Sistership Exclusion
Definition of "Sistership exclusion"
Part of the business risk exclusion in general liability insurance that denies coverage for subsequent claims if a defective product is not recalled by an insured. For example, if a consumer filed a damage suit against XYZ Co. claiming that he or she became sick while eating a can of soup from a particular lot that was contaminated, the insurer would not pay later claims filed by other consumers if the XYZ Co. did not recall that lot of the soup. The general liability insurance policy for businesses also excludes costs associated with the withdrawal of a product from the market whether it is ordered by a government agency or by company management. A business that wants coverage for product recall would need to buy product recall insurance to include the extra wages and other costs of identifying the faulty product, notifying consumers, correcting or repairing the product, and redistributing it.
Popular Insurance Terms
Transfer of highly individualized loss exposures that is not based on the usual pooling principles of insurance such as risk identification and classification selection. Rather than setting ...
Maximum age of an applicant or insured beyond which an insurance company will not initially underwrite a risk or continue to insure it. For example, under some forms of renewable term life ...
Deferred annuity under which one premium payment is made and the annuity is paid up (no further premium payments are required). ...
Methods by which a home office underwriter chooses applicants that an insurer will accept. The underwriter's job is to spread the costs equitably among members of the group to be insured. ...
Section providing protection in four areas: Coverage A (Home) the structure of the home (basic contract amount). Other property coverages in Section I are expressed as a percentage of ...
Fund in a segregated account to provide for the return of unearned premiums on policies that are canceled. ...
Federal statute defining the federal tax code, covering such topics as credits against tax; business-related credits; computing credit for investment in certain depreciable property; ...
Financial instruments whose principal and income are not established in advance according to contractual terms set forth in the financial instruments document. Both the principal and income ...
Clause in an insurance policy that provides for the payment of a monetary sum to the individual (s) who incurred the loss. ...
Have a question or comment?
We're here to help.