reported and currently
reserved, including claim adjustment expense; and, also, includes a reserve for
Incurred But Not Reported (IBNR) claims.

Claims Administrator: A person or group that adjusts workers’ compensation

claims for employers; also known as “claims examiner”, “claims adjuster”, “third
party administrator” (TPA).

Claims Made Insurance: Covers claims brought in the policy period, regardless
of when the loss occurred.

Closed Claim: A claim for which no further action or activity is expected; or a

claim which is not actively being adjudicated for any benefits or appears.

Coinsurance: An insurance provision requiring Chapman University to contribute

a fair share of the total premiums out of which losses are paid.

Collective Bargaining Agreement: A written agreement made between an

employer and a union which contains the terms and conditions under which work
is to be performed and sets out the rights and duties of the employer, the workers
and the union.

Collision Insurance: Coverage against loss to insured property caused by

striking or being struck by an object; includes loss caused by vehicle upset.

Compensation: Under workers’ compensation, a term commonly used to refer to

benefits paid to employees by employers or insurers.

Completed Operations: Liability insurance which covers accidents arising out of

past operations which have been completed or abandoned.

Compromise and Release (C&R): A final settlement of an employee’s workers’

compensation case where the parties agree on a single lump sum payment. It
usually settles all outstanding issues except for future vocational rehabilitation.
The worker may become responsible for paying future medical care for the injury.

Condemnation: Legal taking of private property for public use and interest.

Condition: Provisions of an insurance policy or coverage document which will

limit, defeat or put off rights of a policy.

Consequential Damage or Loss: Damage or loss not directly caused by the

damage to property but which arises from the result of such damage.

Constructive Total Loss: A loss of sufficient amount to make the cost of

salvaging or repairing the property equal to or greater than the value of the
property when repaired.

Consultative Rating: Under workers’ compensation, a rating or permanent

disability provided by the California Division of Workers’ Compensation Disability
Evaluation Unit when a claim is litigated or if the injured worker is represented by
an attorney. (See Permanent Disability Rating.)

Contract of Adhesion: The insurance contract or coverage document offering

limited bargaining between the parties.

Corridor Deductible: The amount of loss which must be paid by an insured or

pool before reinsurance contract affords coverage.

Cost/Benefit Analysis: The analysis of the total costs of adjusting or litigating a

claim versus the likely settlement or trial value.

Credibility: The measure of relative weight attached to a body of loss experience

data for purposes of actuarial analysis. Generally, as the body of experience
becomes more extensive, the corresponding credibility increases.

Cumulative Trauma (CT): An injury that is caused by repeated events or

repeated exposures at work; for example, Carpal Tunnel Syndrome may result
from repetitively performing the same motion.
D

Damages: The estimated reparation in money for injury sustained. May be

compensatory or punitive and awarded as compensation for a loss, or in the case
of punitive damages awarded as punishment for causing the loss.

Damages, Economic: Compensatory damages for the loss of earnings or

earning capacity.

Date of Injury (DOI): The date on which a work-related injury takes place. If the
injury was caused by one event (a specific injury) it is the date of the event. If the
injury was caused by repeated exposures (a cumulative injury), it is the date that
the worker knew or should have known the injury was caused by work.

Death Benefits (DB): Under workers’ compensation or disability plans, benefits

paid to surviving dependents if a covered injury or illness results in death within
five years from the date of injury.
Debris Removal: Coverage for removal of debris resulting from damage to
property caused by an insured peril.

Decision and Order (D&O): Under workers’ compensation, a decision by the

State of California Rehabilitation Unit on a vocational rehabilitation dispute.

Declaration: That part of an insurance policy which contains information

regarding the insurance for which the policy is issued.

Declaration Judgment: Process brought to obtain the opinion of judgment of a

court concerning a point of law.

Declaration of Readiness (DOR or DR): A form to request a hearing before a

workers’ compensation administrative law judge in order to resolve a dispute.

Deductible: An arrangement in which Chapman University pays or reimburses

an insurer or pool for the first specified amount of each claim. This can be
applied on either a specific basis (per claim) or in aggregate (total amount of
deductibles for a cohort of claims).

Defendant: Usually the insured, employee or insured or employer or their

representative.

Demolition Insurance: Covers loss due to the demolition of any part of a

building not damaged by a covered peril, if required by law or ordinance.

Department of Workers’ Compensation, Medical Unit: The California Division

of Workers’ Compensation unit that certifies Qualified Medical Evaluators (QME)
and issues Panel QMEs when there is a dispute with the treating physician’s
report (see Panel QME.)

Deposition: A formal session in which an attorney asks questions of a party

under oath. It is the equivalent of testifying at a trial. The testimony is recorded
by a court reporter and may be used as evidence in a trial. Under workers’
compensation, depositions may only take place if an application for adjudication
has been filed.

Depreciation: The reduced value of property or a vehicle from age and use.
Loss in value, the difference between replacement cost now and present value.

Development Triangle: A compilation of loss experience statistics by accident

year and evaluation data in a triangular format. The aggregated statistics could
be claim incurred loss dollars, paid loss dollars, claim counts, etc.

Diary: The calendaring system to notify claim adjuster and supervisor of required
activities and important events in the life of a claim.

Disability: The limiting loss or absence of capacity of a worker to meet personal,

social or occupational demands or to meet statutory or regulatory requirements.

Disability Benefits: Payments (or other benefits) to an insured or pool member,

conditioned on the insured or pool member’s total or partial disability.

