Glossary

Enterprise risk management (ERM) is a holistic approach to identifying, defining, quantifying, and treating all of the risks facing an organization, whether insurable or not. Unlike traditional risk management, ERM deals with all types of risk, such as hazard or event risk, operational risk, credit risk, and financial risk.

The entire contract clause is a standard insurance contract provision that limits the agreement between the insured and the insurer to the provisions contained in the contract. The clause functions primarily for the protection of the insured.

An entity buy-sell agreement is an agreement between a partnership or a corporation, as an entity, and the owners (partners or stockholders) that, upon the death of an owner, the company (partnership) will purchase the deceased owner's share of the business. The ownership of the company is still maintained by the surviving owners. The result is that the survivors each have a larger share of the company, and the deceased owner's estate is provided with cash it will need.

Entity coverage affords direct coverage of the insured organization under a directors and officers (D&O) liability policy. Typically, corporate D&O forms only reimburse the insured organization when it is legally obligated to indemnify corporate officers and directors for their acts on behalf of the organization. However, if a lawsuit specifically names the insured organization as a defendant, the standard D&O policy does not provide coverage. Entity coverage, which used to be provided only under D&O policies written for nonprofit organizations and healthcare institutions, is now designed to cover the organization directly in addition to its directors and officers. A number of corporate D&O forms will now provide an entity coverage endorsement for an additional premium.

Entity securities coverage is the section of a directors and officers (D&O) liability insurance policy covering the corporate entity when claims are made against the entity in conjunction with securities it has issued. Claims covered by this section of the policy usually result from a specific corporate action that causes a drop in the market price of the firm's securities. "Side C" coverage, as entity securities coverage is often referred to, is actually an extension of the regular coverage afforded by of D&O liability policies, for which additional premium is required.

An environmental assessment is an analysis prepared pursuant to the National Environmental Policy Act (NEPA) to determine whether a federal action would significantly affect the environment and, thus, require a more detailed environmental impact statement.

An environmental audit is an independent assessment of the current status of a party's compliance with applicable environmental requirements or of a party's environmental compliance policies, practices, and controls.

An environmental impact statement is a document required of federal agencies by the National Environmental Policy Act (NEPA) for major projects or legislative proposals significantly affecting the environment. A tool for decision-making, it describes the positive and negative effects of the undertaking and cites' alternative actions.

An environmental liability buyout is when a third-party contractually assumes the ownership of the known environmental conditions in a given property. In exchange for a cash payment to a third party, the third party will assume all obligations for remediation and liability associated with known conditions. The assuming party will then complete all required remedial activities, negotiate with the US Environmental Protection Agency (EPA) or other regulatory bodies, and provide a full indemnity to the "seller." Procedurally, the contractual assumption typically requires that the assuming party purchase an environmental insurance policy to backstop their indemnity. Thus, the ceding company will be protected in the event of the failure of the indemnitor. To protect the funds transferred to the third party, the contract's insurance provisions typically dictate the use of a finite risk insurance policy.

Environmental Monitoring and Assessment Program (EMAP) data is the information collected under the auspices of the EMAP. All EMAP data share the common attribute of being of known quality, having been collected in the context of explicit data quality objectives (DQOs) and a consistent quality assurance program.