OASDHI
(See Old Age, Survivors, Disability, and Health Insurance.)
[O066]
Obligatory treaty
An agreement between a primary insurer and a reinsurer that obligates the former to pass on (cede) and the reinsurer to accept all risks that fit the guidelines established by the agreement. For instance, an automatic treaty may require Insurer A to automatically cede any homeowner policy with a dwelling limit at or above $300,000.
[O001]
Obligee
The party in whose favor a bond runs, such as the party protected from loss under the bond.
[O002]
Obligor
One bound by the obligation covered by a bond. Also called the principal.
[O060]
OCC
This position was originally created in 1863 and it oversees the chartering and supervision of all national banks, as well as foreign banks. Among its various duties, the office conducts bank audits and issues as well as interprets rules governing banking operations. The OCC, due to the effect of the Gramm-Leach Bliley Act, is beginning to have an influence on insurance regulation. Since banks, through holding companies, have increased their involvement in selling insurance, the OCC has increased its interest in the supervision and regulation of insurance activity. Headquarters: Washington, DC.
[O003]
Occupancy
1) The use to which a building is put.
2) The type of contents a building contains.
[O055]
Occupation class
In life and disability insurance, the hazard of occupation can mean an additional premium charge. Occupations are lumped into various different classes with clerical occupations being the least hazardous.
[O004]
Occupational accident
Injury or accident occurring at or because of an employee's job, usually caused by a condition resulting from that job or occupation.
[O005]
Occupational disease
Impairment of health due to continuous exposure to hazards inherent in a person's occupation. Compensable under most workers compensation laws.
[O006]
Occupational hazard
A condition or hazard that occurs during or as a result of an employee's occupation or job that increases the potential for certain types of accidents, sicknesses, illnesses, or death.
[O007]
Occupational Safety and Health Act (OSHA)
A federal statute establishing requirements for safe and healthy working conditions on a nationwide basis. Enforced by Labor Department safety inspectors and providing compilation of relevant statistics on work injuries and illnesses.
[O069]
Occupational upper extremity cumulative trauma disorders
Skeletal and muscular problems such as carpal tunnel and thoracic outlet syndromes that typically arise from poor office ergonomics.
[O008]
Occurrence
1) In a non-insurance sense, an incident, event or happening. In insurance, the term may be defined as continual, gradual or repeated exposure to an adverse condition, which is neither intended nor expected to result in injury or damage as contrasted with an accident, which is a sudden happening. In reinsurance, per-occurrence coverage permits all losses arising out of one event to be aggregated instead of being handled on a risk-by-risk basis.
2) One basis or determinant for calculating the amount of loss or liability in insurance or reinsurance when an aggregation of related losses is to constitute a single subject of recovery. For example, in property catastrophe reinsurance treaties, occurrence is usually defined so that all losses within a specified period of time involving a particular peril are deemed an occurrence.
[O009]
Occurrence policy
The traditional occurrence liability insurance method provides coverage for losses from liability-imposing causes which occurred during the policy period, regardless of when the claim is asserted. Once the policy period is over in a claims-made form, the approximate extent of the underwriter's liability is known. With the traditional occurrence liability coverage method, the underwriter may not discover the extent of liability for years to come from losses claimed to have occurred within the policy period.
[O010]
Ocean cargo insurance
A type of marine insurance that provides property protection for cargo that is being shipped by sea or over water.
[O011]
Ocean marine insurance
The protection of ships, their cargoes, and the freight, including protection and indemnity insurance to cover shipowners' liabilities for loss of life to any person, illness or injury to crew, damage to cargoes carried, and damages to fixed or floating objects.
[O061]
OCIP (owner-controlled insurance program)
(See Owner Controlled Insurance Program, also see Wrap.)
[O012]
OCP--owners and contractors protective liability insurance
A policy which provides liability coverage for the insured for the negligent acts of contractors and subcontractors hired by the insured. May also cover for their own negligent supervision of the work performed.
[O074]
OCSLA
(See Outer Continental Shelf Lands Act.)
[O067]
Odd time
The portion of a policy period that extends beyond 12 months, typically used in order to allow one policy to conform to another policy's effective dates.
