Glossary

Discovery in an insurance context is the investigation of the facts of a claim or the alleged proximate cause of an injury. Discovery may include such activities as interrogatories, depositions, expert examination of a product, and review of a plaintiff's medical history.

The discovery cover is coverage for losses that are discovered during the term of a reinsurance treaty, regardless of when they occurred.

The discovery period in the insurance context is the period of time after expiration allowed an insured to identify and report losses occurring during the period of a policy or a bond.

Discovery provisions permit insureds to report incidents or circumstances that may result in claims in the future, found mainly in professional liability insurance policies written with claims-made coverage triggers. Discovery provisions, which are also known as "awareness" or "notice of potential claim" provisions, allow an insured to lock in coverage for such events so that coverage will apply under the current claims-made policy, regardless of how far in the future a claim is eventually made in conjunction with the incident that has been reported.

The discovery rule provides that the statute of limitations on bringing a claim does not begin to run until the date on which a claimant actually discovers (or should have discovered) an injury or loss—rather than on the date when the wrongful act giving rise to the injury or loss took place. The rule has the effect of lengthening the normal statute of limitations period applicable to many types of claims.

Discrimination in an insurance context is the act or process of evaluating insurable risks and determining premiums on the basis of likelihood of loss. Insurance laws prohibit "unfair discrimination"—that is, the formulation of rates on the basis of criteria that do not fairly measure the actual risk involved. Unfair or illegal treatment of or denial of rights to persons on the basis of certain arbitrarily chosen attributes or characteristics, including race, gender, religion, creed, age, medical condition, pregnancy, sexual orientation/preference, physical appearance, marital status, physical or mental disability, or national origin. Discrimination does not usually fall within the coverage terms of the commercial general liability policy (and may even be specifically excluded by endorsement) but may be covered as a form of personal injury under some umbrella policies. However, employment practices liability insurance covers a variety of employment-related claims, including discrimination.

Disease loading is an additional premium charge included in certain workers compensation classification code rates that reflects specific disease hazards relative to the operations involved and therefore the increased exposure to loss.

Disintermediation risk refers to the potential that policyholders may relinquish policies due to rising interest rates. If interest rates rise too rapidly, then policyholders may surrender policies faster than expected, potentially resulting in cash flow obligations that exceed returns on investment assets. Alternatively, during persistent periods of low interest rates when policy surrender rates tend to decrease, insurers face the risk that investment returns will decline to the point that they are unable to service ongoing liabilities. In either scenario, the sensitivity of investment income and policy obligations to interest rate changes could have a considerable impact on equity value.

In accident and health insurance policies, dismemberment encompasses loss of limbs or sight. A fixed benefit is paid to insureds who suffer certain types of dismemberment under these policies. The policy will typically pay the principal sum for loss of both hands, both feet, the sight of both eyes, one hand and one foot, or the sight of one eye and one hand or foot. For loss of any one, it will usually pay a percentage (e.g., 50 percent) of the principal sum.

A dismissal is an order or judgment disposing of an action, suit, motion, etc., without a judgment or trial.