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Fundamentals of Risk and Insurance, 10th Edition
by
Vaughan, Emmett J., Univ. of Iowa; Vaughan, Therese M., Drake Univ.
Publisher: John Wiley & Sons
Publishing Date: 2007/12/21
eText ISBN-10
0-470-28331-9
eText ISBN-13
978-0-470-28331-8
Print ISBN-10
0-470-08753-6
Print ISBN-13
978-0-470-08753-4
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Fundamentals of Risk and Insurance, 10th Edition
by
Vaughan, Emmett J., Univ. of Iowa; Vaughan, Therese M., Drake Univ.
eTextbook $95.50
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Copyright, iv
About the Authors, vii
Preface, ix
Section ONE. RISK, INSURA...
Section TWO. LIFE AND HEA...
Section THREE. PROPERTY A...
Glossary, G-1
Author Index, I-1
Subject Index, I-3
Table of Contents
Copyright, iv
About the Authors, vii
Preface, ix
Section ONE. RISK, INSURANCE, AND RISK MANAGEMENT, 1
Chapter 1. The Problem of Risk, 1
The Concept of Risk, 1
Current Definitions of Risk, 2
Our Definition of Risk, 2
Uncertainty and Its Relationship to Risk, 3
The Degree of Risk, 4
Risk Distinguished from Peril and Hazard, 5
Classifications of Risk, 5
The Burden of Risk, 8
The Growing Number and Variety of Pure Risk, 8
Increasing Severity of Losses, 9
Managing Risk, 10
Chapter 2. Introduction to Risk Management, 12
The History of Modern Risk Management, 13
Enterprise Risk Management, 15
Risk Management Defined, 16
Risk Management Tools, 17
Risk Control, 18
Risk Financing, 19
Risk Management as a Business Function, 20
Risk Management’s Contribution to the Organization, 21
The Risk Manager’s Job, 22
Misconceptions about Risk Management, 23
Universal Applicability, 23
Anti-Insurance Bias?, 23
Risk Management and the Individual, 24
The Risk Management Process, 24
Determination of Objectives, 24
Identifying Risk Exposures, 26
Evaluating Risks, 28
Consideration of Alternatives and Selection of the Risk Treatment Device, 30
Implementation of the Decision, 30
Evaluation and Review, 30
Chapter 3. The Insurance Device, 34
The Nature and Functions of Insurance, 34
Risk Sharing and Risk Transfer, 34
Insurance Defined from the Viewpoint of the Individual, 35
Risk Reduction Through Pooling, 35
Insurance Defined from the Viewpoint of Society, 41
Insurance: Transfer or Pooling?, 41
Insurance and Gambling, 42
The Economic Contribution of Insurance, 42
Elements of an Insurable Risk, 42
Randomness, 43
Economic Feasibility, 44
Self-Insurance, 44
The Fields of Insurance, 45
Private (Voluntary) Insurance, 45
Social Insurance, 48
Public Guarantee Insurance Programs, 51
Similarities in the Various Fields of Insurance, 53
Chapter 4. Risk Management Applications, 55
Risk Management Decisions, 55
Utility Theory and Risk Management Decisions, 56
Decision Theory and Risk Management Decisions, 56
The Rules of Risk Management, 58
Risk Characteristics as Determinants of the Tool, 60
The Special Case of Risk Reduction, 60
Buying Insurance, 61
Common Errors in Buying Insurance, 61
Need for a Plan, 61
Other Considerations in the Choice Between Insurance and Retention, 63
Selecting the Agent and the Company, 64
Alternatives to Commercial Insurance, 67
Self-Insurance, 67
Captive Insurance Companies, 69
Risk Retention Act of 1986, 70
Chapter 5. The Private Insurance Industry, 73
A Brief History of Private Insurance, 74
Insurance in Antiquity, 74
Origins of the Modern Insurance Business, 74
Insurance in the United States, 75
Classification of Private Insurers, 76
Classification by Type of Product, 76
Classification by Place of Incorporation and Licensing, 77
