Glossary

Dual capacity is the principle, defined in a number of court cases, that a business may stand in relation to its employee not only as employer, but also as supplier of a product, provider of a service, owner of premises, etc. When a work-related injury arises out of one of these secondary relationships, the exclusivity of workers compensation as a source of recovery to the injured worker may be challenged, and the employee may be allowed to sue the employer. Such actions are covered by the employers liability insurance of the standard workers compensation policy.

A dual life stock insurance company is a life insurer formed as a stock company that issues both participating and nonparticipating life insurance policies.

Due diligence is the exercise of proper care and attention to a business transaction. This term is commonly used to refer to the review of financial and legal documents in a merger or acquisition but is equally applicable to virtually any decision-making process, including whether to insure or self-insure, whether to form a captive insurance company, and a host of other risk management decisions.

Duplication is a risk control technique that entails the utilization of backups or spares. For example, backup business data should be stored at a location separate from the main place of business.

Duty to defend is a term used to describe an insurer's obligation to provide an insured with defense to claims made under a liability insurance policy. As a general rule, an insured need only establish that there is potential for coverage under a policy to give rise to the insurer's duty to defend. Therefore, the duty to defend may exist even where coverage is in doubt and ultimately does not apply. Implicit in this rule is the principle that an insurer's duty to defend an insured is broader than its duty to indemnify. Moreover, an insurer may owe a duty to defend its insured against a claim in which ultimately no damages are awarded, and any doubt as to whether the facts support a duty to defend is usually resolved in the insured's favor. With respect to directors and officers and employment practices liability insurance policies, policies containing explicit "duty to defend" wording obligate an insurer to assume control of the claim defense process, including selecting counsel and paying legal bills. In contrast, non-duty to defend (or duty to pay) policies require only that the insurer reimburse the insured for funds expended by the insured in defending a claim.

"Duty to pay" is used to describe the nature of an insurer's defense obligations under directors and officers and employment practices liability insurance policies. Forms containing duty to pay (or non-duty to defend) provisions require only that the insurer reimburse the insured for funds expended by the insured in defending a claim. In contrast, policies containing "duty to defend" provisions require the insurer to assume control of the claim defense process, including selecting counsel and paying legal bills.

A dwelling is a homeowners and dwelling property term denoting the structure on the residence premises that is listed in the declarations and used principally as a private residence, including attached structures. Examples of attached structures include carports and patio roofs.

Dwelling property coverage forms are alternatives to homeowners policies that may be used to insure physical damage to dwellings and personal property. Unlike homeowners forms, these policies do not insure liability or medical payments exposures. There are three dwelling property forms in the Insurance Services Office, Inc. (ISO), forms portfolio: the Basic Form (DP 00 01), the Broad Form (DP 00 02), and the Special Form (DP 00 03). The basic form covers only damage from fire, lightning, and internal explosion, but additional perils can be covered by endorsement. The broad form covers direct damage to dwellings and personal property on a broad named perils basis. The special form covers direct damage to dwellings and appurtenant structures on an all risks basis while covering personal property on a broad named peril basis.

Dynamic financial analysis is the name for a class of structural simulation risk model of insurance company operations, focusing on underwriting and financial risks, designed to generate financial pro forma projections. Statistical modeling techniques that project an outcome not on a static basis—that is, under one set of defined assumptions or the same assumption with one or two variables changed—but to project a range of possible outcomes assuming constant movements in interrelated variables.

Dynamic risk is risk that arises as a result of organizational change.