Glossary

A freight broker is a person, firm, or corporation that arranges transportation of commodities for a fee. The broker does no hauling and assumes no responsibility for the property being transported. Under the Interstate Commerce Commission (ICC) Termination Act, brokers are still required to register and file proof of required levels of financial responsibility.

A freight forwarder is an entity that purchases motor service from a licensed motor carrier. Unlike a freight broker, a freight forwarder assumes responsibility for a shipment from origin to destination and typically issues bills of lading. The Interstate Commerce Commission (ICC) Termination Act requires all freight forwarders to register, not only those concerned with household goods. Security requirements must be met, although only household goods (HHG) freight forwarders are required to carry cargo insurance.

Frequency is the likelihood that a loss will occur. Expressed as low frequency (meaning the loss event is possible but has rarely happened in the past and is not likely to occur in the future), moderate frequency (meaning the loss event has happened once in a while and can be expected to occur sometime in the future), or high frequency (meaning the loss event happens regularly and can be expected to occur regularly in the future). Workers compensation losses normally have a high frequency as do automobile collision losses. General liability losses are usually of a moderate frequency, and property losses often have a low frequency.

Friable asbestos is any material containing more than 1 percent asbestos that can be crumbled or reduced to powder by hand pressure.

A friendly fire is an intentionally kindled fire that remains within its intended confines, such as in a furnace or fireplace. The courts have generally held that property insurance written on a named perils basis does not cover damage done by a friendly fire. However, property insurance written on an all risks basis does cover damage from a friendly fire, since there is no exclusion for such damage. Contrast with hostile fire.

Fronting refers to the use of a licensed, admitted insurer to issue an insurance policy on behalf of a self-insured organization or captive insurer without the intention of transferring any of the risk. The risk of loss is retained by the self-insured or captive insurer with an indemnity or reinsurance agreement. However, the fronting company (insurer) assumes a credit risk since it would be required to honor the obligations imposed by the policy if the self-insurer or captive failed to indemnify it. Fronting companies charge a fee for this service, generally between 5 and 10 percent of the premium being written. Fronting arrangements allow captives and self-insurers to comply with financial responsibility laws imposed by many states that require evidence of coverage written by an admitted insurer, such as for automobile liability and workers compensation insurance. Fronting arrangements may also be used in business contracts with other organizations, such as leases and construction contracts, where evidence of coverage through an admitted insurer is also required.

A front company is an insurer that issues a policy and cedes all or a substantial part of the risk to another insurer. Certain types of statutory coverages requiring evidence of insurance from admitted insurers are fronted and reinsured by captives. A "pure front" is one that delegates underwriting and claims handling authority to the reinsurer or a managing general agent (MGA). Most insurers that front for captives are not pure fronts.

Front pay consists of damages claimed by a former employee representing future wages and benefits that would have been paid had the former employee not been terminated or had the employee not been forced to resign. Given the frequency with which jury awards include monies for "front pay," coupled with the potential magnitude of such awards (a wrongfully terminated 40-year-old former employee could conceivably receive 25 years of front pay), coverage for this element of damages under employment practices liability insurance (EPLI) policies is desirable. Although most of these forms do not include "front pay" within their definitions of "covered damages," neither do they exclude the exposure and, therefore, cover it.

The Fujita scale is for rating tornado intensity and is based principally on the damage done to structures and trees. Meteorologists and engineers typically determine the official Fujita scale category after an exhaustive aerial and ground-level damage survey. The scale ranges from F0 (light damage with winds under 73 mph) to F4 (devastating damage with winds from 207 to 260 mph).

Full-timers coverage is found in motor home insurance policies, providing personal liability and medical payments coverage. A full-timer is a person who uses the motor home as a permanent or primary residence for at least 150 days per year, although the days do not need to be consecutive. This coverage is also chosen for persons who do not own a home, instead relying on their motor home as their residence. The coverage is similar to the liability and medical payments coverage found in most homeowners policies.