©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED
FIRST PUBLISH OCTOBER 2024
AINS 21 Glossary Terms and Definitons
loss exposure - ANSWER✔✔-any condition or situation that presents the possibility of a loss
law of large numbers - ANSWER✔✔-a mathematical principle stating that as the number of similar but
independent exposure units increases, the relative accuracy of predictions about future outcomes
(losses) based on these exposure units also increases
exposure unit - ANSWER✔✔-a measure of the loss exposure assumed by the insurer, used in pricing
insurance
property loss exposure - ANSWER✔✔-any condition or situation that presents the possibility that a
property loss will happen
real property - ANSWER✔✔-land, buildings, and other structures attached to the land or embedded in it
personal property - ANSWER✔✔-all tangible or intangible property that is not real property
net income - ANSWER✔✔-revenue minus expenses and taxes during a given time period
net income loss - ANSWER✔✔-an indirect loss caused by a reduction in revenue, an increase in
expenses, or both during a given time period
Page 1/35
, ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED
FIRST PUBLISH OCTOBER 2024
liability loss exposure - ANSWER✔✔-any condition or situation that presents the possibility of a claim
alleging legal responsibility of a person or business for injury or damage suffered by another party
liability loss - ANSWER✔✔-a claim for monetary damages because of injury to another party or damage
to another party's property
personal loss exposure - ANSWER✔✔-any condition or situation that presents the possibility of a
financial loss to an individual or a family by such causes as death, sickness, injury, or unemployment
personnel loss exposure - ANSWER✔✔-any condition or situation that presents the possibility of a
financial loss to a business because of the death, disability, retirement, or resignation of key employees
indemnify - ANSWER✔✔-to restore a party who has sustained a loss to the same financial position that
party held before the loss occurred
fire and allied line insurance - ANSWER✔✔-insurance that covers direct damage to or loss of insured
property
business income insurance (business interruption insurance) - ANSWER✔✔-insurance that covers the
loss of net income or additional expenses incurred by a business as the result of a covered loss to its
property
crime insurance - ANSWER✔✔-insurance that covers money, securities, merchandise, and other
property from various causes of loss such as burglary, robbery, theft, and employee dishonesty
Page 2/35
, ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED
FIRST PUBLISH OCTOBER 2024
ocean marine insurance - ANSWER✔✔-insurance that covers ships and their cargo against such causes of
loss as fire, lightning, and "perils of the seas"
inland marine insurance - ANSWER✔✔-insurance that covers miscellaneous types of property, such as
movable property, goods in domestic transit, and property used in transportation and communication
auto physical damage insurance - ANSWER✔✔-insurance that covers loss of or damage to specified
vehicles from collision, fire, theft, or other causes
auto liability insurance - ANSWER✔✔-insurance that covers an insured's legal liability arising out of the
ownership, maintenance, or use of an automobile
commercial general liability insurance - ANSWER✔✔-insurance that covers liability loss exposures arising
from a business organization's premises and operations, its products, or its completed work
personal liability insurance - ANSWER✔✔-insurance that provides liability coverage to individuals and
families for bodily injury and property damage arising from the insured's personal premises or activities
professional liability insurance - ANSWER✔✔-insurance that provides liability coverage to professionals
for errors and omissions arising out of their professional duties
whole life insurance - ANSWER✔✔-life insurance that provides lifetime protection, accrues cash value,
and has premiums that remain unchanged during the insured's lifetime
Page 3/35
, ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED
FIRST PUBLISH OCTOBER 2024
cash value - ANSWER✔✔-the monetary amount, considered to be a form of savings, that accumulates in
a whole life insurance policy
term insurance - ANSWER✔✔-life insurance that provides coverage for a specified period, such as ten or
twenty years, with no cash value
universal life insurance - ANSWER✔✔-insurance that provides life insurance protection and a savings
component
medical insurance - ANSWER✔✔-insurance that covers medical expenses that result from illness or
injury
disability income insurance - ANSWER✔✔-a type of health insurance that provides periodic income
payments to an insured who is unable to work because of sickness or injury
stock insurer - ANSWER✔✔-an insurer that is owned by its stockholders and formed as a corporation for
the purpose of earning a profit for the stockholders
mutual insurer - ANSWER✔✔-an insurer that is owned by its policyholders and formed as a corporation
for the purpose of providing insurance to them
demutualization - ANSWER✔✔-the process by which a mutual insurer owned by its policyholders
becomes a stock company, which is then owned by its stockholders