Disability Evaluation Unit (DEU): A unit within the California Division of

Workers’ Compensation that calculates the percent of permanent disability based
upon medical reports.

Disability Income: An income based on the amount of coverage in case of

permanent-total disability.

Disability Management: The proactive, insured or employer-centered process of

coordinating the activities of labor, management, insurance carriers, health care
providers and vocational rehabilitation professionals for the purpose of
minimizing the impact of injury, disability or disease on a worker.

Disability Management Coordinator: The insurer, insured or employer

representative directing the workplace’s disability management activities.

Disability, Permanent (PD): Payments to a worker whose job injury permanently

limits the employee’s type and scope of work.

Disability, Permanent Partial (PPD): Partial loss of earning capacity. Benefits

are paid to a worker capable of working but whose ability to compete in the open
labor market is reduced.

Disability, Permanent Total (PTD): Complete and permanent loss of earning

power. Payments to a worker is considered permanently unable to compete in
the open labor market.

Disability, Temporary Partial (TPD): Partial loss of earning power but from
which recovery is expected. A wage replacement benefit that may be paid when
an injured employee returns to work but at less than full earnings. Also known as
“wage loss”, and filed pursuant to a workers’ compensation, Long-Term Disability
and Short-Term Disability claim.

Disability, Temporary-Total (TTD): Condition which disables the employee from

working but from which full recovery is expected.

Disability, Temporary (TD): A wage replacement benefit paid when a physician

reports that an employee cannot work due to an industrial injury or illness
pursuant to the filing of a workers’ compensation claim. It is a non-taxable
benefit paid over a seven day week and is designed to replace wages while an
employee is temporarily disabled.

Disabling Injury: Usually an injury which causes loss of working time beyond the
day or shift on which the injury occurs.

Discount Factor: A factor applied to outstanding losses in order to estimate the

present value of those losses at a specified rate of interest. A discount factor is
dependent on the assumed rate of interest and expected timing of loss payment.

Discounting: The credit for future claim payments and expenses at their present
value.

Discrimination Claims (LC 132a): Under State of California workers’

compensation, a petition filed against an employer for the discharged
discriminatory action taken or against an employee due to an industrial injury.

Division of Workers’ Compensation (DWC): A division of the California

Department of Industrial Relations.

Doctor’s First Report of Injury: A State of California form (Form PR 5201)

completed by a physician after an injured employee’s first visit describing the
cause of injury, medical treatment advice or any needed work restrictions.

Earned Premium/Contribution: That part of an insurance premium or

contribution which pays for the protection an insurance company or pool has
given on the policy.

Earnings: Under workers’ compensation, wages, salary, overtime or any other

related remuneration designated as such.

Earnings Replacement Benefit: A benefit paid to a worker experiencing a loss

of earnings as a result of workplace injury.

Earthquake Insurance: Coverage against loss caused by earthquake

Effective Date: Date when an insurance policy or coverage comes into effect
and from which protection begins.

Employer’s Liability: Protects Chapman University against claims resulting

from worker injury not covered by workers’ compensation insurance.

Endorsement: An amendment in writing added to or taking from and made a

part of the coverage or insurance contract.

Ergonomics: The science of adapting work environments to suit the capabilities

and characteristics of an individual. Size, shape, age, gender, and physical
abilities, in addition to strength, endurance, and work tolerance affect the ability
of some workers to perform their jobs. Ergonomics considers job design, tools
and equipment, the management of physical environments, and worker
capabilities and limitations.

Errors and Omissions Insurance: Coverage against losses of others resulting

from failure, through error or unintentional omission of Chapman University.

Essential Job Duties: Core functions of a job without which the job’s
responsibilities can not be achieved. Typically, these essential duties cannot be
reassigned to other workers.

Examination: Audit of a pool, self insured or an insurer’s records, transactions,

methods, and assets by a state regulatory agency or department.

Excess Insurance: Policy designed to provide coverage over primary coverage

which does not pay until the primary coverage has paid its limits.

Expense, Expediting: Expense incurred in order to hasten repair or replacement

or property to reduce the loss amount.

Expense, Extra: Extra funds needed to continue a business, uninterruptedly,

after a loss.

Expense Loading: That part of the premium or contribution rate the purpose of
which is to make provision for meeting the expenses of the insurer or pool.

Expense Ratio: The ratio of expenses to premium or contributions.

Expiration Date: The date on which the coverage agreement terminates.

Explosion, Collapse and Underground (X, C, U): General liability exclusion for
property damage resulting from blasting, explosion and collapse, and damage to
underground property. Exposure: State of being subject to loss; or extent of risk
measured by payroll, operating expense, etc.

Exposures: A rating element used to measure an insured’s expected risk of loss.

Extended Coverage Endorsement: An endorsement on the fire insurance
coverage document that extends the coverage to cover loss caused by
windstorm, hail, explosion, riot, riot attending a strike, civil commotion, aircraft,
vehicle, and smoke.

Fair Employee Housing Act (FEHA): A California law, administered by the

Department of Fair Employment and Housing that prohibits discrimination against
disabled persons. In some respects, FEHA expands the Federal Americans with
Disabilities Act (ADA).

Fair Labor Standards Act (FLSA): Federal act that requires hourly paid
employees working FLSA overtime hours must be compensated for their
overtime hours at a rate not less than one and a half times the regular hourly
wage.

