Glossary

Object in an insurance context refers to a boiler and machinery (BM) insurance term for equipment or machinery. BM coverage applies to loss or damage resulting from an accident (such as a breakdown or explosion) to a covered object.

Objective findings are observations made during medical evaluations that are not under the patient's control, such as X-ray results, nerve conduction studies, and MRIs.

An obligatory treaty is a reinsurance treaty between an insurer and a reinsurer (usually involving pro rata reinsurance), in which the insurer agrees to automatically cede all business that falls within the terms of the treaty. The reinsurer, in turn, is obligated to accept such business.

An obligee is person or organization to whom another party (the "obligor") owes an obligation. In risk management, the most common use of this term is in bonding. For example, under a performance bond, the obligee is the project owner for whom the bonded contractor is required to perform the specified work.

An obligor is a person or organization that is bound by an obligation to another. In risk management, the most common use of this term is in bonding. For example, under a performance bond, the obligor is the contractor who supplies a bond to a project owner guaranteeing its performance of the contract.

An occasional driver in auto insurance is a person who is licensed to use an insured vehicle infrequently. In other words, an occasional driver is not the vehicle's primary or principal driver. The designation is often used for household members or other permitted drivers who may operate the vehicle from time to time. Insurers may consider factors such as frequency of use, mileage, residence in the insured household, age, driving record, and policy rules when deciding whether the person must be listed and how the premium is charged as a result. If the driver's use becomes regular or primary, the insurer may require that the driver be reclassified. Providing inaccurate information on such drivers can affect rating, coverage, or claim response.

Occupancy, in a property insurance context, refers to the manner in which a building, dwelling, or premises is used and whether it is actively or temporarily occupied or vacant. Insurers use occupancy to evaluate risk, determine eligibility and premium, and apply policy conditions or exclusions because the presence or absence of people, operations, furnishings, and ongoing maintenance can affect the likelihood and severity of loss. An inaccurate description of occupancy by the insured—such as failing to disclose a vacancy, rental use, business use, or change in tenants—can affect underwriting, coverage, or claim response.

Occupational accident insurance is a type of coverage purchased by firms that have chosen to opt out of the Texas workers compensation system. The policies allow an employer to provide benefits similar to those afforded under workers compensation laws.

Occupational classification, in workers compensation, is the assembling of like occupations together for classification and premium rating purposes. The rationale for the grouping is that certain occupations share common exposures and hazards.

Occupational disease (OD) is any abnormal condition or disorder, other than one resulting from an occupational injury, that is caused by, or alleged to be caused by, exposure to environmental factors associated with employment, including acute and chronic illnesses or diseases that may be caused by inhalation, absorption, ingestion, or direct contact. State workers compensation laws vary as to whether coverage is afforded for occupational disease.