Glossary of Insurance Terms

Joint and Several Liability

A legal obligation under which a party may be liable for the payment of a total court judgment and related costs, even if that party is only partially responsible for the loss.

Liability Insurance

Insurance that pays on behalf of an insured for defined losses such as injuries arising out of certain acts, or a failure to act.

Liability LimitsĀ 

The maximum amount of money a policy will pay in the event of a claim. Depending on the type of policy, defense costs may or may not be included in the limit of liability.

Limits

The maximum amount of coverage that can be paid for a covered loss.

Liquor Liability Coverage

Liability coverage that protects an association from lawsuits that might arise from the serving of alcohol in the common areas of the association.

Loss Run

This is a written statement provided by an insurance company that sets forth exactly when, how much and what type of losses were incurred by the insured.

Master Policy

This is a policy that protects an association from most types of property losses and from general liability lawsuits. The precise scope of the coverage will vary from company to company.

Mitigation

Limiting the amount of total loss that occurs once an initial loss has occurred. For example, once a plumbing leak is detected, shutting off the water.