Glossary

A drone, or unmanned aircraft, is an aircraft that is operated without the possibility of direct human intervention from within or on the aircraft. In addition to the most obvious uses for delivery and photography, drones have been adopted by risk managers and insurance companies to perform a variety of functions that improve productivity and safety in the field, such as claims adjusting in disaster areas, wildfire suppression, inspections, and documentation.

Dropped medical malpractice claims refers to the phenomena that the most frequent outcome of a medical malpractice claim is that it will be "dropped" (i.e., abandoned) by the claimant, rather than either settled or adjudicated in a court of law. Medical malpractice claims are dropped for a number of reasons, including (in order of frequency from highest to lowest) (1) the case against the doctor turns out to be weaker than originally believed; (2) the claim involves multiple defendants, only some of whom are dropped from the claim; (3) changes in prevailing medical treatment standards (i.e., a doctor's method of treatment at the time of the claim was of state-of-the art quality, yet subsequent advances in medical technology made such treatment appear substandard); (4) changes in the plaintiff's condition (typically for the better); and (5) plaintiff's lack of candor with his/her attorney. Although they result in no indemnity payments, dropped medical malpractice claims do involve significant costs. (A dropped claim involves a claim against a single individual or entity, whereas a dropped case involves a claim against multiple individuals or entities.)

A drop down provision is a clause in umbrella policies providing that the umbrella will "drop down" over reduced or exhausted underlying policy aggregate limits. Some umbrellas maintain their own coverage terms when they drop down; others assume those of the primary policy.

Druggist liability insurance is a form of professional liability insurance protecting the druggist against suit arising out of the filling of prescriptions, misdelivery of drugs, and other operations.

A dry pipe sprinkler system is an automatic sprinkler system that can be used in an unheated building without risk of freezing and subsequent bursting of pipes, because the system fills with water only when the sprinkler heads are triggered by the heat of a fire.

A dual agency refers to a situation in which an individual may serve as an agent for two parties in the same transaction. For instance, court cases have held that insurance brokers can function as agents of (and therefore owe legal duties to) both insureds and insurers in the same transaction.

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.