Glossary

Panel counsel is an attorney or law firm chosen by an insurance company to represent its policyholders in defending liability claims. Defense firms are selected for the panel based on their expertise in handling claims involving the particular coverage lines written by the insurer and their willingness to use billing rates acceptable to the insurer. When a policy is written on a duty to defend basis, either the insurer selects or the insured is allowed to select defense counsel from one of the firms contained within the panel. However, in some instances, insurers allow insureds to choose law firms that are not part of a panel. This is especially true if (1) the request is made prior to policy inception, and (2) the insured's preferred firm has demonstrated capabilities in the applicable line of coverage.

A paralegal is someone who is trained and certified to perform any function of assistance to a lawyer. Can perform summaries, research, investigation, and the retrieval of records.

Parallel proceedings refer to legal proceedings against corporate directors and officers that are separate from, but related to and therefore parallel to, securities class action lawsuits. There are five types of parallel proceedings: (1) derivative lawsuits; (2) opt-out lawsuits; (3) Employee Retirement Income Security Act (ERISA) stock drop litigation; (4) investigations by regulatory agencies; and (5) criminal proceedings.

A parameter risk is a description of the uncertainty in estimating the exact nature of the loss process in which statistical models are used to describe the randomness of the loss process. The choice and specification of these models are themselves exposed to potential errors in estimation.

Parametric insurance is an agreement under which an entity assuming risk (the "insurer") agrees to pay the indemnitee (the "insured") an agreed amount upon the occurrence of a specified event, such as an earthquake or hurricane of specified intensity. The event, or "parameter," is often indicated by an established and authoritative index for that type of event, such as the Richter scale for earthquake intensity or the Saffir-Simpson scale for hurricanes. For that reason, parametric coverage is also referred to as "index-based insurance." Parameters can be defined by other objective factors, such as the extent of physical damage, and are typically limited to certain time periods and geographic areas. The parties may also develop customized risk parameters based on wind speeds, storm surge, rainfall (or lack thereof), and other factors, both natural and human-driven, alone or in combination.

Parcel post coverage is inland marine coverage on packages shipped by registered or unregistered mail or parcel post against all risks of transportation, from the time property is placed in custody of the US Postal Service.

A parent company is the "flagship" or senior company when property-casualty (P&C) insurers constitute a group of companies. The use of multiple corporate entities allows additional flexibility in working with varying state regulations. For example, an insurance company group might consist of one or more admitted insurers and one or more nonadmitted insurers operating in various states. The entire group is often referred to by the parent company's name.

The pari passu rule is a general principle of English insolvency law that all unsecured creditors must be treated equally.

Parol evidence refers to facts outside a contractual agreement that may be used to interpret the agreement. Contract law prescribes a complicated set of tests—termed the parol evidence rule—by which the admissibility of parol evidence in discerning the contracting parties' intent may be decided. The admissibility of parol evidence is extremely limited in cases of an integrated agreement—a contract whose provisions make it clear that it contains within itself all the terms of the agreement between the parties. The "entire contract" clause found in many insurance policies is intended to make those policies integrated agreements and prevent the use of parol evidence in interpreting them.

Partial disability is a disability that is not total. The definition of partial disability varies from policy to policy, but it is often defined as "the inability of the insured to perform one or more of the important duties of his or her occupation." When a disability income policy covers partial disability, the benefit is usually equal to a specified percentage (e.g., 50 percent) of the total disability benefit for a limited time period (e.g., 3, 6, or 9 months).