Glossary

The unconditional settlement clause is a provision that requires the insured to approve all settlements proposed by an insurer. Under such provisions, an insured can reject an insurer's proposal and, unlike the standard "blackmail settlement clause," incurs no liability if the claim is ultimately settled or adjudicated for a larger amount.

Unconscionable in an insurance context refers to a contract or contractual provision that is so unfair or oppressive to one party that no reasonable or informed person would agree to it. An unconscionable contract or provision leaves one party with no real, meaningful choice and is unreasonably advantageous to the other party, usually due to the other party's superior bargaining power. "Unconscionability" is a defense against the enforcement of a contract or a contract provision. Courts look at a number of factors when determining whether a contract is unconscionable, including the disparate bargaining power of the parties, whether one party was more sophisticated than the other, and whether the agreement was a contract of adhesion. Courts also scrutinize the contract provisions to determine whether they are oppressive, unfair, or overly harsh. A court may refuse to enforce an unconscionable contract, void the unconscionable clause and enforce the remainder of the contract, or enforce the contract but limit an unconscionable clause's application to avoid an unconscionable result.

Unconscious bias in an insurance context refers to a type of employment-related claim alleging that with respect to promotions, raises, and job offers, women and minorities are often discriminated against because they face preconceived stereotypes in evaluations, despite conscious efforts to do otherwise. The leading proponent of this theory is sociologist William Bielby, who regularly testifies on behalf of employee plaintiffs in major employment discrimination cases (including those against Wal-Mart, FedEx, and Johnson & Johnson). As an example of unconscious bias, Dr. Bielby's research found that in identifying candidates for management positions requiring relocation, hiring managers systematically excluded women from consideration because they reflexively assumed that women weren't interested in jobs requiring them to move long distances. Critics of unconscious bias claims assert that while stereotypes are admittedly involved in interactions between strangers, when a Caucasian manager has known an employee for a significant time period, he will apply what is referred to as "individuating information," thereby allowing him to make objective decisions on the basis of the employee's individual skills and abilities rather than on gender or racial stereotypes.

Underground property damage is used in insurance to refer to damage to wires, conduits, pipes, mains, sewers, tanks, tunnels, any similar property, and any apparatus in connection beneath the surface of the ground or water. An underground property damage exclusion would remove coverage for this class of property caused by and occurring during the use of mechanical equipment during construction operations such as grading land, paving, excavating, drilling, burrowing, filling, backfilling, or pile driving.

Underinsurance is a situation resulting from a failure to carry enough coverage on the value of a property, especially when there are coinsurance implications.

Underinsured motorists (UIM) coverage applies to bodily injury and, in some states, property damage incurred by an insured when an auto accident is caused by a motorist who is not sufficiently insured. Depending on the jurisdiction, UIM coverage may be written with a limits trigger or a damages trigger. With a limits trigger, UIM coverage applies when the limits of liability carried by the other motorist are lower than the UIM limits carried by the insured. With a damages trigger, UIM coverage applies when the insured's damages are more than the at-fault party's available limits.

Underlyers are insurance policies occupying layers of coverage below the particular policy being referred to. For example, a general liability policy and an umbrella liability policy might be underlyers for an excess liability policy.

Underlying coverage, with respect to any given policy of excess insurance, is the coverage in place on the same risk that will respond to loss before the excess policy is called on to pay any portion of the claim.

Underlying interest refers to the assets, liabilities, other interests, or a combination thereof underlying a derivative instrument, such as any one or more securities, currencies, rates, indexes, commodities, or derivative instruments.

An underwriter is any individual in insurance who has the responsibility of making decisions regarding the acceptability of a particular risk and of determining the amount, price, and conditions under which the risk is acceptable.