Glossary

Property transfer liability insurance covers the buyer of a property for third-party bodily injury (BI) and property damage (PD) claims and cleanup costs arising out of the environmental contamination of the property, but only for contamination that had not yet been detected as of the policy's inception date.

Proportional liability refers to an arrangement for the assignment of liability in which each member of a group is held responsible for the financial results of the group in proportion to its participation.

Proportional reinsurance refers to premiums and losses that are calculated on a pro rata basis.

Proration is the adjustment of policy benefits due to a change of exposure or existence of "other insurance."

A prospect is a potential buyer of insurance.

Prospecting is the act of looking for potential buyers of insurance.

Prospective aggregates refer to spread loss programs giving accident year reinsurance for long-tail risks with premiums paid annually over the expected life of the policy.

Prospective rating is a method used in arriving at an insurance or reinsurance rate and premium for a policy period based on the loss experience of a prior period.

The prospective reserve is a reserve amount designated as a liability for life and health insurance companies to pay the difference between projected benefits and projected premiums, including investment income.

Protection and indemnity (P&I) insurance is liability insurance for practically all maritime liability risks associated with the operation of a vessel, other than that covered under a workers compensation policy and under the collision clause in a hull policy. There is no standard P&I form with the specific terms and conditions for each insured tailored by underwriters based on the nature of the risk and the character and amount of insurance desired by the insured. Additionally note that since the P&I policy is essentially a contract of indemnity, the insurer is not obligated to pay unless the insured must actually pay the claim.