Insurers Classification by Legal Form of Ownership, 77
Marketing Systems, 83
The Agent, 83
Life Insurance Distribution System, 84
Property and Liability Distribution Systems, 84
Insurance Marketing and the World Wide Web, 85
Corporate Combinations, 85
Nuclear Energy Pools, 86
Other Voluntary Syndicates, 86
Banks and Insurance, 86
Cooperation in the Insurance Industry, 87
Rating Organizations, 88
Distressed and Residual-Risk Pools, 88
Educational Organizations, 90
Insurance Trade Associations, 90
Competition in the Insurance Industry, 90
Price Competition, 91
Quality Competition, 92
Is the Insurance Industry Really Competitive?, 92
Chapter 6. Regulation of the Insurance Industry, 98
The Why of Government Regulation of Insurance, 98
The Why of Regulation Generally, 98
Approaches to Government Control of Business, 99
Rationale for Regulation of the Insurance Industry, 101
Goals of Insurance Regulation, 102
A Brief History of Insurance Regulation, 102
Regulation Today, 105
The Current Regulatory Structure, 105
National Association of Insurance Commissioners, 105
Areas Regulated, 105
Solvency Regulation, 106
Market Regulation, 109
Regulation of Rates, 111
Risk-Retention Groups, 114
State versus Federal Regulation, 115
Pressure for Repeal of the McCarran-Ferguson Act, 115
Arguments Favoring Federal Regulation, 115
Arguments Favoring State Regulation, 116
Consequences of the Repeal of the McCarran-Ferguson Act, 117
Repeal of the McCarran-Ferguson Act as a States-Rights Issue, 117
The NAIC’s Efforts to Modernize State Insurance Regulation, 118
State versus Federal Regulation and Public Choice, 119
Appendix: The Availability/Affordability Debate, 120
The Essence of the Debate, 120
Existing Subsidies in the Insurance Market, 120
Income Redistribution Effects of Subsidies in Insurance, 124
Causes of Availability Problems, 125
Causes of Affordability Problems, 125
Availability and Affordability and Public Choice, 127
Chapter 7. Functions of Insurers, 130
Functions of Insurers, 130
Ratemaking, 130
Some Basic Concepts, 131
Types of Rates, 132
Production, 135
Underwriting, 135
The Agent’s Role in Underwriting, 136
Underwriting Policy, 136
Process of Underwriting, 136
Postselection Underwriting, 138
Credit Scoring, 138
Loss Adjustment, 139
Adjusters, 139
Courses of Action in Claim Settlement, 140
Adjustment Process, 140
Difficulties in Loss Settlement, 141
The Investment Function, 141
Miscellaneous Functions, 142
Legal, 142
Accounting, 142
Engineering, 142
Appendix: Retrospective Rating Plans, 143
The Retrospective Formula, 143
Chapter 8. Financial Aspects of Insurer Operations, 146
Statutory Accounting Requirements, 146
Differences Between Statutory Accounting and GAAP, 147
Terminology, 148
Property and Liability Insurers, 148
Concept of Earned Premiums, 149
Incurred Losses, 149
Expenses Incurred, 150
Summary of Operations, 150
Life Insurance Companies, 152
Life Insurer Assets, 152
Life Insurer Liabilities, 152
Life Insurers’ Policyholders’ Surplus, 153
Life Insurer Summary of Operations, 153
Surplus Drain in Life Insurance, 154
Reinsurance, 155
Nature of Reinsurance, 155
Type of Reinsurance Treaties, 155
Reinsurance in Property and Liability Insurance, 155
Reinsurance in Life Insurance, 156
Functions of Reinsurance, 156
Risk-Financing Alternatives to Reinsurance, 157
Taxation of Insurance Companies, 161
State Premium Tax, 161
Federal Income Taxes, 161
Chapter 9. The Legal Framework, 165
Insurance and the Law of Contracts, 165
General Requirements of an Enforceable Contract, 166
Void and Voidable, 168
