Glossary

Decennial liability is a type of insurance coverage required by construction contracts in some foreign countries (mainly in European countries including France, Finland, Italy, and Spain) that covers the costs to rectify a total or partial collapse of the construction. It draws its name from the fact that it covers this risk for 10 years following completion of the project.

The declarations is the front page(s) of an insurance policy that specifies the named insured, address, policy period, location of premises, policy limits, and other key information that varies from insured to insured.

A declaratory judgment is a legally binding judgment where a court declares the rights and obligations of the parties to a written agreement, such as an insurance policy or other contract. Where the parties to an insurance policy disagree as to the meaning of a policy term, either of them may file an action to obtain a declaratory judgment from a court as to what the policy term means.

Declassification is a corporate governance term, referring to a board of directors in which all directors stand for reelection in the same year. This is in comparison to a classified board, in which directors serve "staggered" terms, is one in which only some directors are up for reelection in any given year. Staggered boards allegedly reduce a firm's value and in the context of hostile takeovers, can operate as a takeover defense, which entrenches management, discourages potential acquirers, and delivers a lower return to shareholders. In contrast, declassified boards raise a board's level of accountability because declassification allows shareholders to respond more quickly (with their votes) if a current board of directors' decisions and actions do not appear favorable to shareholders' interests. Perhaps for this reason, the boards of publicly held corporations are becoming increasingly declassified.

Declination refers to the act of rejecting an application for insurance.

Decreasing term life insurance refers to a term life insurance policy where the face amount declines by a stipulated amount on a periodic basis. It is often used to insure the reducing monthly balance of a home mortgage. An example of a decreasing term life insurance policy is a policy with an initial face amount of $250,000 that decreases by the amount of the remaining mortgage. It decreases as the mortgage is amortized.

The deductible is the amount the insurer will deduct from the loss before paying up to its policy limits. Most property insurance policies contain a per-occurrence deductible provision that stipulates that the deductible amount specified in the policy declarations will be subtracted from each covered loss in determining the amount of the insured's loss recovery. Usually, the amount of the deductible is not subtracted from policy limits.

A deductible plan is a liability or workers compensation insurance rating plan under which an insured retains each loss up to the deductible amount and for which the insurer remains responsible for claim payment if the insured defaults. The insurer is also responsible for claims handling services. This is also known as a filed deductible policy.

Deductible reduction incentive provisions are sometimes included within professional liability policy forms that, under certain conditions, reduce the policy's deductible, typically by 50 percent, if certain conditions are met. Criteria that must be met by the insured are to: (1) report the "incident" to the insurer before the incident becomes a formal claim; (2) use a standard engagement letter for all client projects; (3) agree to settle the claim based on the insurer's recommendation, within 1 year after the claim was made against the insured; or (4) obtain a written agreement with all clients, under which clients consent to mediate or arbitrate—rather than litigate—claims against the insured professional. Insurers offer such provisions because, when the insured takes these kinds of actions, both indemnity and defense costs are generally much lower than would otherwise be the case.

Deemers are some insurers who attach endorsements to property insurance policies in which all property damage (PD) is "deemed" to have occurred at a specific moment in time. For example, the endorsement may provide that all covered PD is deemed to have occurred at the moment damage first began, regardless of when it was discovered. Under these types of endorsements, informally referred to by some as "deemers," the insured's knowledge of a claim is not relevant to which policy is triggered. As with the "first knowledge" endorsement, a given loss can trigger only one policy (assuming all the affected policies have this type of provision), but the actual policy that is triggered could be different under these two approaches.