Family Medical Leave Act (FMLA): A federal law, administered by the

Department of Labor, that requires most employers of 50 or more employees to
grant unpaid leave, without loss of job, to workers with serious health problems
or who need to care for a child or other family member.

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 the vehicle registered.

Findings and Award (F&A): A workers’ compensation administrative law judge’s

decision finding that an applicant is entitled to disability benefit payments, future
medical treatment or both.

Findings and Order (F&O): A workers’ compensation administrative law judge’s

decision in which no disability payments or future medical treatment is awarded.

Fine Arts Insurance: Coverage for fine arts against all risks, except those
excluded, on a valued basis.

Fire: An agent that produces heat and a flame or glow.

Fire, Friendly: A fire which is not outside the place where it was intended to be.

Fire, Hostile: A fire outside the place where it was intended to be.
Fire-Resistive Construction: Construction designed to offer a high degree of
resistance to damage by fire, and making use of non-combustible materials.

First Aid: Any one-time treatment, and any follow-up visit for the purpose of
observation, or minor scratches, cuts, burns, splinters, etc., which do not
ordinarily require medical care. The one-time treatment and follow-up visit for
observation may be provided by a physician or registered professional. First aid
treatment need not be reported to the workers’ compensation insurer but should
be reported to a nursing professional at Chapman University Health Services.

Flood Insurance: Coverage against loss caused by tidal wave, overflowing of

rivers and streams, and cloudbursts.

Fraud: Any knowingly false or fraudulent material statement for the purpose of
obtaining or denying insurance coverage, claim payments or workers’
compensation benefits.

Funding: The amount of assets to cover specified exposures.

Future Medical: Under workers’ compensation, on-going benefits for medical

treatment for a work related injury.

G
Glass Insurance: Coverage designed to replace, or to pay for, replacing of
damaged glass and to pay certain incidental costs.

H
Hangarkeepers Liability Insurance: Coverage designed to protect owners of
airplane hangars from the exposures generated from that activity.

Hazard: A specific situation that introduces or increases the probability of

occurrence of a loss arising from a peril.

Hazard, Moral: Hazards resulting from personal or physical characteristics; for

example, habits, integrity, etc.

Hazard, Natural: Hazards naturally existing in the environment. Considered not

to be artificially created, but out of doors.
Hearing: Under workers’ compensation, formal proceeding held at the California
Workers’ Compensation Appeals Board before a workers’ compensation
administrative law judge, to discuss issues or receive information from various
sources in order to make a decision about a dispute or a proposed settlement.

Hold Harmless Agreement: Agreement within which indemnitor agrees to pay

losses on behalf of the indemnitee; indemnitor holds the insured harmless from
financial responsibility for a loss; for example, a claim brought by a third party
against Chapman University.

I
Incident Report: A report of an occurrence or incident out of which no claim or
lawsuit has yet been filed.

Incurred But Not Reported (IBNR) Reserves: The liability for claims relating to
insured events that have occurred but have not been reported, and includes a
provision for claims now closed, which may reopen.

Incurred Loss: The total of a given claim’s paid expenses and reserves for
future expenses, or the aggregate of all open claims’ paid expenses and
reserves.

Indemnity: To restore the loss victim to its position prior to the loss occurring.

Indemnity Agreement: Agreement within which the indemnitor agrees to directly

reimburse the indemnitee; for example, when a contractor directly reimburses
Chapman University.

Independent Contractor: One who agrees to perform services or supply

commodities under a contract. In carrying out the contract, Independent Contract
is not under the control of, not an employee of, the party with whom the
Independent Contractor is contracted.

Independent Medical Evaluator (IME): A physician selected by the judge (in

California) or by the adjuster (in Arizona) to determine the cause of the medical
condition, the permanent impairment of the injury, and/or the permanent
limitations, if any, that the worker has sustained.

Industrial Accident (IA): An accident arising out, or occurring during the course,
of employment (AOE/COE), or (proximately caused) by employment.

Inherent Explosion: An explosion arising out of the inherent characteristics of

the risk insured.

Inherent Vice: An inherent characteristic that may cause loss of value.

Impairment: The loss of use or derangement of any body part, system or

function.

Injury: For workers’ compensation purposes, any injury or disease arising out of
employment. There are three types of injuries:

a) specific incident;
b) repetitive or cumulative over time; and,
c) an aggravation of a medical condition which is either pre-existing to
employment or not directly related to employment.

Inland Marine Insurance: Covers property against various risk or losses while
being transported; may, also, be termed “Floater”, for example, builder’s risk,
installation floater, etc.

Insurable Interest: Any interest that may suffer loss by a peril that may be
insured against.

Insurance: (1) A pooling of hazards in order to indemnify those who experience

losses. (2) The contractual relationship between the insured and insurer or
member and pool, who agrees, in return for a premium or contribution, to
indemnify the insured or pool member for losses due to specified causes,
includes specified services.

Insurance Service Office, Inc. (ISO): This New York City based corporation
provides advisory rating, actuarial, statistical and other services (like forms)
related to property and liability insurance but not workers’ compensation
insurance.

Insured: The party to an insurance contract or coverage agreement to whom, or

on behalf of whom, the insurer or pool agrees to pay losses or benefits.

Insured, Additional: A person or entity other than the original named insured
protected under an insurance contract or coverage agreement.

Insured, Named: The insured with whom the insurance contract is made and
who is specifically named as such.

Insuring Clause: The part of a coverage agreement or insurance contract which

constitutes the agreement to protect the insured or pool member against loss
from specified perils or to pay benefits under specified circumstances.
Intangible Property: Property without a physical component; for example,
goodwill, etc.