Special Legal Characteristics of Insurance Contracts, 169
Insurance Is a Contract of Indemnity, 169
Insurance Is a Personal Contract, 174
Insurance Is a Unilateral Contract, 175
Insurance Is a Conditional Contract, 175
Insurance Is a Contract of Adhesion, 175
Insurance Is an Aleatory Contract, 176
Insurance Is a Contract of Utmost Good Faith, 176
The Insurance Contract as a Contract, 180
Policy Construction, 181
Section TWO. LIFE AND HEALTH INSURANCE, 184
Chapter 10. Managing Personal Risks, 184
Objectives in Managing Personal Risks, 185
Other Steps in Managing Personal Risks, 186
Managing Risks Associated with Premature Death, 186
Identifying Risks Associated with Premature Death, 186
Measuring Risks Associated with Premature Death, 186
The Estate Liquidity Need, 195
Estate Planning, 197
Trusts, 200
The Risks Associated with Superannuation, 201
The Risk of Outliving the Retirement Accumulation, 202
Estimating the Accumulation Need, 202
The Risks Associated with Disability, 203
Needs Analysis for the Disability Risk, 203
Resources Available to Meet the Disability Risk, 204
Addressing Unmet Disability Income Needs, 204
Evaluating the Medical Expense Exposure, 205
Managing the Risk of Unemployment, 205
State Unemployment Insurance Programs, 205
Retention and Risk Reduction, 206
Chapter 11. Social Insurance Programs, 209
Old-Age, Survivors’, Disability, and Health Insurance, 210
Eligibility and Qualification Requirements, 210
Financing, 211
Amount of Benefits, 212
Classes of Benefits, 212
Summary of Qualification Requirements, 214
Loss of Benefits—the OASDHI Program, 215
Soundness of the Program, 218
Workers Compensation, 223
Historical Background, 223
Rationale of Workers Compensation Laws, 224
Principles of Workers Compensation, 224
An Overview of State Workers Compensation Laws, 226
Chapter 12. Introduction to Life Insurance, 231
Some Unique Characteristics of Life Insurance, 231
Life Insurance Is Not a Contract of Indemnity, 232
Types of Life Insurance Contracts, 232
Reasons for Difference in Term and Cash Value Insurance, 233
The Level Premium Concept, 234
Tax Treatment of Life Insurance, 235
Code Definition of Life Insurance, 236
Current Life Insurance Products, 237
Term Insurance, 237
Whole-Life Insurance, 238
Universal Life Insurance, 239
Variable Life Insurance, 240
Adjustable Life Insurance, 241
Endowment Life Insurance, 241
Participating and Nonparticipating Life Insurance, 241
General Classifications of Life Insurance, 242
Individual Life Insurance, 242
Group Life Insurance, 242
Credit Life Insurance, 244
Total Life Insurance in Force in the United States, 244
Other Types of Life Insurance, 245
Chapter 13. The Actuarial Basis of Life Insurance, 248
Life Insurance Premium Computation, 248
Mortality, 249
Interest, 249
The Net Single Premium, 252
The Net Level Premium, 254
Reserves on Life Insurance Policies, 255
Benefit-Certain and Benefit-Uncertain Contracts, 257
Chapter 14. The Life Insurance Contract—General Provisions, 261
Inception of the Life Insurance Contract, 262
General Provisions of Life Insurance Contracts, 262
Entire Contract Clause, 262
Ownership Clause, 263
Beneficiary Clause, 263
Incontestable Clause, 264
Misstatement of Age Clause, 265
Grace Period, 265
Reinstatement, 265
Suicide Clause, 266
Aviation Exclusions, 266
War Clause, 267
Settlement Options, 267
Interest Option, 267
Installments for a Fixed Period, 267
Installments of a Fixed Amount, 268
Life Income Options, 268
Taxation of Policy Proceeds under Various Settlement Options, 269
