Glossary

Individual risk premium modification refers to the sum of judgment rating factors (debits or credits) assigned to distinguish the insured's characteristics from the average insured in its class, which are not already recognized in the rating process. The judgment rating factor is applied to the premium to develop the modified premium. Examples include the insured's safety program, financial condition, and overall management attributes.

Industrial health insurance refers to a low face limit health insurance policy where the premium is collected by the salesperson directly at the home of the insured on a weekly or monthly basis.

Industrial hygiene control is a theory of accident causation and control that suggests that dangerous physical conditions cause injuries and illnesses at the workplace more than any unsafe employee action. This theory, developed by industrial hygienists and safety engineers, espouses various methods to control such accidents and illnesses. Methods include utilizing less harmful materials, developing wet methods to reduce harmful dust, establishing excellent housekeeping and maintenance procedures, and reducing worker contact with harmful materials and/or processes.

An industrial insured is a commercial insurance buyer presumed by virtue of its financial size to be able to negotiate insurance contracts with insurers without the protection of insurance regulators. Restrictions may apply on the ability of the insured to recover from a state's guaranty funds. Under some state insurance laws, an industrial insured must meet size criteria (net worth and number of employees) to be eligible to purchase nonadmitted insurance.

An industrial insured captive insurance company is any company that insures risks of the industrial insureds that comprise the industrial insured group and their affiliated companies.

An industrial insured group is a group of commercial insureds in the same industry or involved in the same risk-taking activity.

The inflation factor is the loading factor providing for future increases in either the cost of losses or the size of exposure bases (e.g., payroll or sales) resulting from inflation. It may be applied to historical data of any kind to convert historical data into more current data when making projections.

An inflation guard provision gradually and continuously increases the limit of insurance by a specified percentage over a specified time period (such as 3 percent every 3 months).

Informal retention is an organization's payment of uninsured losses out of cash flow or current assets as normal business expenses. This contrasts with funded retention, in which the organization sets funds aside in advance to pay for retained losses.

Information security and privacy liability coverage is an insuring agreement contained within policies written to cover claims caused by data breaches. Such policies are most often termed "cyber and privacy insurance," "information security and privacy insurance," or "cyber-security insurance." This insuring agreement covers the insured's liability for damages resulting from a data breach. Such liability most often results from (1) loss, theft, or unauthorized disclosure of personally identifiable information (PII) in the insured's care, custody, and control, (2) damage to data stored in the insured's computer systems belonging to a third party, (3) transmission of malicious code or denial of service to a third party's computer system, (4) failure to timely disclose a data breach, (5) failure of the insured to comply with its own privacy policy prohibiting disclosure or sharing of PII, and (6) failure to administer an identity theft program required by governmental regulation or to take necessary actions to prevent identity theft. In addition, this insuring agreement covers the cost of defending claims associated with each of these circumstances. The information security and privacy liability insuring agreement is the true liability coverage component of a cyber and privacy insurance policy because it pays actual liability losses sustained from claims made against the insured by various parties. In contrast, the privacy notification and crisis management expense coverage that the insuring agreement addresses is the so-called immediate response costs associated with a data breach, making payments on a "no fault" basis and without admission of liability. Similar to other cyber and privacy insurance policies, information security and privacy liability coverage is subject to an annual aggregate limit and an annual aggregate deductible.