[O013]
Odds
A ratio used to express the predicted chance that an event will occur.
[O062]
OEM
Commonly used with the automobile industry, it refers to a manufacturer that originally made the auto parts used in the auto construction. It also refers to the perception that OEM parts consists of more quality than "aftermarket" parts.
[O063]
Office of the Comptroller of Currency (OCC)
This position was originally created in 1863 and it oversees the chartering and supervision of all national banks, as well as foreign banks. Among its various duties, the office conducts bank audits and issues as well as interprets rules governing banking operations. The OCC, due to the effect of the Gramm-Leach Bliley Act, is beginning to have an influence on insurance regulation. Since banks, through holding companies, have increased their involvement in selling insurance, the OCC has increased its interest in the supervision and regulation of insurance activity. Headquarters: Washington, DC.
[O014]
Off-premises clause
Language which may be added to a policy indicating that personal property is covered when elsewhere than on the premises described in the policy.
[O015]
Off-premises services coverage
Property and time element endorsements designed to cover the insured for losses that result from the interruption of services by an insured cause of loss. The current endorsements allow the insured to select coverage for off-premises services, whether supplied by a private or public utility. Protection may be purchased for the following options: water suppliers, communication suppliers, or power supplies.
[O016]
Office burglary and robbery policy
This form (now obsolete) provided one blanket limit of insurance for loss of money, securities, office equipment, and fixtures by robbery, either inside or outside, and burglary. The same coverage is available but on an ala carte basis through the Commercial Crime Policy.
[O017]
Officers and directors liability insurance
Protects officers and directors of a corporation against damages from claims resulting from negligent or wrongful acts in the course of their duties. Also covers the corporation (and even the officers and directors in some cases) for expenses incurred in defending lawsuits arising from alleged wrongful acts of officers or directors. These policies always require the insured to retain part of the risk uninsured.
Offshore/ Space and Transportation Insurance
Another term for marine and aviation insurance.
Old Age, Survivors, Disability, and Health Insurance
This is the formal name for Social Security, the federal plan that pays benefits to workers who reach a mandated retirement age. The benefits are based upon the person’s contributions made via the federal government’s income withholding tax.
[O018]
OLT--owners, landlords and tenants liability insurance
Insurance of the liability arising from the ownership, occupancy, operation or maintenance of premises. This is part of the commercial general liability coverage.
[O019]
Omissions clause
A provision that applies to treaty reinsurance agreements. In those cases where the reinsurance treaty would have normally applied to a risk, but the ceding insurer unintentionally omitted the risk from the Bordereau (the report of ceded risks), the omitted risk is still covered.
[O020]
Omnibus clause
A part of an automobile or yacht liability policy which extends coverage to persons and organizations other than the named insured, such as members of the insured's family, servants and others using the automobile with the owner's permission. When these extensions were introduced, the policy was said to have an "omnibus clause."
[O021]
Open cargo policy
A marine coverage, inland or ocean, protecting cargo during its entire transit period. Open policies are contracts designed to cover shipments fluctuating in number and value with varying amounts of insurance, requiring the insured periodically to report details of those shipments to the insurer. An initial deposit premium is required at the inception of the policy, with premiums due calculated after the reports are received by the insurer. The open policy does not specify an expiration date, which is another feature of its open and continuous nature. Ocean marine cargo policies are generally written on this basis.
(See endorsement in blank.)
[O022]
Open cover
A reinsurance placement arrangement, where the ceding insurer may declare and insure specific types of risks on an open basis, as they become known or are identified by the insurer.
[O023]
Open enrollment
A period of time during which new subscribers may elect to enroll in a health insurance plan or prepaid group practice. In the Health Maintenance Organization Act of 1973 (P. L. 93-222), the term refers to periodic opportunities for the general public, on a first-come, first-served basis, to join an HMO.
[O068]
Open penalty
A bond with an unlimited liability (surety).
[O024]
Open perils
A version or type of "all-risk" property insurance in which all perils or causes of loss not otherwise excluded are covered.
Open pilot provision
(See Open Pilot Warranty.)
Open pilot warranty
An aircraft liability policy clause (often found on the declarations page) which extends coverage to situations where the aircraft owner/pilot permits other qualified pilots to operate his or her insured plane.