Interactive Process: A process that is mandated by the California FEHA and

strongly recommended by the Federal ADA intended to provide insured,
employer, and employees the opportunity to discuss and cooperatively determine
the most appropriate plan of action.

L
Law of Large Numbers: Theory of probability that the larger the number of risks
the more closely will the actual results obtained approach the probable results
expected.

Liability: An obligation, usually financial, and the probable cost of meeting the
obligation.

Liability, Contingent: Liability for damages arising out of the acts or omission of
others, not employees or agents.

Liability, Contractual: An obligation assume by contract to pay damages for

which another is legally liable. See, also, Hold Harmless Agreement.

Liability Insurance: Insurance against loss due to claims for damages because
of bodily injury to other parties; also, can include loss under contractual liability
agreement.

Liability Insurance, Products: Coverage against loss due to claims against an

insured or pool member for damages arising from handling, use of, or any
condition in, products manufactured, sold, handled, or distributed by the insured
or member.

Liability Insurance, Property Damage: Coverage against loss due to claims for
damages because of injury to others’ property.

Light Duty: Temporary change in job assignment to accommodate work

restrictions while an injured employee is healing. The position may or may not
pay at the same rate as employee’s normal work assignment. Lost wages may
be partially made up by temporary partial disability (TPD) payments.

Limit, Aggregate: The maximum amount of damages the insurer or pool will pay
under a policy or an agreement, or section of a policy or an agreement, during
the policy or agreement period.

Limit, Basic: The limit of liability for which the basic rate on a liability coverage
agreement is quoted.

Limit, Excess: A limit higher than the basic limit.

Limits: Maximum amount for which an insurer or a pool may be liable for any
loss, as set forth in the policy or coverage document, during a specific period.

Lloyd’s, London: A corporation that maintains facilities for the insurance

business of underwriting and broker members, regulates membership, and
collects and disseminates information.

Lloyd’s, Syndicate: A group of underwriters at Lloyd’s, London who underwrite

insurance as a group but whose liability is several in accordance with agreed
proportions.

Lloyd’s, Underwriter: A member of Lloyd’s, London who underwrites insurance

at Lloyd’s.

Long-Term Disability (LTD): A benefit that provides employees with partial

income replacement if they become sick or injured and cannot work.

Loss: Injury or damage sustained by an insured or the amount for which the
insurer or pool becomes liable on occurrence of the event insured against.

Loss Adjustment Expense: Expenses incurred during claims adjustment; for

example, attorney expense, court costs, etc.

Loss Control: Methods of reducing the frequency and severity of losses

including avoidance, loss prevention, reduction, segregation of exposure units
and non-insurance risk transfer

Loss Development: The phenomenon of change in the dollars of reported or

paid losses for a particular accident year at different points in time.

Loss Development Factor: A factor that is applied to losses from an accident

year evaluated at one particular point in time in order to project the losses for the
same accident year evaluated at a later evaluation point in time.

Loss Payable Clause: A clause in a coverage agreement or insurance contract

providing for payment of loss, for which Chapman University, insurer or pool is
liable to the member or to someone other than the member.
Loss Ratio: The ratio of losses to premiums or contributions.

Loss Reserves, Reported: The liability for losses resulting from accidents or
occurrences that have taken place on which Chapman University, insurer or pool
has received notices or reports of loss.

Losses, Incurred: The amount of loss, paid and reserved, for which Chapman
University, insurer or pool has become liable.

Losses, Paid: The amount of loss for which money has been disbursed by
Chapman University, insurer or pool.

M
Malpractice: Alleged professional misconduct or lack of ordinary skill in the
performance of a professional act.

Mandatory Settlement Conference (MSC): A required conference to discuss

settlement of disputed issues prior to trial.

Margin for Adverse Experience, or Confidence Level: The theoretical

probability of a particular outcome assuming a value less than a specific level.
Usually, this specified level of confidence is defined in terms of a percentage.

Market Value: The value of assets based upon a current market valuation.

Medical Authorization Form: A form releasing medical information of the

involved party(s).

Medical File: The medical file of a patient at a medical facility. This file contains
all the patient’s medical information.

Medical Only Claim (MO): A work related injury case, in which there is no lost
time away from work.

Medical Provider Network (MPN): Under State of California workers’

compensation, any entity or group of providers approved as a Medical Provider
Network by the State of California Workers’ Compensation Administrative
Director pursuant to Labor Code sections 4616 to 4616.7.

Medical Treatment: Treatment reasonably required to ‘cure or relieve’ a third

party claimant or employee from the effects of a liability claim or work-related
injury or illness; also, includes prescriptions or prescribed items such as durable
medical equipment.

Mobile Equipment: General liability coverage for land vehicles, whether self-
propelled or not, not subject to motor vehicle registration.

Mortgagee Clause: A clause in a coverage agreement or insurance contract

making the proceeds payable to a named mortgagee, as its interest may appear,
and stating the terms of the agreement between the insurer or pool and the
mortgagee.

Modified Job or Duty: Scope, extent and type of work an injured employee is
allowed to engage in until released by a physician to return to the work
performed prior to the employee’s injury; also called “Transitional Duty.” An
injured worker will work the position as “usual and customary” held with a
variation or slight limitation until released to usual and customary. A modification
of the usual and customary job is designed to accommodate a Qualified Injured
Worker (see definition). A modified job or duty must meet the following criteria:

1) The employee must be able to perform the essential function of the job;
2) The job must be a regular position lasting at least 12 months;
3) The wages offered must be the same as wages paid at the time of injury;
and,
4) The job must be within a reasonable commuting distance.

