Insurance and risk management terminology · MLC-0106

Insurance and risk management terms: L (166)

• Labor union group life insuranceA life insurance plan offered by a labor union to its members, structured as a group policy. The union is the...
• LapseThe termination of an insurance policy due to the policyholder's failure to pay premiums when due. When a...
• Lapse ratioA metric used by insurance companies, particularly in life insurance, to measure the rate at which policies...
• Laptop exclusionA provision in an insurance policy that specifically denies coverage for losses or damages related to laptop...
• Large deductible planA workers' compensation or liability insurance program where the policyholder accepts a high deductible, such...
• Large line capacityThe maximum amount of insurance coverage an insurer or the entire insurance market is willing and able to...
• Laser exclusionAn exclusionary endorsement that removes coverage for one specific, named exposure, such as an individual...
• Last clear chance ruleA doctrine in tort law that allows a plaintiff to recover damages despite their own contributory negligence...
• Last in, first out (LIFO)An inventory costing method that treats the most recently acquired goods as the first ones sold or used, so...
• Last injurious exposureA legal rule used in workers' compensation cases to assign liability for occupational diseases that develop...
• Latent defectA hidden flaw or imperfection in a product, material, or structure that is not discoverable by reasonable...
• Lateral hireAn individual recruited from another firm to fill a role at a similar level of seniority and responsibility...
• Laundry listingThe practice of including every conceivable claim or allegation in a lawsuit or insurance claim, regardless...
• Law clerkA person, typically a recent law school graduate or a current law student, who provides research and...
• Law enforcement officers liabilityA specialized form of professional liability insurance that protects law enforcement agencies and their...
• Law of large numbersA statistical principle stating that as the number of exposure units increases, the actual loss experience...
• Lawyers professional liability coverageAn errors and omissions insurance policy that protects attorneys and law firms against claims of negligence...
• LayerA portion of an insured loss or a reinsurance program that is covered by a specific policy or contract. In...
• LayeringThe practice of arranging multiple insurance policies in successive tiers, where each policy provides...
• Lay-upThe temporary withdrawal of a vessel from active service, during which it is moored or stored in a safe...
• Lay-up warrantyA clause in a marine insurance policy that stipulates conditions for a premium reduction when a vessel is...
• LD50/lethal doseThe amount of a substance that, when administered all at once, is expected to cause the death of 50 percent...
• Lead reinsurerThe reinsurer on a treaty or facultative placement that quotes the terms, conditions, and price which the...
• Lead umbrellaThe first layer of umbrella liability insurance coverage above the primary policies. This policy establishes...
• LeadingThe process by which an insurer or reinsurer takes the primary role in setting the terms, conditions, and...
• Lease gap coverageAn optional auto insurance coverage that pays the difference between the actual cash value of a leased...
• Leasehold interestThe financial interest a tenant has in a leased property, representing the value of the lease agreement if...
• Legal action against insurerA lawsuit initiated by a policyholder or claimant against an insurance company. This action arises when there...
• Legal fundingA non-recourse cash advance provided to a plaintiff involved in a legal claim, typically for personal injury...
• Legal liability coverage formA standardized insurance form that provides coverage for a party's legal responsibility for damage to...
• Legal principles claim specialist (LPCS)A professional designation for individuals who have demonstrated expertise in the legal aspects of insurance...
• Legal reserve life insurance companyAn insurer that issues life insurance and annuity contracts and is required by state law to maintain specific...
• Legal riskThe potential for financial loss or damage arising from legal and regulatory actions, non-compliance with...
• Lender liabilityThe legal responsibility of a financial institution for damages incurred by a borrower. This liability arises...
• Lenders liability coverageInsurance that protects financial institutions from claims of wrongful acts committed in the course of their...
• Lenders loss payable endorsementAn attachment to an insurance policy that protects a lender's interest in insured property. This endorsement...
• Less than truckload LTLA freight shipping method for cargo that does not require a full 48- or 53-foot trailer. Less than truckload...
• LesseeAn individual or entity that holds the right to use an asset under a lease agreement. The lessee makes...
• Lessees of Safe Deposit Boxes Coverage Form IA standardized insurance form that provides coverage for property contained within a safe deposit box. This...
• LessorThe owner of an asset who grants another party, the lessee, the right to use that asset for a specified...
• Letter of credit (LOC)A financial instrument issued by a bank or financial institution, guaranteeing payment to a beneficiary on...
