Glossary

A special employer is an employer involved in a borrowed servant arrangement that has been loaned a worker by another employer.

Special Flood Hazard Area (SFHA) refers to the land area covered by the floodwaters of the base or 100-year flood (an area of land that has an approximate 1 percent probability of a flood occurring on it in any given year). SFHA is a term used by the Federal Emergency Management Agency (FEMA) in the National Flood Insurance Program (NFIP). In these areas, the NFIP's floodplain management regulations must be enforced, and the mandatory purchase of flood insurance applies. Structures located in SFHAs have a 26 percent chance of suffering flood damage over the normal 30-year life of a loan, according to FEMA. Structures that are not located in SFHAs are viewed as less subject to flooding. SFHAs are identified in flood insurance rate maps (FIRMs).

A special investigative unit within an insurance company is charged with detecting and pursuing action against fraudulent activities on the part of insureds or claimants.

A special litigation committee (SLC) is appointed by a board of directors when challenged by a shareholder derivative litigation to consider whether the corporation's best interest is to pursue or terminate the derivative litigation against the directors. The SLC is a last chance for a corporation to control a derivative claim when a majority of its directors cannot impartially consider the demand. The board vests its power to determine what to do with the suit to a committee of independent directors. Generally, if the SLC recommends terminating the derivative suit, the court will defer to the recommendation if the committee shows that its members were independent, acted in good faith, and had a reasonable basis for their conclusions.

Special mobile equipment is a statutory term used in more than half the states that is generally defined to be construction vehicles that are not designed or used primarily for the transportation of persons or property but that are incidentally operated or moved over public roads. Examples of special mobile equipment include asphalt spreaders, bituminous mixers, bucket loaders, ditchers, leveling graders, finishing machines, motor graders, road rollers, scarifiers, earth moving carryalls, scrapers, power shovels, self-propelled cranes, earth moving equipment, and the like. Pieces of equipment that qualify under a state statutory definition of "special mobile equipment" are exempt from that state's licensing, registration, and/or financial responsibility laws. However, state "special mobile equipment" provisions may contain a list of certain pieces of equipment that do not qualify, such as dump trucks, or truck-mounted transit mixers, cranes, or shovels. Each state's "special mobile equipment" definition must be examined closely to see what types of equipment qualify and what types do not. Any nonexempt equipment may remain subject to that state's licensing, registration, and/or financial responsibility laws.

A special mortality table refers to a mortality table developed for purchasers of annuities that reflects the fact that people who purchase annuities have a longer life expectancy than the population as a whole.

Special perils refers to property insurance that insures against loss to covered property from all fortuitous causes except those that are specifically excluded. This method of identifying covered causes of loss in a property policy has traditionally been referred to as "all risks" coverage. Many industry practitioners continue to use the term "all risks" to describe this approach to defining covered causes of loss in a property insurance policy. However, it is no longer used in insurance policies because of concern that the word "all" suggests coverage that is broader than it actually is. Because of this concern, some industry practitioners have begun to use the term "special perils" or "open perils" instead of "all risks."

A special personal auto policy (SPAP) that provides limited auto coverage, particularly for nonowned auto and permissive use situations. Specifically, it limits coverage for family members to maintenance or use of the named insured's covered autos only. It also limits coverage for a permissive user to maintenance or use of the named insured's covered auto up to the state's minimum financial responsibility requirements. Developed by Insurance Services Office, Inc. (ISO), as a way for its member companies to offer nonstandard auto coverage, the SPAP adds exclusions for the following: punitive damages, newspaper and food delivery, business use of nonowned autos, driving under the influence, use by an unlicensed operator, undisclosed business use, undisclosed operator, and customizing equipment. Unlike the personal auto policy (PAP), the SPAP does not provide the following: a 90-day extension of coverage for a nonresident spouse, liability coverage for a nonowned golf cart, rental coverage after theft of the covered auto, and the $1,000 of coverage contained in the PAP for aftermarket electronic equipment.

A special purpose vehicle (SPV) is a company created by (but not owned by) an insurer or reinsurer for the sole purpose of issuing debt (usually in the form of a catastrophe bond). The use of SPVs is restricted to off-shore domiciles to be able to maintain the issuer's (the US-based insurer or reinsurer) US tax and accounting treatments with regard to such transactions.

Special risks denotes those accounts whose premium size, unique exposures, or other characteristics are such that they require specialized handling by an underwriting operation specifically set up for that purpose. What constitutes a "special risk" varies by insurer.