Glossary

The Erie Doctrine is a fundamental legal doctrine of civil procedure that was established by a seminal US Supreme Court case, , 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938). It holds that federal courts cannot make common law of their own and must, therefore, apply the common law of the state in which they sit. A federal court in California must follow California state court decisions, a federal court in New York must follow New York state court decisions, and so forth. For insurance coverage matters, this means that federal courts must apply state court decisions interpreting insurance policy language and cannot develop contrary interpretations of their own.

An errors and omissions clause is a provision, usually in an obligatory reinsurance treaty, stating that an error or omission in reporting a risk that falls within the automatic reinsurance coverage under such treaty shall not invalidate the liability of the reinsurer on such omitted risk.

Errors and omissions (E&O) insurance protects the insured against liability for committing an error or omission in performance of professional duties. Generally, such policies are designed to cover financial losses rather than liability for bodily injury (BI) and property damage (PD).

An error or omission in reporting endorsement is a liberalization of the reporting requirements of property policies when written on a property value reporting basis. Such policies require the insured to report insurable values on a monthly, quarterly, or semiannual basis and, as a result, have very stringent reporting procedures that, unless adhered to, could cause claim settlement problems. A typical error or omission in reporting endorsement reads as follows: "It is agreed that this insurance shall not be prejudiced by any inadvertent omission in reporting of values hereunder, or unintentional error in amount, if prompt notice is given to this company as soon as said omission or error becomes known and deficiency of premium, if any, be made good."

An escape provision allows a contracting party to avoid a limitation on the other party's liability by paying an additional fee. The extra fee may be used to purchase insurance to cover the additional risk or to finance the retention of the risk. It can be found sometimes embedded in a limitation of liability provision in a standard commercial contract form.

Essential functions is a term contained in the Americans with Disabilities Act (ADA) of 1990 relating to the need for an employer to accommodate a disabled individual who can perform the essential functions of an employment position. Essential functions of a job are those fundamental and necessary for the job to be performed. The individual need not be able to perform those job functions that are not necessary for the job to be performed or are marginal in nature.

An estate plan is a plan for the systematic liquidation of one's estate. Conservation of estate assets is the uppermost consideration.

Estimated premium is a preliminary figure that may be adjusted to reflect the extent of coverage provided under a given contract.

Estimatics, as the Federal Trade Commission (FTC) defines them, apply commonly available statistical formulas to analyze vehicle claims—methods that may seem arcane and complex to the public, but which are easily recognized in various professions and areas of expertise. Basically, estimatics is the process of determining the cost of the damage to property before it is damaged.

Estoppel is a legal doctrine that precludes a party from contradicting its own previous actions if those actions have been reasonably relied on by another party. For example, an insurer that has repeatedly accepted late premium payments from an insured may be estopped from later canceling the policy on the basis of nonpayment because the insured has been reasonably led to believe that late payments are acceptable.