Chapter 15. The Life Insurance Contract—Other Provisions, 273
Nonforfeiture Values, 273
Cash Option, 274
Paid-Up Reduced Amount, 275
Extended Term Insurance, 275
Policy Loan Provisions, 276
Automatic Premium Loan, 276
Dividend Provisions, 277
Important Optional Provisions, 279
Disability Waiver of Premium Provision, 279
Accidental Death Benefit, 280
Guaranteed Insurability Option, 281
Common Disaster Clause, 282
Spendthrift Clause, 283
Rights of Creditors to Life Insurance Proceeds, 283
Cost-of-Living Riders, 283
Universal Life Policy Provisions, 284
Premium and Cost of Insurance Provision, 284
Changes in the Amount of Insurance, 284
Death Benefit Provision, 284
Universal Life Insurance with Secondary Guarantees, 286
Index Universal Life Insurance, 286
Chapter 16. Special Life Insurance Forms, 289
Specialized Life Contracts, 289
Mortgage Redemption Policy, 290
Joint Mortgage Protection Policy, 290
Survivorship Whole Life, 290
Family Income Policy, 291
Family Income Rider, 291
Family Protection Policy, 292
Return-of-Premium and Return-of-Cash-Value Policy, 292
Modified Whole Life, 293
Graded-Premium Whole Life, 293
Single-Premium Life, 294
Juvenile Insurance, 294
Indeterminate Premium Policies, 295
Low-Load and No-Load Life Insurance, 296
Advantages and Disadvantages of Special Forms, 297
Chapter 17. Buying Life Insurance, 299
Decisions in Buying Life Insurance, 299
Buy Term and Invest the Difference?, 300
Life Insurance as an Investment, 302
Choosing the Company, 303
Comparing Differences in Cost, 305
The NAIC Life Insurance Illustrations Model Regulation, 308
NAIC Model Replacement Regulation, 309
Investment-Owned Life Insurance, 310
Industry Reform Initiatives, 311
Shopping for Universal and Variable Life, 311
Some Additional Tax Considerations, 313
Section 1035 Exchanges (“Rollovers”), 313
Life Insurance and Divorce Agreements, 314
Chapter 18. Annuities and Pension Benefits, 318
Annuities, 318
Classification of Annuities, 320
Income Tax Treatment of Annuities, 321
Annuities and the Federal Estate Tax, 322
Specialized Annuities, 323
Annuities as Investments for Retirement, 326
Regulation of Annuity Sales, 327
Qualified Retirement Plans, 328
A General Overview of Qualified Plans, 328
Basic Types of Qualified Plans, 329
Significance of the Nature of the Employer’s Promise, 330
Other Types of Qualified Plans, 331
Other Requirements for Qualified Retirement Plans, 334
Other Benefits, 336
Required Joint-and-Survivor Option, 337
Period-Certain Payments, 337
Distribution Requirements, 337
Taxation of Distributions, 338
Individual Retirement Accounts, 339
Traditional IRAs, 340
The Roth IRA, 342
A Concluding Note, 343
Chapter 19. Managing the Retirement Risk, 345
An Overview of the Retirement Risk, 345
Causes of the Retirement Risk, 346
Two Risks Associated with Retirement, 346
Retirement Risk Alternatives, 346
An Overview of the Retirement Planning Process, 346
Countering the Urgency Deficit, 349
Constructing a Retirement Plan, 349
Estimating Retirement Needs, 350
Planning the Accumulation, 353
Managing the Distribution, 354
Chapter 20. Health Insurance: Disability Income Insurance, 360
General Nature of Disability Income Insurance, 361
Types of Insurers, 361
Methods of Marketing, 361
Need for Disability Income Insurance, 361
Short-Term versus Long-Term Disability Coverage, 362
Disability Income Underwriting and Pricing, 363
Disability Income Contracts, 364
Perils Covered, 364
Elimination Periods, 364
Limitations on Amount of Coverage, 365
Definitions of Disability Income Policies, 365
Exclusions in Disability Income Contracts, 367