[O025]
Open policy
An insurance contract designed to cover shipments fluctuating in number and value with varying amounts of insurance, requiring the insured periodically to report details of those shipments to the insurer. An initial deposit premium is required at the inception of the policy, with premiums due calculated after the reports are received by the insurer. The open policy does not specify an expiration date, which is another feature of its open and continuous nature. Ocean marine cargo policies are generally written on this basis.
(See reporting policy (or form).)
[O026]
Open slip
A Lloyd's of London mechanism which gives a type of blanket prior approval to a broker for coverage of any account that meets the requirements set forth on the "slip."
[O027]
Open stock burglary policy
(See definition for mercantile open stock.)
[O028]
Operating income/profit
The algebraic sum of the net investment income and net underwriting income for any reporting period.
[O070]
Operating ratio
The addition of the ratio of losses incurred to earned premiums, and the ratio of underwriting expenses to written premiums.
Operation of building laws
(See ordinance or law exclusion.)
[O029]
Operations liability
The exposures related to the normal ownership, maintenance, and use of a commercial premises, including the conduct of the risk's business activities. This exposure does not include products or completed operations liability.
[O030]
Option
A life insurance concept applying to those policies that offer the insured or beneficiary a selection of the ways or methods to be used for the payment of benefits. Each of the different selections available is an option.
[O057]
Option A - universal life
The death benefit remains level and the cash value builds separately. Upon death the death benefit is paid.
(See also Option B.)
[O058]
Option B - universal life
The death benefit and cash value are combined to produce an increasing death benefit. Upon death the combination of the two are paid.
[O031]
Optional life insurance settlement modes
A life insurance concept applying to those policies that offer the insured or beneficiary a selection of the ways or methods to be used for the payment of benefits. Each of the selections available is an option or mode.
[O032]
Optionally renewable contract
A group health contract that gives the insurer the express right to determine if the contract is to be renewed or terminated upon each renewal period. Not a continuous contract.
[O071]
Or so deemed
An agreement to treat a condition or circumstance in a given manner, regardless of any specific details.
[O033]
Ordinance or law coverage
A property endorsement that provides the insured the option to purchase coverage for three types of common building ordinance or law requirements that apply after an insured has suffered a physical damage loss such as fire. These ordinance or law damages are normally excluded in standard property coverage forms. The coverages available in this endorsement are cost to demolish the undamaged portion of the building, cost to replace with superior construction as required by law, and cost to clear the land of debris after demolition.
[O034]
Ordinance or law exclusion
An exclusion found in most standard property coverage forms that clarifies that there is no coverage for loss or damage that occurs as a direct result of the enforcement of any law or ordinance regarding construction, use, or repair of property. Nor does it cover any property that has to be torn down as required by ordinance or law, after a fire or other physical damage loss, even if that damage is a result of an otherwise covered cause of loss.
[O035]
Ordinary life insurance
Standard or ordinary whole life insurance coverages that cover the lifetime of the insured, usually available in multiples of $1,000. Premiums are collected annually or in some type of annual payment plan and continue for a significant period of time until the policy is paid in full, normally at an age close to retirement.
[O059]
Original age conversion
A term life insurance policy that converts to a higher form of premium paying policy (whole life) at the original age (age at application).
[O072]
Original conditions
All of the insurance policy provisions (including any modifications) that are referenced and incorporated (as is) into a reinsurance agreement (either facultative or treaty).
[O036]
Original cost
The purchase price of the covered property.
[O064]
Original equipment manufacturer (OEM)
Commonly used with the automobile industry, it refers to a manufacturer that originally made the auto parts used in the auto construction. It also refers to the perception that OEM parts consists of more quality than "aftermarket" parts.
[O037]
OSHA--Occupational Safety and Health Act
A federal statute establishing requirements for safe and healthful working conditions on a nationwide basis. Enforced by Labor Department safety inspectors and providing compilation of relevant statistics on work injuries and illnesses.
[O038]
Other insurance clause
Language in many policies which states the method for apportioning the loss between two or more policies covering the same property at the time of loss.
Other than collision coverage
(See comprehensive automobile coverage.)
