Glossary

Mutual additional insured status arises when parties agree to name each other as insureds on their respective insurance policies, with the intent that each party (the named insured) provide primary coverage to the other (as an additional insured) for damages arising out of the named insured's negligence.

A mutual benefit association is an organization offering benefits to members for no fixed premiums, but assessments are levied to meet specific losses as they occur.

A mutual company is an insurance company that is owned by its insureds. This is as opposed to a stock insurance company, which is owned by stockholders who are not necessarily insureds. Every owner of a mutual insurer is an insured; every insured is an owner.

A mutual fund is an investment company that raises capital by selling its own stock and then buying other securities as an investment with the proceeds generated.

A mutual law enforcement agreement is a formal agreement between neighboring municipalities to provide law enforcement assistance in emergency situations when a local police department requires additional personnel. Frequently, such agreements contain hold harmless provisions. Although law enforcement liability policies normally exclude contractual assumptions of liability, the policies typically contain exceptions to such exclusions so that liability assumed under mutual law enforcement agreements is usually covered.

A material misrepresentation in an insurance context is a false, misleading, or omitted statement in an insurance policy application or renewal that is significant enough to affect an insurer's decision to issue a policy, set premium, determine coverage terms, or accept a risk. It occurs when an applicant provides inaccurate information or fails to disclose important facts that would influence the underwriting of the risk. Depending on the applicable law, policy language, and circumstances, it is possible for insurers to deny a claim, rescind the policy, adjust terms, or take other action due to a material misrepresentation.

Microinsurance is insurance designed to provide low-cost, limited coverage to low-income individuals, households, or small businesses who may not have access to traditional insurance products. Microinsurance typically covers specific risks such as illness, death, crop loss, livestock loss, property damage, or natural disasters. Often, simplified policy terms, small premiums, and accessible distribution methods are used. The basic purpose of microinsurance is to reduce financial vulnerability by helping insureds recover from losses that could otherwise create significant hardship.