Payments for Other Than Total Disability, 367
Optional Benefit Provisions, 369
Individual Health Insurance Policy Provisions, 370
Individual Health Insurance Continuance Provisions, 370
Uniform Provisions, 371
Optional Uniform Provisions, 372
Programming and Buying Disability Income Insurance, 373
Determining Disability Income Coverage Needs, 373
Evaluating Existing Sources of Protection, 374
Taxation of Disability Income, 375
Cost of Disability Income Insurance, 375
Chapter 21. Health Insurance: Coverage for Medical Expenses, 378
Background on the Current Health Insurance Market, 379
Historical Development of Health Insurance in the United States, 379
The Health Insurance Market, 382
The Private Sector, 382
The Public Sector, 383
Deficiencies in the System and Prior Reform Efforts, 385
Previous Attacks on the Access Problem, 388
Efforts to Reduce Costs, 390
The Insurance Product, 391
Traditional Forms of Medical Expense Coverage, 391
HMO Contracts, 393
Exclusions under Health Insurance Policies, 393
Coordination of Benefit, 394
Other Medical Expense Coverages, 394
Limited Health Insurance Policies, 394
Dental Expense Insurance, 394
Limited Policies—Prescription Drugs, 395
Buying Health Insurance, 395
First-Dollar Coverages, 396
Taxes and Health Care Costs, 396
The Future of Health Insurance, 396
The Failure of Past Efforts, 396
The Attack on Managed Care, 396
Consumer-Driven Health Care, 397
Proposals for National Health Insurance, 398
Recent Developments, 399
The Future, 400
Chapter 22. Health Insurance for the Elderly, 403
Medicare, 404
Original Medicare, 404
Traditional Program Medicare Supplement Policies, 409
Part C—Medicare Advantage, 411
Part D—Prescription Drug Coverage, 413
The Future of Medicare, 415
Long-Term Care Insurance, 416
Nature of the Long-Term Care Exposure, 416
Inadequacy of Medicare for Long-Term Care Needs, 416
Development of LTC Insurance, 417
Coverage of LTC Policies, 418
Cost of LTC Insurance, 420
The Life Insurance Accelerated Benefits Alternative to LTC, 421
Long-Term Care and Annuities, 421
Viatication, 421
Medicaid Planning, 422
Statutory Restrictions, 422
Spousal Impoverishment Provisions, 422
Estate Recovery, 423
Long-Term Care Partnership Programs, 423
Chapter 23. Employee Benefits and Other Business Uses of Life and Health Insurance, 426
Employee Benefits Generally, 427
Group Life and Health Insurance as Employee Benefits, 428
Group Term Life Insurance, 428
Group Ordinary Life Insurance, 428
Group Paid-Up Life Insurance, 429
Group Universal Life, 429
Survivor Income Benefit Insurance, 429
Retired Lives Reserve, 429
Funding Issues, 429
Funding through a 501(c)(9) Trust, 430
Pensions, 431
Legislation Affecting Pension Plans, 431
Qualification Requirements, 433
Funding Pensions, 434
Trusts and Insurance Companies, 436
ERISA Pension Plan Termination Insurance, 438
Accounting for Defined Benefit Plans, 439
Decline in Defined Benefit Plans, 440
Cafeteria Employee Benefit Plans, 440
Some Specialized Uses of Life Insurance in Business, 441
Business Continuation Insurance, 441
Key-Person Insurance, 442
Split-Dollar Plan, 442
Deferred Compensation, 443
Corporate-Owned Life Insurance, 443
Summary, 444
Section THREE. PROPERTY AND LIABILITY INSURANCE, 446
Chapter 24. The Homeowners Policy—General Provisions, 446
The Homeowners Policy Program, 446
Historical Development, 446
General Nature of the Homeowners Program, 447
Homeowners Section I Coverage, 447
Section I Coverages: An Overview, 447
Perils Insured, 448
Dwelling and Other Structures Coverage, 450