Named Insured: Entity with whom an insurance or coverage contract is made

and who is specifically designated by name as being protected.

Named Perils: Named perils policies specify what specific perils are covered
against.

National Association of Insurance Commissioners (NAIC): A national

organization of state officials who are charged with the regulation of insurance.

National Council on Compensation Insurance (NCCI): Statistical and rate

making organization for insurers and pools offering workers’ compensation
coverage.

Nature/Extent of Injury or Damages: The “nature” describes the diagnosis, type

of injury, damage or root cause of loss. The “extent” describes the degree of
severity of the alleged injury or damage. Injuries are analyzed and detailed by
nature in categories.

Negligence: A tort; a failure to do something which a “reasonable person” would

do under the circumstances, or during something a “reasonable person” would
not do.

Negligence Per Se: The unexcused violation of a statute; automatic negligence;

self-evident negligence; e.g., violation of a motor vehicle law.

Nonadmitted Insurer: Insurer not licensed to do business in the jurisdiction in

question.

Noninsurance Transfer: Transfer of a loss exposure to another; for example

indemnity or hold-harmless agreements, being named as an additional insured
under another’s insurance, etc.

Nurse Case Manager (NCM): A Registered Nurse assigned by the self-insured,

insurer or TPA claims adjuster to monitor medical treatments.

O
Obligee: The person or organization protected by a
bond.

Obligor: Principal or Surety to a bond.

Occupational Accident: An accident occurring in the course of employment and

caused by an occupational hazard.

Occupational Disease: Health impairment caused by continued exposure to

conditions inherent in an occupation. A disease arising out of an in the course of
employment and resulting from causes or conditions which are peculiar to, or
characteristic of, a particular trade, occupation, or place of employment.

Occurrence: Continued or repeated exposure to conditions which unexpectedly

results in injury during the period the policy or coverage is in effect.

Order Taking Off Calendar (OTOC): Under workers’ compensation, an order

that places a State of California WCAB claim in an inactive status.

Other Insurance Clause: A clause in a coverage agreement or insurance

contract stating the effect thereon of other insurance.
 P
Paid Losses: Total amount actually paid for a given claim; or group of claims,
losses, loss adjustment expenses, legal fees, etc.

Panel Qualified Medical Evaluator (PQME): Under California workers’

compensation, a list of three independent Qualified Medical Evaluators issued by
the California Division of Workers’ Compensation Medical unit. The injured
employee selects any one of the three physicians for the employee’s evaluation.
A PQME is utilized for workers not represented by an attorney.

Party: The insurer, insured, injured worker, claims administrator, employer,

attorney, and any other person or group possessing an interest in a claim.

Partial Loss: A loss of less than the entire value of property.

Parts of the Body: This tells what part of the body was injured by the accident.
Like nature of injury, this information assists in the development of training plans.
Payee Clause: A clause in a coverage agreement or insurance contract
providing for payment of loss to a person or class of persons.

Peril: The cause of a possible loss.

Permanent and Stationary (P&S): A term used to describe the employee’s

condition as a result of an industrial injury when the injury will neither improve nor
deteriorate. P&S is determined by the treating physician, and is a prerequisite to
determining any permanent disability.

Permanent Disability Advance (PDA): A voluntary lump sum payment on the

undisputed portion of permanent disability due in the future.

Permanent Disability Payments: Mandatory bi-weekly payments of permanent

disability, subsequent to an award.

Permanent Disability Rating: The determination of the level of permanent

disability based on a physician’s medical report. Ratings can be calculated by
claims administrators, attorneys, independent raters or the Disability Evaluation
Unit. A numeric percentage from 1% to 100%.

Personal Injury Insurance: Liability insurance to cover libel, slander, false

arrest, etc.

Petition for Reconsideration: An appeal of decision issued by a workers’

compensation administrative law judge. Typically, it must be filed within 20-30
days of the judge’s final decision.
Physical Evidence: Any evidence of a tangible nature that verifies a loss; e.g.,
photographs, statements, death certificate, contractual documents, etc.

Plan of Action: A detailed schedule of activities with the purpose of the efficient
resolution of the claim, project or assignment.

Policy Year: A coverage and claim experience period that includes the claims
that would be covered by a policy written in that year, regardless of whether the
claims have yet been reported.

Pool: Group of homogenous entities joined together for the purpose of sharing
risk and systematic provision of funds to pay for loss or injury sustained by the
pool’s members.

Power of Attorney: Authority given a person or corporation, called an “Attorney-

In-Fact,” to act for, and obligate another to, a specified extent.

Pre-designation or Pre-designated Physician: Under California workers’

compensation, an employee informs an employer in writing, before a worker
injury, that the employee wishes to be treated by the employee’s personal
physician should a job injury occur. If employee pre-designates a physician, the
employee will be allowed to be treated by the employee’s personal physician
immediately following a worker injury rather than be treated by a physician
selected by the employee’s employer, insurer or TPA.

Pre-Existing Injury or Damages: Damage or injury that was in existence prior to

the occurrence or incident claimed.

Pre-Injury Work: Under workers’ compensation, the work performed on the date
of the injury, with all the duties, functional demands, obligations, rights, rules,
earnings, qualifications, opportunities and other pertinent aspects.

