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BAILEE

A person who has lawful, temporary possession of the personal property of another in trust for a specific purpose, and who is obligated to return it. (See Bailor.)

BAILMENT

Delivery of goods or money by one person to another in trust for some special purpose, upon a contract, expressed or implied, that the trust shall be faithfully executed. When you send a suit to the cleaner, there is a bailment.

BAILMENT LEASE

A method by which someone who wants to purchase an article but cannot afford to pay cash for it, may get possession of it with the right to use and enjoy it as long as he/she pays stipulated rentals. After completing these installment payments, he/she becomes the absolute owner by paying an additional sum, which may be nominal. The transaction differs from a conditional sale, since in a conditional sale there is a debtor- creditor relationship.

BAILOR

The person who gives or entrusts their personal property to another person. (See Bailee.)

BALANCES CHARGED OFF

An Agent's outstanding account balances charged off as uncollectible.

BANK CHECK PLAN

A term for a simplified method of monthly premium payment. At request of insured, the company draws monthly drafts on the insured's checking account. The premium is based on the semi-annual rather than the regular monthly rate.

BANKRUPT

A person whose property becomes liable to administration under the bankrupt laws because of insolvency.

BARRATRY

In marine insurance, this refers to wrongful acts willfully committed by the master or crew of a ship resulting in loss to the owners of the ship or cargo.

BASE RATE

The rate, from which discounts are given or charges are added, to compensate for the individual circumstances of the risk.

BASIC LIMITS OF LIABILITY

Minimum amounts of auto insurance usually used in reference to Bodily Injury and Property Damage limits for the minimum amount an insurer is willing to underwrite or the minimum amount required by law.

BENEFICIARY

The person to whom the proceeds of a life insurance policy are payable when the insured dies. There are, however, various types of beneficiaries. Primary beneficiaries are those who are first entitled to the proceeds. Secondary beneficiaries are those who are entitled to proceeds if no primary beneficiaries are living when the insured dies. Tertiary beneficiaries are those entitled to proceeds if no primary or secondary beneficiaries are alive when the insured dies. Secondary and tertiary beneficiaries are also referred to as alternate or contingent beneficiaries since their claims are contingent on the deaths of primary beneficiaries occurring before the insured dies.

BENEFIT PERIOD

In health insurance, the length of time money will be payable by the insurer to the insured under the provisions of an insurance policy.

"BESTS"

Books of summary data on insurance companies compiled from annual statements and showing premiums, losses, expenses and ratios plus financial standing. Produced by Alfred M. Best Company.

BILL OF LADING

A written document issued by a common carrier, acknowledging receipt of the goods named and stating the terms of the contract of carriage.

BINDER

A statement that coverage is in force; a preliminary, temporary agreement between the carrier and the insured to provide immediate coverage. The purpose of the binder is to provide temporary coverage until the policy arrives.

BINDING RECEIPT [LIFE]

The receipt for the first payment of the first premium which assures the applicant that, if he or she dies before receiving the policy, the company will pay the full claim if the policy is issued or would be issued as applied for upon receipt of the application.

BLACKOUT PERIOD

That period of time during which no "widow's income" is provided by Social Security. It begins when a widow's youngest child becomes age 16 and ends at her age 65 (or age 60 and after for reduced benefits).

BLANKET INSURANCE

A policy which covers several different properties or several different types of hazards under one form, instead of under separate policies such as:

1. One kind of property insured in more than one location;

2. Two or more kinds of property in one location; or

3. Two or more kinds of property in one or more locations.

BOARDS, BUREAUS, COMMISSIONS

Administrative bodies usually under State control, whose main function is to regulate the transaction of the business of insurance. This term also applies to authorities set up and founded by insurance carriers for the purpose of establishing rates and rules which when fixed, must be followed by subscribing members.

BODILY INJURY LIABILITY

The liability imposed by law on one person for negligently injuring or killing another.

BOND

See Fidelity Bond and Surety Bond.

BOND, BAIL

A bond guaranteeing appearance in court of the principal.

BOND, FIDELITY

Indemnifies an employer for loss sustained through dishonest acts of his/her bonded employees.

BORDER LINE RISK

A risk whose acceptability, from an underwriting standpoint, is questionable.

BORDEREAU

Memorandum containing detailed information concerning documents that accompany it. Used extensively in passing reinsurance from one company to another under a reinsurance agreement. Premium bordereau is a monthly account summarizing the premiums due the reinsurer for all risks reinsured. Loss bordereau is a summary loss advice which the ceding company submits to the reinsurer in reporting losses. Each form sets forth such information as policy number, class of risk, gross premium, net premium, and reinsurer's participation. Bordereaux are used only in connection with Surplus or Pro Rata treaties.

BRANCH CLAIMS OFFICE (BCO)

An office located within the territory of the Regional Office that handles any claims for the insured or claimant.

BROAD FORM

Includes all of the coverages of Fire and Extended Coverage plus these other perils: V&MM, glass breakage, burglars, falling objects, weight of ice or snow, collapse, accidental discharge, freezing, and artificially generated electrical currents.

BROKER

A person who acts as the representative of the applicant for insurance. Although brokers are compensated with a commission from the insurance company (just like agents), they do not represent the company. Their sole duty is to get the best possible coverage for their clients at the lowest possible cost.

BUILDERS' RISK

Insurance on a building in the course of construction.

BUILDING RATE

The fire insurance on a building in contrast to its contents.

BURGLAR ALARMS

See "Working Burglar Alarms."

BURGLARY

Forcible and unlawful entry into a building for the purpose of committing a crime. Forcible entry, where there must be visible marks at the place of entry from the use of tools, explosives, gas or chemicals.

BUSINESS INSURANCE; PARTNERSHIP INSURANCE; CORPORATION INSURANCE

Insurance concerned primarily with the protection of an insured's business or vocation. Business insurance protects a business against the loss of its valuable lives or key people; stabilizes the business through the establishment of better credit relations; and can provide a practical plan for the retirement of business interests in the event of the death of one of the owners.

BUSINESSOWNERS POLICY

Similar to the commercial package policy (CPP), it provides broad property and liability protection in a single contract and is designed for small and medium-sized businesses.

BUSINESS INTERRUPTION INSURANCE

Protects against the loss of prospective earnings because of the interruption or suspension of business caused by fire or other hazards.

BUY-SELL AGREEMENT

An agreement that a deceased business owner's interest will be sold and purchased at a predetermined price, or at a price according to a predetermined formula.