Personal Property Coverage, 451
Loss of Use Coverage, 455
Additional Coverages, 455
Homeowners Deductibles, 458
Other Provisions, 458
Section I Conditions, 458
General Conditions Applicable to Sections I and II, 460
Chapter 25. The Homeowners Policy Forms, 464
Differences Among Homeowners Forms, 464
Homeowners 2 Broad Form, 464
Homeowners 3 Special Form, 465
Homeowners 4 Contents Broad Form, 471
Homeowners 5 Comprehensive Form, 471
Homeowners 6 Condominium Unit–Owners Form, 472
Homeowners 8 Modified Coverage Form, 474
Homeowners Section I Optional Coverages, 474
Optional Perils, 474
Other Endorsements, 475
Chapter 26. Other Personal Forms of Property Insurance, 479
Monoline Fire Dwelling Program, 480
Current Dwelling Program, 480
Eligibility, 480
Coverages under the Dwelling Program, 481
Endorsements to the Dwelling Program Forms, 481
Mobilehome Program, 482
Eligibility, 482
Coverage of the Mobilehome, 483
Flood Insurance, 483
General Nature of the Program, 483
The Flood Insurance Policy, 485
Inland Marine Coverage for the Individual, 487
Personal Inland Marine Floaters, 488
Scheduled Personal Property Endorsement, 488
Insurance on Watercraft, 490
Buying Property Insurance for the Individual, 492
Pricing and Cost Considerations, 492
Choosing the Form, 492
Tailoring the Coverage under the Homeowners Policy, 493
Flood Insurance, 493
Title Insurance, 494
Torrens System, 494
Chapter 27. Negligence and Legal Liability, 497
Criminal and Tortious Behavior, 498
Negligence and Legal Liability, 498
There Must Be Negligence, 498
There Must Be Actual Damage or Loss, 501
Negligence Must Be the Proximate Cause of the Damage, 502
Defenses to Negligence, 505
Possible Changes in the Tort System, 508
Summary, 509
Chapter 28. General Liability Insurance for the Individual, 512
Liability Insurance in General, 512
Types of Liability Insurance, 513
Comprehensive Personal Liability Coverage, 513
General Nature of the Coverage, 514
Personal Liability Coverage, 514
Medical Payments to Others, 521
Additional Coverages, 522
Section II Conditions, 524
Cost of Personal Liability Insurance, 525
Optional Personal Liability Endorsements, 525
Professional Liability Insurance, 526
Malpractice Insurance, 526
Errors and Omissions Insurance, 527
Umbrella Liability Policy, 527
Exclusions under the Umbrella Liability Policy, 528
Cost of the Umbrella, 528
Chapter 29. The Automobile and its Legal Environment, 531
A Brief Overview of Automobile Coverages, 532
Automobile Liability Insurance, 532
Medical Payments Coverage, 532
Physical Damage Coverage, 532
Uninsured Motorists Coverage, 532
Legal Liability and the Automobile, 532
Vicarious Liability and the Automobile, 533
Guest Hazard Statutes, 533
Automobile Liability Insurance and the Law, 534
Insurance for High-Risk Drivers, 536
The Automobile Insurance Problem and Changes in the Tort System, 538
Criticisms of the Traditional System, 538
The No-Fault Concept, 539
Cost of Automobile Insurance, 543
The Basic Automobile Insurance Rating System, 543
Evolution of Automobile Rating Systems, 545
The Shifting View of Auto Insurance, 547
Chapter 30. The Personal Auto Policy, 550
General Nature of the Personal Auto Policy, 550
Eligibility, 551
Policy Format, 552
Liability Coverage, 552
Liability Insuring Agreement, 552
Liability Exclusions, 554
Other Liability Coverage Provisions, 556
Medical Payments Coverage, 557
Medical Payments Insurance Agreement, 557
Medical Payments Exclusions, 558
Limitations Applicable to Medical Payment Recoveries, 558
Uninsured Motorist Coverage, 558