• Letter of Determination Review1. FEMA's ruling on the determination made by a lender or third party that a borrower's building is in a...
• Letter of Map Amendment1. An amendment to the currently effective FEMA map which establishes that a property is not located in a...
• Letter of Map ChangeLetter of Map Change (LOMC) is a general term used to refer to the several types of revisions and amendments...
• Letter of Map Revision1. An official amendment to the currently effective FEMA map. It is issued by FEMA and changes flood zones...
• Letter of Map Revision Based on FillA Letter of Map Revision Based on Fill (LOMR-F) is FEMA's modification of the Special Flood Hazard Area...
• LeverageThe extent to which an insurer relies on policyholder surplus and borrowed funds to conduct its operations...
• LiabilityA legal obligation to pay for damages, losses, or harm caused to another person or entity, arising from one's...
• Liability insuranceCoverage that protects a business against financial loss arising from claims of bodily injury, property...
• Liability limitsThe maximum amount an insurance policy will pay for covered losses under a specific liability coverage. These...
• Liability Risk Retention Act of 1986 LRRAA federal law that facilitates the formation of risk retention groups and purchasing groups for liability...
• LibelA published false statement that is damaging to a person's reputation. This form of defamation is typically...
• Liberalization clauseA provision in an insurance policy stating that if the insurer broadens coverage without an additional...
• LicenseOfficial authorization granted by a governmental body to an individual or entity to perform specific...
• License and permit bondA type of surety bond required by a governmental entity as a condition for granting a license or permit to...
• Licensed insurerAn insurance company that has received official authorization from a state's department of insurance to...
• LicenseeAn individual or entity that has been granted official permission by a regulatory authority to conduct...
• LienA legal claim or right against assets that are used as collateral to satisfy a debt or obligation. In...
• Life expectancyThe average number of additional years a person is expected to live, based on their current age, gender, and...
• Life income optionA settlement option for life insurance policy proceeds or annuity benefits that provides regular payments to...
• Life income with period certain optionA settlement option that provides regular payments for the life of the annuitant or beneficiary, with a...
• Life insurance risk factorsCharacteristics and conditions that influence an individual's mortality and, consequently, the cost of life...
• Life insurance trustA legal arrangement where a trust is designated as the owner and beneficiary of a life insurance policy. This...
• Life Office Management Association (LOMA)A trade association for the insurance and financial services industry, providing education, research, and...
• Life Underwriter Training Council (LUTC)An organization that provides practical, sales-oriented education and training for life insurance agents and...
• Life underwriters' professional liability insuranceA type of errors and omissions (E&O) insurance specifically designed to protect life insurance agents and...
• Lifetime policyAn insurance contract that remains in force for the entire duration of the insured's life, provided premiums...
• Lilly Ledbetter Fair Pay Act of 2009A federal statute that amended the Civil Rights Act of 1964 to clarify the statute of limitations for filing...
• LimitThe maximum amount an insurance company will pay for a covered loss or series of losses under a policy...
• Limit of insuranceThe maximum amount an insurer will pay for covered losses under a specific insurance policy or for a...
• Limitation of liability clauseA contractual provision that restricts the amount of damages one party can recover from another party in the...
• Limitation of riskA contractual provision or legal principle that restricts the maximum amount of financial exposure an insurer...
• Limited damage waiver (LDW)An optional agreement offered by rental car companies that relieves the renter of financial responsibility...
• Limited health benefit planA type of health insurance policy that provides coverage for only specific medical services or conditions...
• Limited liability company LLCA business structure that combines elements of a partnership or sole proprietorship with the limited...
• Limited life insurance policyA life insurance policy that provides coverage for a specific, restricted period or under certain conditions...
• Limited lossesLosses truncated at a stated per-claim or per-occurrence maximum, so any amount above the cap is left out of...
• Limited Mexico Coverage endorsementAn addition to a standard auto insurance policy that extends some coverage to an insured vehicle while it is...
• Limited payment life insuranceA type of whole life insurance where premiums are paid for a specified period, such as 10, 20 years, or until...
• Limited severability provisionA clause in a directors and officers liability policy that states that the wrongful acts or knowledge of one...
• Limits reduction provisionAn underinsured motorists provision under which the amount the at-fault driver's liability insurer paid is...
• Limits under multiple policy years (LUMP)A single-limit insurance program that stays in force for several years, rather than the usual series of...
• LIMRA International, Inc.A worldwide research and consulting organization for the insurance and financial services industry. It...
