Long-tail Liability
Definition of "Long-tail liability"
One where an injury or other harm takes time to become known and a claim may be separated from the circumstances that caused it by as many as 25 years or more. Some examples: exposure to asbestos, which sometimes results in a lung disease called asbestos; exposure to coal dust, which might cause black lung disease; or use of certain drugs that may cause cancer or birth defects. These long-tail liabilities became very expensive for many corporations in the 1970s and 1980s, also causing problems for insurers because it was unclear when the situation that gave rise to the claim happened and who should pay the claim. One theory, the MANIFESTATION/INJURY THEORY, states that the insurer is responsible whenever the disease is diagnosed. The other view, the OCCURRENCE/INJURY THEORY, states that the insurer must pay only when the person is injured.
Popular Insurance Terms
Value in life insurance policies that entitle the insured to these choices: to relinquish the policy for its CASH SURRENDER VALUE. (Note that in the beginning years the cash value may be ...
Mathematical relationship resulting from experimentation. For example, the probability distribution for the possible number of heads from four tosses of a fair coin having both a head and a ...
Smallest face amount of life insurance that an insurance company will write on any one person. ...
Liability exposure, in insurance, associated with three classifications of individuals that may come upon an insured property: TRESPASSER: individual enters without permission. Generally ...
Coverage on an all risks basis whether the airplane is on the ground or in the air; also called hull aircraft insurance. Exclusions, although none are standard, include illegal use of an ...
Actions not allowed between a trust and a disqualified person under the employee retirement income security act of 1974 (erisa). The disallowed actions are designed to prevent a conflict of ...
Person covered under an employee benefit insurance plan. ...
Combination of several insurance companies to provide the capacity to underwrite a particular type or size of exposure. For example, liability coverage for a drug company's vaccine has been ...
Condition in which buildings are built with sealed windows resulting in poor ventilation causing occupants to experience dizziness, nausea, respiratory problems, headaches, fatigue, sinus ...
Have a question or comment?
We're here to help.