Glossary

The policy period signifies the duration of the policy. The policy period encompasses the time between the exact hour and date of policy inception and the hour and date of expiration.

Policy registers are historical listings of all policies issued by an insurer, showing reinsurance.

Policy territory refers to insurance policy provisions that specify the geographic area in which coverage applies. With property and inland marine insurance the territory will usually specify where the property must be located when damage occurs for the policy to apply. Similarly, liability insurance will generally specify where the injury or damage must occur for coverage to apply. Some liability insurance policies may specify a broad territory for coverage but require that the suit must be made in a more restricted territory. For example, an umbrella liability policy might provide coverage worldwide but only if the claim or suit is brought in the United States.

A policy writing agent is empowered to write and issue policies on behalf of his or her insurer.

A policy year is the period between anniversary dates.

Policy year experience associates the premium and losses with a given annual policy period. The policy year experience for an individual insurance policy includes each premium and loss transaction that relates to that particular policy. An aggregate policy year experience for an entire book of business is calculated by including the individual experience of all policies that became effective during that year. For example, 20YY policy year data would include the experience of all policies effective between January 1, 20YY, and December 31, 20YY, regardless of the date on which losses or other events associated with those policies occur. This approach provides a clear match between losses and premiums.

Political risk insurance (PRI) is a specialized insurance for companies doing business or conducting operations in foreign countries. The insurance addresses the business exposures to loss faced by these companies as a result of governmental action either foreign or domestic. Types of exposures that can be covered under political risk policies include confiscation, expropriation, deprivation, nationalization, political violence, currency inconvertibility, contract frustration, and export credit.

Political violence refers to general conditions of war, civil war, insurrection, and civil strife, as well as acts of sabotage and terrorism that cause losses to insured operations. This coverage applies apart from any insurance that may cover direct damage to property of the insured. Political violence policies cover property damage, loss of income, and extra expenses that result from acts of violence listed and defined in the policy. Covered acts vary but may include war, civil war, malicious damage, terrorism, sabotage, riot, strike, and civil commotion.

Pollutant, as defined in standard liability insurance policies, is an irritant or contaminant, whether in solid, liquid, or gaseous form, including—when they can be regarded as an irritant or contaminant—smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste.

A pollutant standard index (PSI) is a measure of adverse health effects of air pollution levels in major cities.