Premises: Particular location or portion thereof as defined by the coverage

agreement or insurance contract.

Premium: Total annual cost of insurance or membership fees charged to an

insured or pool member.

Premium Discount Plan: A plan providing for percentage reductions in

premiums or contributions, the percentage increasing with the size of the risk.

Premium Earned: That part of premium or contribution applicable to the expired

part of the coverage period; including the short-rate premium on cancellation, the
entire premium or contributions on the amount of loss paid under some
agreements, and the entire premium or contribution on the agreement on the
expiration of the coverage period.

Premium, Minimum: The lowest premium or contribution for which an insurer or

a pool will cover a risk for a specified period.

Premium Rate (Contribution Rate): The price per unit of coverage.

Premium, Unearned: That part of the premium or contribution applicable to the

unexpired part of the insurance or coverage period.

Premium Written (Contribution Written): The entire amount of premium or

contributions on insurance contracts or coverage agreements written by an
insurer or pool.

Primary Treating Physician (PTP): Under workers’ compensation, the physician

possessing overall responsibility for treatment of an employee’s industrial injury
or illness; however, only one PTP can exist at any one time.

Principal: The person or organization whose obligations are guaranteed.

Product Liability: Liability imposed for damages caused by an accident and
arising out of goods or products manufactured, sold, handled, or distributed. The
accident must have occurred after possession of goods is relinquished to others.

Prognosis: A physician’s opinion of the future aspect of an injury or illness.

Proof of Loss: A formal written statement of a claim for payment of loss, with
supporting data.

Pro Per: An injured worker or other party third claimant not represented by an
attorney.

Proximate Cause: A cause of loss that in continuous sequence results in an

event, without other effective intervening cause.

Q
Qualified Injured Worker (QIW): An employee whose expected permanent
disability, arising from worker injury, permanently precludes, or is likely to
preclude, the employee from engaging in the employee’s usual occupation or the
position in which the employee was engaged at the time of injury.

Qualified Medical Evaluation (QME): Under California workers’ compensation,

an independent physician certified by the California Division of Workers’
Compensation Medical Unit to perform medical evaluations.

Qualified Rehabilitation Representative (QRR): Under workers’ compensation,

a person trained and able to develop and implement a vocational rehabilitation
plan and whose experience and regular duties involve the evaluation, counseling
or placement of disabled persons; also, known as “rehabilitation counselor.”

R
Rain Insurance: Coverage against loss of expense incurred, or of income
expected, caused by reduction of patronage of sales or other events by rain, hail,
snow or sleet.

Reinsurance: An agreement between an entity or insurer and a reinsurance

company by which the risk of loss is apportioned.

Reinsurance, Excess: Reinsurance against loss in an amount in excess of a

stipulated primary amount.

Reinsurance, Facultative: Reinsurance term meaning the reinsurance company

may exercise its faculty (prerogative) to accept or reject a risk.

Reinsurance, Deferred Premiums: Premium paid to a reinsurer or excess

carrier that has not been earned by the reinsurer as of the date of a specific
financial statement.

Reinsurance, Prepaid Premiums: Include amounts paid by insurer or pools to

reinsurers relating to the unexpired portion of reinsured policies.

Reinsurance, Quota Share: Acceptance by the reinsurer of a share of the risk

or risks of the reinsured, the insurers sharing all losses and expenses as agreed.

Reinsurance, Recoveries: Claim amounts for which the insurer or pool will
recover from reinsurers on claims which meet or exceed the limits established in
the reinsurance treaty.

Reinsurance, Stop-Loss: Excess reinsurance against all loss incurred after an

insurer or pool’s aggregate loss reaches a specified amount.

Reinsurer: An insurer reinsuring risks of another insurer or pool under a contract

of reinsurance.

Renewal: Continuation of coverage agreement or insurance contract beyond the

original date of expiration, by endorsement, certificate, or new contract or
agreement.

Replacement Cost Insurance: Insurance providing that the insured will be paid
the cost of replacing damaged property without deduction for depreciation.

Reserves (Loss Reserves): Unpaid claim liabilities comprised of case reserves

and IBNR reserves.

Res lpsa Loquitor, “The facts speak for themselves”: Injury or damage could
not have happened unless an act or omission occurred. A doctrine or
presumption that when an injury occurs to a third party through a situation under
the sole and exclusive control of the insured where such injury would not have
occurred if the insured had used due care, then it is presumed the insured is
negligent.

Retained Earnings: Fund balance or surplus of uncommitted dollars. This

surplus belongs to a pool’s members and may be utilized at the pool’s Board of
Trustees’ discretion.

Return-To-Work Coordinator (RTWC): An individual whose primary

responsibility is to assist in the development of each injured worker’s Return-to-
Work Plan.

Return-to-Work Plan: An individual plan which is designed to assist the injured

worker to successfully return to work. Return-to-Work Plans include time frames
and schedules that are transitional and depend upon the type of injury, physical
abilities and limitations, skills and pre-accident employment duties of the worker.

Return-To-Work Program: An employer, insurer or self-insured program that

facilitates injured workers return to safe and productive work activities as soon as
physically possible.

Risk: A person or object injured; uncertainty as to the outcome of an event or

process. A measure of the combined probability and severity of potential harm to
one or more resources as a consequence of exposure to one or more hazards.
Mathematically, risk is the simple product of severity and probability that one or
more hazards will impose upon one or more resources. In insurance, a person or
thing insured.