• LineA specific type of insurance coverage sold by an insurer, such as property, casualty, or life insurance...
• Line of businessA classification of insurance products based on the type of risk covered, such as property, casualty, life...
• Line sheetA table that lists, class by class, the largest amount an insurer will accept on a single risk and how much...
• Line underwriterAn individual responsible for evaluating and accepting or rejecting insurance risks within a specific line of...
• Liquid petroleum gas (LPG)A flammable mixture of hydrocarbon gases, primarily propane and butane, used as fuel in heating appliances...
• Liquidated damagesA pre-agreed amount of money specified in a contract that one party will pay to the other in the event of a...
• LiquidityThe ability of an asset to be converted into cash quickly without causing a substantial change in its market...
• Liquidity ratioA financial metric that assesses an entity's ability to cover its short-term liabilities with its short-term...
• Liquidity riskThe potential for an insurer to be unable to meet its financial obligations as they fall due, either because...
• Liquor law liabilityThe legal responsibility of businesses that sell or serve alcoholic beverages for damages or injuries caused...
• LitigationThe process of taking legal action through the courts to resolve a dispute. In insurance, litigation...
• Litigation holdA directive issued by an organization to its employees and agents to preserve all potentially relevant...
• Litigation managementThe strategic oversight and control of legal disputes and claims, particularly those involving an insurance...
• Litigation risk insurance (LRI)A specialized insurance product that protects against the financial risks associated with legal disputes. It...
• Little Miller ActsState statutes that mirror the federal Miller Act, requiring contractors on public works projects to furnish...
• Livestock collisionA type of auto insurance claim resulting from a vehicle striking an animal, such as a deer, elk, or domestic...
• Livestock coverage formA specialized insurance policy or endorsement that protects against financial loss from the death or injury...
• Lloyd's brokerAn insurance broker accredited to place business directly with syndicates at Lloyd's of London. These brokers...
• Lloyd's Central FundA mutual fund maintained by the Corporation of Lloyd's to provide additional security for policyholders in...
• Lloyd's managing agentA company authorized by Lloyd's of London to manage the affairs of one or more syndicates, including...
• Lloyd's members' agentAn entity that advises and represents individual or corporate members (Names) of Lloyd's of London regarding...
• Lloyd's of LondonA unique insurance market, not an insurance company, where multiple financial backers (members) pool capital...
• Lloyd's syndicateA group of underwriting members at Lloyd's of London that together accept insurance risks under the direction...
• Lloyd's underwriterAn individual employed by a Lloyd's managing agent who assesses and accepts risks on behalf of a syndicate...
• Locality StandardA legal principle, primarily in medical malpractice cases, that historically judged a healthcare...
• LogisticsThe detailed planning, implementation, and control of the efficient forward and reverse flow and storage of...
• London Interbank Offered Rate (LIBOR)A benchmark interest rate at which major global banks lend to one another in the international interbank...
• Longevity swapsA financial derivative contract where one party, typically a pension fund or insurer, exchanges fixed...
• Longshore and Harbor Workers' Compensation Act of 1927 (LHWCA)A federal law providing workers' compensation benefits to certain maritime employees who are injured or...
• Long-tail liabilityA type of insurance liability where the occurrence of the loss event and the reporting of the claim, or the...
• Long-term care (LTC)A range of services and support needed by individuals who have lost the ability to care for themselves due to...
• Long-term disability income insuranceAn insurance policy that provides a regular income stream to an insured individual who becomes unable to work...
• Long-term insuranceA category of insurance contracts that provide coverage for events over an extended period, contrasting with...
• Lookback windowsA specified period of time preceding a claim or policy inception during which certain conditions or events...
• LossThe amount of financial detriment resulting from an insured event, which the insurer is obligated to cover...
• Loss adjustment expense (LAE)The costs incurred by an insurer in the process of investigating, defending, and settling claims. These...
• Loss assessmentA charge levied by a homeowners association (HOA) against its members to cover a shared loss or expense that...
• Loss carryforwardA tax provision that allows a business or individual to apply current year losses against future taxable...
• Loss constantA flat charge added to the premium for smaller workers' compensation policies to account for the...
• Loss controlThe proactive measures and strategies implemented by an insured or insurer to prevent or reduce the frequency...
• Loss control reportA document prepared by an insurer's loss control specialist detailing the findings of a risk assessment...
• Loss conversion factor (LCF)A multiplier applied to an insurer's expected losses to account for the administrative expenses and overhead...