[O073]
OUECTD (occupational upper extremity cumulative trauma disorders)
Skeletal and muscular problems such as carpal tunnel and thoracic outlet syndromes that typically arise from poor office ergonomics.
[O039]
Outage insurance
A contingent property or time element coverage to protect an insured from loss of income that occurs as a result of damage to machinery that is not operable, due to direct damage cause of loss. Currently, it may be covered by a boiler and machinery or machinery and equipment policy.
[O040]
Outboard motor and boat policy
A class of inland marine business covering boats, motors and equipment for named perils (fire, collision and theft) or, at a higher premium, for "all risks." Some policies include liability coverage for property damage to other vessels.
[O075]
Outer Continental Shelf Lands Act
This is an extension of the U.S. Longshore and Harbor Workers Compensation Act which provides Workers Compensation protection to a special class of workers. It protects persons (such as miners and oil rig drillers) who work on the submerged land (outer shore) that rings the U.S. and its possessions.
[O041]
Outservant
In workers compensation, insurance written to protect a domestic servant whose principal duties are outside, such as a gardener or chauffeur.
[O042]
Outside employee
An employee such as a salesperson, messenger or inspector whose duties keep the employee away from headquarters. Frequently used in bonding.
[O043]
Outside holdup insurance
This form (now obsolete) provided coverage for robbery outside of the premises. It is now called Outside the Premises insuring agreement under the Commercial Crime policy and covers theft and robbery of a messenger.
[O076]
Outsourcing coverage
May be thought of any insurance product used to address a tangible loss related to contracting the performance of certain company operations to outside service providers. Note that such exposures are typically handled via other risk management techniques.
Overhead expense insurance
Refers to form that responds to the need to handle an operation’s continuing business expenses during the time that the business owner is suffering a temporary disability.
[O045]
Overinsurance
Coverage in amounts greater than the value of the property insured or the amount of loss sustainable by the insured; for example, several policies of hospitalization insurance for a total amount in excess of daily room charges.
[O046]
Overlapping insurance
When two or more different kinds of policies cover the same loss, the insurance is said to be "over-lapping," as opposed to two or more policies of the same kind, which is "contributing" insurance. Contributing insurance is illustrated by two fire insurance policies covering the same loss. However, if an inland marine policy and a fire policy cover the same loss, they are overlapping insurance.
(See contribution clause, and guiding principles.)
[O047]
Overline
1) The amount of coverage or the limit that is in excess of the insurer's set retained line limit or capacity.
2) A commitment or agreement by an insurer or reinsurer to provide coverage in excess of normal capacity or its set line limit.
[O048]
Overriding commission
That portion of a commission received and retained by a general agent after paying the other portion to a producing agent whose business is supervised by that general agent. Also known as overwriting commission.
[O049]
Overtraded
The acceptance of more insured risks by an underwriter than permitted by underwriting rules of the insurer.
Own occupation
A level of disability, meaning that an injured person is unable to perform a specific job that he or she had the training and /or skill to do if he or she were not disabled.
[O065]
Owner-controlled insurance program (OCIP)
An insurance program for larger construction projects that, typically, is purchased and administered by the project's owner which may be either a private or a public entity. Also see wrap.
[O050]
Owners and contractors protective liability insurance (OCP)
A policy which provides liability coverage for the insured for the negligent acts of contractors and subcontractors hired by the insured. May also cover for their own negligent supervision of the work performed.
[O051]
Owner's equity
1) The ownership, financial interest or property rights of owners in an enterprise.
2) The excess of assets over liabilities of an enterprise.
[O052]
Owners, landlords and tenants liability insurance (OL&T)
Insurance of the liability arising from the ownership, occupancy, operation, or maintenance of premises.
[O053]
Ownership of expirations
In the operation of the American agency system, the independent agent's right to have or hold as property the records of customers secured and served by that agent (dates and details of expiring policies). Such ownership is contrasted with an exclusive agent's records of policyholders served by the exclusive agent which are owned by the insurer represented by the exclusive agent.
(See expiration.)
[O054]
Ownership provision
A life insurance contract provision permitting ownership of the policy by a party other than the insured.