Risk Acceptance: The acceptance by an individual or organization of a level or

degree of risk that has been identified as the potential consequence of a given
course of action.

Risk Assessment: The process of determining the degree of threat that is posed
by one or more hazards to one or more resources, or the product of that process.
Risk may be assessed either subjectively (i.e., nonquantitatively) or numerically.

Risk Management Information System (RMIS): An electronic system utilized

to perform and document claim and billing activities and to provide data and
reports.

Risk Management: The professional assessment of all loss potentials in an

organization’s structure and operations, leading to the establishment and the
administration of a comprehensive loss-control program. Related to and
dependent upon an ongoing program of accident prevention, risk management
encompasses the selection of purchased insurance, self-insurance, and
assumed risk. Its goal is to reduce losses to an acceptable minimum at the
lowest possible cost.

Risk Manager: A management-level person typically responsible for insurance

programs and other activities that minimize losses resulting from fire, accidents,
and other natural and manmade events.

Risk Prevention: The process of minimizing accidental loss by anticipating and

preventing the occurrence of unplanned events. In its broadest form, risk
prevention incorporates a wide range of elements including worker safety and
health, environmental affairs, property conservation, fire protection, security,
transit, product safety, third-party liability, and contractual liability.

Risk-Sharing: The act of accepting a perceived risk that may expose others to a
danger of which they may be unaware or which they accept voluntarily or
involuntarily.

Robbery: The unlawful taking of property by violence, force, or intimidation.

Root Causes of Loss: The major act of omission or commission that resulted
in loss, damage or injury.

S
Salvage: Value of recovered property or sale of partially damaged property.

Self-Insurance Retention (SIR): After a cost-benefit analysis, the optimal

amount per claim or occurrence the insured must pay prior to its insurer or
pool becoming legally liable for additional losses or expenses.

Serious and Willful Misconduct (S&W) Under workers’ compensation a

petition filed if the injury is caused by the serious and willful misconduct of the
employer or the injured worker.
Settlement: An agreement for the resolution of a lawsuit or claim acceptable
to all parties.

Short-Term Disability (STD): Short term disability (STD) plans are designed to
pay a percentage of your salary if you become temporarily disabled, meaning
that you are not able to work for a short period of time due to sickness or injury
(excluding on-the-job injuries, which are covered by workers compensation
insurance).

Sprinkler Leakage Insurance: Coverage against loss from accidental

leakage or discharge from a sprinkler system (in some contracts, fire-
protection equipment) due to cause other than a hostile fire or certain other
specified causes.

State of California Disability Insurance (SDI): A branch of the State of

California Employment Development Department that pays temporary
disability benefits for nonindustrial injuries or illnesses.

Structured Settlement: An alternative to lump sum settlement of workers’

compensation claims, bodily injury claims or court verdicts, typically, arranged
utilizing annuities.

Statute of Limitations: A statute placing a time limit on the bringing of legal

actions.

Statute of Limitations California (Government Code 911.2): “A claim

relating to a cause of action for death or for injury to person or to personal
property or growing crops shall be presented as provided in Article 2
(commencing with Section 915) or this chapter not later than six months after
the accrual of the cause of action. A claim relating to any other cause of action
shall be presented as provided in Article 2 (commencing with Section 915) of
this chapter not later than one year after the accrual of the cause of action.”

Stipulation with Request for Award (STIP): Under workers’ compensation, a

settlement where the parties agree on the terms of an award. STIP may include
any future medical treatment. Payment takes place over time.

Subpoena: A legal document that requires provision of evidence or a witness to

appear at a hearing. Under workers’ compensation, an application for
adjudication must be on file for a subpoena to be valid.

Subrogation: Legal right of one who has paid an obligation owed to another to
collect from the party originally owing the obligation.

Suitable Employment: Under liability or workers’ compensation, any

employment that a claimant or worker possesses the necessary skills to perform,
is medically able to perform and that does not pose a health or safety hazard to
the claimant, worker or any co-worker.

Summary Rating: Under workers’ compensation, the percentage of permanent

disability calculated by the California Division of Workers’ Compensation
Disability Evaluation Unit, based on either the primary treating physician or a
Panel QME. This type of rating is only available for workers not represented by
an attorney.

Surety: The corporation or individual guaranteeing performance or faithfulness

under a bond.

Surplus: Excess of assets of a pool or insurer, determined in accordance with

law, over liabilities and capital, similarly determined.

Survivor Income Benefits (SIB): A benefit program for survivors of insureds or

employees that die either as a direct consequence or result of injury, disease, or
illness.

T
Tangible Property: Property that, by its nature, is susceptible to the senses.

Temporary Disability (TD) or Temporary Total Disability (TTD): A wage

replacement benefit paid subject to a physician report stating that an employee
cannot work due to an industrial injury or illness pursuant to the filing of a
workers’ compensation claim. TD is a non-taxable benefit paid over a seven day
week and is designed to replace wages while an employee is temporarily
disabled.
Temporary Partial Disability (TPD): A wage replacement benefit that may be
paid when an injured employee returns to work but at less than full earnings; also
known as “wage loss.”

Tender: The acceptance by a third party under contract or agreement for

Chapman University’s indemnification, defense and payment of damages.

Theft: Taking and removing property with intent to deprive the rightful owner of it.

Third Party Administrator (TPA): A contractor hired by an insurer or self

insured to adjust its claims. Contractors providing services to an insurer, insured,
self-insured or employer for property, liability, workers’ compensation, Long Term
Disability, or Short Term Disability claims administration and Medical Case
Management.
Timeline: A document typically developed in Medical Malpractice claims
providing chronological sequence of events.

