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
Maximum limit of liability of an insurance company for a particular claim or kind of loss that is applicable in general to all such claims or losses. This maximum limit of liability is ...
Share of a variable dollar annuity paid to an annuitant as an income payment. ...
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Type of employee savings plan under which an employee may contribute up to a specified percentage of the salary on an after-tax basis and the employer matches the employee's contribution up ...
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pool that contains various reinsurance companies with each sharing reinsurance contracts on a pro rata basis as they are submitted to the pool. market that operates much like the New York ...
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Act first passed in 1962 that permits the self-employed individual to establish his or her own retirement plan. This individual can make nondeductible voluntary contributions and ...
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