Page 4/35
FIRST PUBLISH OCTOBER 2024
AINS 21 Glossary Terms and Definitons
loss exposure - ANSWER✔✔-any condition or situation that presents the possibility of a loss
law of large numbers - ANSWER✔✔-a mathematical principle stating that as the number of similar but
independent exposure units increases, the relative accuracy of predictions about future outcomes
(losses) based on these exposure units also increases
exposure unit - ANSWER✔✔-a measure of the loss exposure assumed by the insurer, used in pricing
insurance
property loss exposure - ANSWER✔✔-any condition or situation that presents the possibility that a
property loss will happen
real property - ANSWER✔✔-land, buildings, and other structures attached to the land or embedded in it
personal property - ANSWER✔✔-all tangible or intangible property that is not real property
net income - ANSWER✔✔-revenue minus expenses and taxes during a given time period
net income loss - ANSWER✔✔-an indirect loss caused by a reduction in revenue, an increase in
expenses, or both during a given time period
Page 1/35
, ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED
FIRST PUBLISH OCTOBER 2024
liability loss exposure - ANSWER✔✔-any condition or situation that presents the possibility of a claim
alleging legal responsibility of a person or business for injury or damage suffered by another party
liability loss - ANSWER✔✔-a claim for monetary damages because of injury to another party or damage
to another party's property
personal loss exposure - ANSWER✔✔-any condition or situation that presents the possibility of a
financial loss to an individual or a family by such causes as death, sickness, injury, or unemployment
personnel loss exposure - ANSWER✔✔-any condition or situation that presents the possibility of a
financial loss to a business because of the death, disability, retirement, or resignation of key employees
indemnify - ANSWER✔✔-to restore a party who has sustained a loss to the same financial position that
party held before the loss occurred
fire and allied line insurance - ANSWER✔✔-insurance that covers direct damage to or loss of insured
property
business income insurance (business interruption insurance) - ANSWER✔✔-insurance that covers the
loss of net income or additional expenses incurred by a business as the result of a covered loss to its
property
crime insurance - ANSWER✔✔-insurance that covers money, securities, merchandise, and other
property from various causes of loss such as burglary, robbery, theft, and employee dishonesty
Page 2/35
, ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED
FIRST PUBLISH OCTOBER 2024
ocean marine insurance - ANSWER✔✔-insurance that covers ships and their cargo against such causes of
loss as fire, lightning, and "perils of the seas"
inland marine insurance - ANSWER✔✔-insurance that covers miscellaneous types of property, such as
movable property, goods in domestic transit, and property used in transportation and communication
auto physical damage insurance - ANSWER✔✔-insurance that covers loss of or damage to specified
vehicles from collision, fire, theft, or other causes
auto liability insurance - ANSWER✔✔-insurance that covers an insured's legal liability arising out of the
ownership, maintenance, or use of an automobile
commercial general liability insurance - ANSWER✔✔-insurance that covers liability loss exposures arising
from a business organization's premises and operations, its products, or its completed work
personal liability insurance - ANSWER✔✔-insurance that provides liability coverage to individuals and
families for bodily injury and property damage arising from the insured's personal premises or activities
professional liability insurance - ANSWER✔✔-insurance that provides liability coverage to professionals
for errors and omissions arising out of their professional duties
whole life insurance - ANSWER✔✔-life insurance that provides lifetime protection, accrues cash value,
and has premiums that remain unchanged during the insured's lifetime
Page 3/35
, ©EMILLECT 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED
FIRST PUBLISH OCTOBER 2024
cash value - ANSWER✔✔-the monetary amount, considered to be a form of savings, that accumulates in
a whole life insurance policy
term insurance - ANSWER✔✔-life insurance that provides coverage for a specified period, such as ten or
twenty years, with no cash value
universal life insurance - ANSWER✔✔-insurance that provides life insurance protection and a savings
component
medical insurance - ANSWER✔✔-insurance that covers medical expenses that result from illness or
injury
disability income insurance - ANSWER✔✔-a type of health insurance that provides periodic income
payments to an insured who is unable to work because of sickness or injury
stock insurer - ANSWER✔✔-an insurer that is owned by its stockholders and formed as a corporation for
the purpose of earning a profit for the stockholders
mutual insurer - ANSWER✔✔-an insurer that is owned by its policyholders and formed as a corporation
for the purpose of providing insurance to them
demutualization - ANSWER✔✔-the process by which a mutual insurer owned by its policyholders
becomes a stock company, which is then owned by its stockholders
Page 4/35