• Loss costsThe portion of an insurance premium that is allocated to cover expected claims payments, excluding expenses...
• Loss damage waiver (LDW)An optional agreement offered by rental car companies that relieves the renter of financial responsibility...
• Loss developmentThe change in the estimated ultimate value of incurred losses over time, as more information becomes...
• Loss development factor (LDF)A numerical factor used by actuaries to project the ultimate value of incurred losses from their current...
• Loss eventAn occurrence that results in financial damage or injury, triggering a potential claim under an insurance...
• Loss forecastingThe practice of using historical loss data and statistical methods to project the frequency, severity, and...
• Loss in progressA loss that is already in progress as of 12:01 a.m. on the first day of the policy term; or, as to any...
• Loss limitThe ceiling on each individual accident or occurrence that counts toward the loss total used to compute the...
• Loss limitationA provision in some workers' compensation insurance policies or rating plans that caps the amount of a single...
• Loss loadingAn additional amount added to the pure premium (the portion covering expected losses) to cover the insurer's...
• Loss mitigation underwriting (LMU)An insurance arrangement that covers the financial outcome of litigation that is already pending or imminent...
• Loss of consortium suitsLegal actions brought by the spouse or family members of an injured worker, seeking damages for the loss of...
• Loss of income coverageA type of insurance protection that compensates a policyholder for earnings lost due to a covered peril, such...
• Loss payable clauseA provision in an insurance policy that directs the insurer to pay any covered loss to a party other than the...
• Loss payeeAn individual or entity designated in an insurance policy to receive payment for a covered loss. This party...
• Loss payout curveA graphical representation illustrating the cumulative percentage of total incurred losses that are paid out...
• Loss pickAn actuary's estimate of the total incurred losses for a specific period, often a policy year, for a...
• Loss portfolio agreementsA type of reinsurance agreement where an insurer transfers a portfolio of existing, often long-tail...
• Loss portfolio transfer (LPT)A reinsurance transaction in which an insurer cedes a portfolio of past-dated claims and the associated loss...
• Loss ratingA method of calculating insurance premiums based directly on an insured's own historical loss experience...
• Loss ratioThe ratio of incurred losses and loss adjustment expenses to earned premiums over a period, expressed as a...
• Loss ratio coverageA reinsurance cover, also called stop loss or excess of loss ratio cover, that pays the ceding insurer when...
• Loss reductionMeasures taken to decrease the severity of losses once an event has occurred, aiming to minimize the...
• Loss reportA formal document submitted by an insured to their insurer detailing the circumstances of a loss event and...
• Loss reserveAn estimate of the liability an insurer has for claims that have been reported but not yet settled (RBNS) and...
• Loss reserve stabilityThe consistency and predictability of an insurer's loss reserve estimates over time, reflecting the accuracy...
• Loss runA report generated by an insurer that details an insured's historical claims experience over a specified...
• Loss sensitive plansInsurance programs where the final premium paid by the insured is directly influenced by their actual loss...
• Loss trendingThe actuarial process of adjusting historical loss data to reflect anticipated future conditions, such as...
• Loss triangleA triangular array of data used by actuaries to project ultimate claim costs for a block of insurance...
• Losses in excess of policy limitsThe portion of a claim amount that exceeds the maximum financial obligation an insurer is contractually bound...
• Losses incurredThe total cost of claims that have occurred over a specific period, regardless of whether they have been paid...
• Lost policy releaseA signed statement from a policyholder confirming that an original insurance policy document has been lost or...
• Lost time accident (LTA)A workplace injury or illness that results in an employee being unable to perform their regular duties for at...
• Low speed vehicle (LSV)A four-wheeled motor vehicle, other than a truck, with a gross vehicle weight rating of less than 3,000...
• Lowest achievable emission rateThe most stringent emission limitation for a pollutant that is either written into a state implementation...
• Lowest adjacent gradeThe lowest point of the ground level immediately next to a building.
• Lowest floor1. The lowest floor of the lowest enclosed area (including a basement). An unfinished or flood-resistant...
• Lowest floor elevationThe measured distance of a building's lowest floor above the National Geodetic Vertical Datum (NGVD) or other...
• Lowest horizontal structural memberIn V Zones, new construction must have the elevation of the lowest horizontal structural member at or above...
• Low-rise buildingLow-rise condominium buildings having fewer than 5 units regardless of the number of floors or 5 or more...

166 of 3,708 terms in Insurance and risk management terminology (MLC-0106). Request the full dataset.