Glossary

A failure to insure exclusion is found primarily in directors and officers (D&O) liability policies and, to a lesser extent, in public officials liability policies. This exclusion precludes coverage for claims made against insureds when claimants suffer losses resulting from failure to purchase insurance coverage, provided such coverage was available. Many have criticized the rationale for this exclusion because intentional self-insurance—even if an organization suffers a significant loss—is often a sound business decision, especially in the long term. In recent years, however, underwriters have become more amenable to removing this exclusion, provided insureds submit a summary of the organization's insurance program.

Fair Access to Insurance Requirements Plans are state-run insurance plans that make property insurance available to those who cannot obtain it in the voluntary market. The specifics of each plan vary from state to state.

The Fair Chance Act To Compete for Jobs Act of 2019 is legislation designed to ban federal agencies and federal contractors from asking applicants for employment to disclose their criminal histories before the federal agency makes the applicant a job offer. The Fair Chance Act is a federal extension of "ban-the-box" laws. There are three exceptions to the ban on requesting criminal history from a job applicant: (1) if consideration of criminal history record information prior to a conditional offer is required by law, (2) the position at issue would have access to classified information or have sensitive law enforcement or national security duties, or (3) the position is identified as excepted by the Administrator of General Services (or in the case of defense contracts, the Secretary of Defense/War).

The Fair Credit Reporting Act of 1970 is a federal act aiming to promote the fairness and accuracy of information contained in consumer reports, such as a credit report. It creates legal standards for the collection, use, and dissemination of consumer credit information. It also contains notice and opt-out provisions for the sharing of credit-related information between affiliates and for prescreened solicitation of consumers. The FCRA was amended by the Fair and Accurate Credit Transactions Act (FACTA) of 2003 (PL 108–159, 12/04/03). The FACTA requires the commission and other agencies to implement many of the new provisions of the FCRA by means of rules and regulations.

Fair Labor Standards Act of 1938 is a law that established a national hourly minimum wage and promulgated eligibility rules for overtime pay. The Wage and Hour Division of the US Department of Labor administers the law, and virtually all wage and hour claims cite a violation of the FLSA. Wage and hour claims allege that workers classified by employers as "exempt" (and, therefore, ineligible for overtime pay) are, in fact, entitled to overtime pay. Wage and hour claims are a serious exposure for employers; a number of class action wage and hour claims have settled for more than $10 million.

Fair rental value (FRV) coverage is provided as part of additional living expense (ALE) under a homeowners policy and as Coverage D under a dwelling policy. If the insured rents a home (or a part of a home) to a tenant and that home (or that part of a home) becomes uninhabitable due to damage from a covered peril, FRV coverage reimburses the insured for the lost rent. Any expenses that do not continue while the home (or that part of a home) is uninhabitable (e.g., electricity) are then subtracted from the fair rental value. The payment will be for the least amount of time necessary to repair or replace that home (or that part of a home) rented or held for rental to others.

Fair use is a legal concept, based on section 107 of the Copyright Act, that allows for limited use of copyrighted work for certain purposes (e.g., criticism, commentary, news, or education). Section 107 relies on four factors in judging fair use: (1) purpose and character of the use, (2) nature of the copyrighted work, (3) amount and substantiality of the portion used, and (4) effect of the use upon the potential market for or value of the copyrighted work. Fair use is particularly relevant in media professional liability, as use of copyrighted material that goes beyond fair use can result in increased liability exposures for insureds.

Faithful performance coverage is a crime insurance coverage that insures against loss of money, securities, or other property caused by the failure of an individual to faithfully execute their duties as required by law or by company bylaws. Although this coverage is required occasionally in the private sector, the majority of the time it is written for public entities on public officials.

False arrest is the act of detaining a person unlawfully on groundless accusations that the person has committed a crime. While charges of false arrest can be brought against governmental law enforcement officers, it is more commonly a tort committed by private security personnel or others charged with protecting the property of their employer or members of the public while on the employer's premises. False arrest is a personal injury (PI) offense insurable under general liability and other forms of liability insurance.

False pretense, trick, and device refers to an exclusion in the physical damage coverage portion of a garage coverage form eliminating coverage for losses the insured suffers due to the fraudulent acts of others. Examples of false pretense include a customer absconding with an automobile on the pretense of test-driving it or the insured selling an automobile and being instructed to deliver it to the wrong party because of fraudulent instructions. The exclusion can be negated by adding false pretense coverage on the garage liability policy. This endorsement covers the insured when a covered automobile is taken in a fraudulent manner. It also covers losses caused by the insured acquiring an automobile from someone who did not have legal title to the vehicle. Coverage is most needed by automobile dealers but may also be desired for banks that sell repossessed autos to the public.