Glossary of Insurance Terms

E

e-business - The transaction of business by way of electronic media, such as telephones, fax machines, computers, and video-teleconferencing equipment. This generally is broader than e-commerce although some may view e-business and e-commerce as interchangeable terms.

e-commerce - The buying and selling of goods by way of electronic media, such as telephones, fax machines, computers, and video-teleconferencing equipment.

Earned premium - Portion of a premium for which the insurer has already provided protection.

Earnings insurance - A simplified form of insurance covering business income loss, limited to a set percentage of the policy’s total amount for recovery of proved loss for each 30-day period.

Earth movement - Subject to an exclusion in property policies, this peril includes earthquake, landslide, mudflow, etc.

Effective date - The date shown in the declarations of a policy upon which coverage is to take effect.

Employee dishonesty coverage - Insurance protecting employers from loss due to theft by their employees.

Employers liability insurance - A feature of standard workers compensation policies, this coverage applies to liability that may be imposed on an employer outside the provisions of a workers compensation law.

Employers nonownership liability - Employers who buy commercial auto coverage on a basis other than "any auto" have this exposure whenever an employee uses his or her own auto on the employer’s behalf.

Employment practices liability insurance - Coverage against allegations of illegal or discriminatory hiring and firing practices, sexual harassment of employees, and so on.

Endorsement - An amendment to a policy form.

Enterprise-wide risk management - An effort to categorize, measure, and treat all types of risk that may adversely affect a business. It includes both traditional hazard risks and other business risks, such as risks posed by competitors, by economic developments, and natural conditions the business cannot control, and by general operations.

Environmental Impairment Liability Insurance, see Pollution liability insurance.

Equipment floater, see Floater.

ERISA - An acronym standing for the 1974 Employee Retirement Income Security Act which regulates certain employee benefit plans.

Errors and omissions coverage - A type of professional liability insurance, protecting the insured against claims alleging bodily injury or property damage caused by the professional or technical incompetence of the insured.

Estimated premium, see Deposit premium.

Estoppel - The legal doctrine that a party may be precluded from denying that certain rights exist if, by behavior or implication that such rights did, in fact, exist, another party has acted upon this information to his or her detriment.

Ex gratia payment - A payment by an insurer to an insured for which there is no contractual liability. Such payments are sometimes made as a goodwill gesture if there is the possibility of a misunderstanding or a mistake.

Examination under oath - Found in the conditions section of many insurance policies, the insurer’s right to examine an insured under oath following a loss.

Excess insurance - Coverage that applies on top of underlying insurance that is primary, i.e., that pays until its coverage limit is exhausted at which point the excess coverage takes over.

Excess or surplus lines market - The range of insurance available through non-admitted insurers, i.e., insurance companies that are not licensed in a particular state or territory. Specific provisions of state or territorial law control placements.

Exclusive agency system, see Captive agent.

Expense ratio - The dollar amount that represents acquisition and service costs, expressed as a percentage of written premium.

Experience - A record of losses.

Experience modification - The raising or lowering of premiums under terms of an experience-rating plan.

Experience rating - A method of rating that uses past experience to establish current rates.

Explosion - An extended coverage peril and currently a covered peril in nearly every policy of property insurance. The peril remains distinct from steam boiler explosion, which is covered by boiler & machinery insurance.

Extended coverage - An early and indivisible "package" of property insurance perils said to have been devised to make possible the spread of windstorm insurance beyond the highly exposed coastal and plains states. For those whose exposure to windstorm was less, "extended coverage" also encompassed smoke damage, hail, riot and civil commotion, aircraft and vehicle damage, and explosion insurance. Included here for historic purposes only since the term, "extended coverage," is no longer in general use.

Extended non-owner liability - A personal auto policy endorsement that provides broader liability coverage for specifically named individuals. When attached, it covers: (1) non-owned autos furnished for the regular use of an insured; (2) use of vehicles to carry persons or property for a fee; and (3) broader coverage for business use of vehicles.

Extended period of indemnity - A time for recovery of proved business income loss after physical property is restored and business reopened. The 30-day extension included in many business income forms may be extended by endorsement.

Extended recovery period, see Extended period of indemnity.

Extended reporting period, see Claims-made coverage.

Extra expense insurance - Depending on an insured’s requirements, this coverage may be purchased as a supplement to business income insurance, applying to expediting expenses that aid in quickly restoring the insured’s operations after a covered loss; or it can be the primary coverage sustaining the extra cost of continuing doing business for those insureds who would find it extremely damaging to fail to meet customer commitments, e.g., newspapers, dairies, etc.