Tort: A legal wrong allegedly committed by Chapman University apart from

responsibility in a contract or agreement. A private or civil wrong or injury other
than breach of contract for which a court may require remedy in the form of an
action for damages.

Elements of a Tort:

1. Existence of legal duty of insured or to plaintiff,

2. Breach of insured’s duty,
3. Breach of insured’s duty resulting in damages.

Tortfeasor: A wrong doer, one who commits a tort.

Total Loss: Loss to an insured or member of the entire value of a lot of goods or
other property by destruction, damage, or deprivation or a loss entailing the
payment of the face amount of a coverage agreement or insurance contract.

Transferable Skills: Skills acquired in the performance of jobs or hobbies that

can be used in other jobs.

Transitional Work: Under workers’ compensation, Long Term Disability, or

Short Term Disability, temporary assignment of tasks to perform while recovering
from injury or illness; also see “Modified Work or Duty.”

Treating Physician: A physician as defined by statute or code who examines or

provides treatment to a claimant or employee.

Trend: Changes in the frequency and/or severity of claims.

Trend Factor: A factor applied to adjust prior years’ losses to reflect the impact
of trends.

U
Ultimate Losses: The total amount of losses for an exposure period. Ultimate
losses are the sum of Paid Losses + Outstanding Case Reserves + IBNR.

Unallocated Loss Expense Payable: The amount of administrative cost of an

insurer or pool to settle open claims if its claims Third Party Administrator (TPA)
contract was canceled.

Underinsurance: Insurance less in amount than the possible loss to which it

applies.

Underwriter: A person whose duty it is to select risks for coverage and to

determine in what amounts and on what terms they will be accepted by an
insurer or pool.

Undue Hardship: Evidence of detrimental impact on the productivity, operation

or profitability of an employer’s business. Used in connection with employer’s
duty to alter the work or the work environment to facilitate an injured worker’s
return to work.

Unearned Premium: The pro rata portion of the premiums or contributions in

force applicable to the unexpired period of the policy or coverage term.

Unoccupied: Furnished but not resided or worked in.

Unpaid Losses: Total of case reserves on open claims and IBNR reserves.

Unreported Losses Recoverable: The amount Chapman University, insurer or

pool anticipates would be returned to Chapman University, insurer or pool by the
reinsurer on IBNR.

Unsafe Acts: Such acts are errors in judgment that cause loss or injury.

Usual and Customary (U&C): Referring to the employee’s ordinary or regular

work at the time of injury.

Utilization Review (UR): A systemic review conducted by a professional that

evaluates the appropriateness, quality, and need for health care services
rendered to injured workers.
V
Vacant: Not furnished, resided in or worked in.

Vehicle Physical Damage Claim: Damage to the insured or an insured’s owned

vehicle.

Verified Claim: A claim for loss or damage filed with the Executive Office of the
Board of Supervisors under Government Code Section 911.2.

Vicarious Liability: Liability for another’s acts.

Vocational Rehabilitation (VR): Services provided to an employee unable to
return to the employee’s customary job. These services may include, but are not
limited to, vocational and medical evaluation, counseling, job analysis, job
modification assistance, modification of the worksite to accommodate the
disability, job placement assistance or a formal training program, and placement
assistance into a new, more appropriate line of work.

Vocational Rehabilitation Plan (VRP): A written description that proposes the

method for a qualified injured worker to be returned to suitable gainful
employment. The plan typically specifies the anticipated completion date of
vocational rehabilitation services and the amount and source of payments to be
made to the qualified injured worker during the period of the plan.

Voice Recognition: A software program that recognizes an individual’s voice

pattern to allow for an alternative means of computer input rather than the
keyboard.

W
Wage Loss: Temporary Disability benefits that may be paid when an insured or
employee returns to work at less than full earnings; also, known as “Temporary
Partial Disability.”

Waiver: Voluntary surrender of a right or privilege known to exist.

Waiver of Subrogation: Voluntary release, before a loss, by a subrogee of

rights which, after a loss, it may become subrogated.

Warranty: A clause in a coverage agreement or insurance contract prescribing a

condition relating to the degree of hazard, noncompliance with which invalidates
the agreement contract.

Warranty, Implied: A warranty assumed to be a part of the coverage agreement

or insurance contract, even though not expressly included.

Witness: Person who has first hand information or knowledge of the claim,
occurrence or incident.

Witness, Expert: A person most qualified to provide analysis of the events or

injuries arising from a claim.

Workers’ Compensation: Statutorily established insurance or self-insurance

providing coverage for the work related injuries sustained by insureds,
employees, officials and, in some cases, volunteers.

Workers’ Compensation Appeals Board (WCAB): In the State of California,

the judicial unit that formally resolves workers’ compensation disputes.

Work Hardening: Work duties used as part of a recovery program that

conditions and strengthens the worker’s physical capabilities and increases
workday tolerance.

Work Hardening Transitional Assignment Agreement (WHTAA): The

agreement used to document the specifics regarding a work hardening
assignment.

Work Restrictions: Limitations of work activities which are imposed by a

physician based upon objective medical evidence.

Y
Year 2000 Problem: Inability of a computer system, microprocessor, computer
chips not part of a computer or microprocessor, or other computerized, electronic
equipment or components to correctly recognize, process, distinguish, interpret
or accept the year 2000 and beyond.