Uninsured Motorist Insuring Agreement, 558
Underinsured Motorist Coverage, 560
Physical Damage Coverage, 560
Physical Damage Insuring Agreement, 560
Physical Damage Exclusions, 562
Other Physical Damage Provisions, 563
Policy Conditions, 564
Part E—Duties after an Accident or Loss, 564
Part F—General Provisions, 565
Endorsements to the PAP, 566
Extended Non-Owned Coverage, 566
Named Non-Owner Policy, 567
Miscellaneous Type Vehicle Endorsement, 567
Buying Automobile Insurance, 569
Liability Coverage, 570
Medical Payments Coverage, 570
Physical Damage Coverage, 571
Uninsured Motorist Coverage, 571
Cost Differences among Companies, 571
Summary, 572
Chapter 31. Commercial Property Insurance, 574
Commercial Property Coverage, 575
Commercial Property Direct Loss Coverages, 576
Commercial Property Coverage Policies, 576
Building and Personal Property Coverage Form, 576
Blanket Insurance, 583
Reporting Form Coverage, 583
Builder’s Risk Coverage Form, 584
Condominium Association Coverage Form, 584
Condominium Commercial Unit-Owner’s Coverage Form, 584
Standard Property Policy, 584
Plate Glass Insurance, 584
Commercial Property Coverage for Indirect Loss, 585
Business Interruption Insurance, 585
Extra Expense Insurance, 585
Contingent Business Interruption and Extra Expenses, 586
Leasehold Interest Insurance, 587
Rain Insurance, 587
Boiler and Machinery Insurance, 587
The ISO Breakdown Protection Coverage Form, 588
Direct Damage Equipment Coverages, 588
Indirect Loss Boiler and Machinery Coverages, 589
Deductibles, 590
Suspension, 590
Transportation Coverages, 590
Ocean Marine Insurance, 590
Inland Marine Insurance, 592
The National Flood Insurance Program, 595
The General Property Form Flood Insurance Policy, 596
Nonresidential Condominiums, 596
Insurance Against Dishonesty, 596
Dishonesty Insurance Coverage Triggers, 596
The ISO Crime Insurance Program, 597
Employee Crime Coverages, 597
Nonemployee Crime Coverages, 599
Package Policies for Business Firms, 601
Commercial Package Policy, 601
Businessowners Policy, 601
Summary, 602
Chapter 32. Commercial Liability Insurance, 605
Employers Liability and Workers Compensation, 606
Workers Compensation Policy, 606
General Liability Insurance, 608
General Liability Exposures, 609
Commercial General Liability Coverage, 610
Occurrence-First-Reported Coverage, 617
Other Portfolio Liability Coverages, 618
Miscellaneous General Liability Coverages, 618
Commercial Automobile Insurance, 620
Business Auto Coverage Form, 620
Garage Coverage Form, 623
Trucking, 623
Insurance for Bailees, 626
Bailee Liability, 626
Bailee Liability Coverages, 627
Aviation Insurance, 627
Excess Liability and Umbrella Liability Coverage, 628
Excess Liability Distinguished from Umbrella Liability Contracts, 628
Umbrella Liability Policies, 629
Chapter 33. Surety Bonds and Trade Credit Insurance, 633
Surety Bonds, 634
Suretyship Distinguished from Insurance, 634
Contract Bonds, 635
Judicial Bonds, 635
License and Permit Bonds, 637
Public Official Bonds, 637
Miscellaneous Bonds, 638
Trade Credit Insurance, 638
Specific-Account versus Whole-Turnover Coverage, 639
Proportional versus Excess-of-Loss Coverage, 639
Credit Insurance in Securitization of Accounts Receivable, 640
Collection Service, 640
Credit Enhancement Insurance, 640
Municipal Bond Guarantee Insurance, 641
Municipal Lease Insurance, 641
Commercial Paper Insurance, 641
Industrial Development Bond Insurance, 641
Money Market Fund Insurance, 641
Glossary, G-1
Author Index, I-1
Subject Index, I-3
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