Glossary

The overall operating ratio is a ratio to show the insurer's pre-income tax profitability, taking into account investment income. It includes total expenses as a percent of total income, before adjustments for federal taxes.

Overhead expense insurance refers to a form of health insurance that pays the overhead expenses of a business owner in the event of disability, such as rent, utilities, and employee salaries. Coverage under an overhead expense insurance policy usually does not include the salary, fee-drawing accounts, profits, or other remuneration for the insured, nor is coverage provided for a family member, for a member of the insured's profession who substitutes during the disability, or for anyone sharing business with the insured or anyone employed to perform the duties of the insured.

Overinsurance is an amount that is in excess of the insured object's fair or reasonable value.

Overlapping insurance is coverage from two or more policies or insurers that duplicates coverage for certain hazards in whole or in part. Other insurance clauses are used to coordinate coverage and avoid allowing insureds to secure an excessive recovery when this occurs.

An override is an agreement between an insurer and intermediary (or between an insurer and reinsurer or a retrocessionaire) based on the percent of written (or ceded) premium that will be guaranteed income to the intermediary/insurer/reinsurer. There is usually a credit offset for other commissions (regular and contingent commissions) paid. This introduces a question of how fees paid by an insured to an intermediary are handled and should be disclosed along with other income, such as contingent commissions.

Overriding commission is an insurance commission paid by an insurer to an agent or managing general agent for premium volume produced by other agents in a given geographic territory. In reinsurance, it is a commission paid to an intermediary in return for placing a retrocession of reinsurance.

Overtime surcharge is extra pay for overtime hours worked by employees. When an employee works overtime, many firms pay them time and a half or double time for the overage worked. States govern how the additional payroll charge is handled for the computation of workers compensation premium. Normally, the only payroll that goes into a workers compensation premium calculation is the basic rate of pay per hour. Any additional compensation for overtime worked in excess of the regular hourly rate, subject to state-specific exceptions, is deleted from the payroll when computing workers compensation premiums.

The owner-claimant rule is a legal tactic where the damaged property must be owned by the claimant at the time of the property damage in order for the liability to be covered. The court in American States Ins. Co. v. PIH Beaverton, LLC, 2016 U.S. Dist. LEXIS 83188 (D. Or. May 3, 2016), observed that a majority of courts have rejected this somewhat novel rule on the basis that there was nothing in the insuring clause or the policy definition of property damage to support that limitation on coverage. Quite understandably, the court denied American States' motion on that basis.

An owner-controlled insurance program (OCIP) is a centralized insurance program arranged and controlled by a project owner to cover eligible contractors and subcontractors working on a specific construction project or group of projects. Also known as a wrap-up insurance program, an OCIP typically provides coverage such as general liability, workers compensation, and excess liability, with other coverages sometimes included or purchased separately. The benefit of an OCIP is that, by placing project participants under a single program, an OCIP can help reduce coverage gaps, avoid duplicate insurance costs, coordinate claims handling, and give the owner greater control over insurance terms, limits, safety requirements, and claim administration. Contractors generally remain responsible for insurance that is not included in the OCIP, such as off-site work, excluded operations, or required deductibles and retentions.

Owner-operator is an independent motor carrier who leases their vehicle, with driver, to another motor carrier, either on a permanent or a short-term basis. The owner-operator, rather than obtaining his or her own operating authority, operates under the authority of the trucking firm to which the vehicle is leased.