Glossary

Kenney ratio is a rule of thumb developed by Roger Kenney that sets a 2-to-1 target ratio of gross premiums written to policyholder surplus. This applies to insurers that write strictly property insurance. For companies that also write liability insurance, the ratio is 3 to 1. Such ratios provide a measure of an insurer's financial stability and solvency.

The Keogh Act plan is a part of the Self-Employed Individuals Tax Retirement Act that enables self-employed individuals to take advantage of formal retirement plans and tax advantages similar to those available for corporate pension plans, which also qualify under the Act.

Key employee insurance is insurance whose purpose is to indemnify a business for the loss of earnings brought about by the death of a key officer or other employee. It is life and/or disability insurance on one (or more) key person(s) whose loss or unavailability may cause loss of profit, loss of goodwill, or an increase in expenses. This type of insurance helps finance the search and training of a successor or compensate for a reduction in profits.

Key person life insurance refers to a plan to provide benefits for the company should a key employee die. It can be owned by the company, and the company can be the beneficiary. In other cases, where there is a desire to provide a benefit for the employee, the death benefit can be split to include an amount for the company and an amount to benefit the surviving family members. Tax considerations are important here and should be considered by a tax professional.

A key stop, as used in motor carrier/trucking terminology, is when a motor carrier/trucker has a key to a business's premises that allows entry when premises are closed or access is needed after normal business hours to unload arriving cargo destined for the business. A liability exposure exists in that the key can be lost, misplaced, or misused, or premises may not be secured properly after cargo delivery.

Kidnap and ransom (K&R) insurance is specialty crime coverage that insures against loss by the surrender of property as a result of a threat of harm to the named insured, an employee, or a relative or guest of the insured or the insured's employees. Available under an Insurance Services Office, Inc. (ISO), Kidnap/Ransom Coverage Form (CR 00 40) or Kidnap/Ransom and Extortion Policy stand-alone form (CR 00 41).

Knock-for-knock is a form of indemnity that is used in energy industry contracts. Knock-for-knock indemnity is reciprocal in nature and is based on ownership of property and personnel as opposed to allocating risk based on fault. Each party to an oil and gas contract agrees to take responsibility for and to indemnify the other party against injury and loss to its own property and personnel.

A known loss provision describes language commonly included in the insuring agreement of a liability policy that stipulates that the policy does not apply to losses of which the insured was aware prior to the policy period. In some policies, this restriction appears in the exclusions section of the policy. Some policies go a step further, stipulating that where the insurer has issued successive policies, the only policy that will apply is the one in force when the insured first becomes aware of the loss. The difference in these two types of provisions is most dramatic when progressive injury or damage goes undetected over multiple policy periods.

The known loss rule is the principle of insurance practice that states that coverage may not be obtained against a loss that has already occurred and that is known to the person seeking to obtain the coverage.

A Kotecki waiver affects employers' immunity to work-related injury claims. In some states, third parties held liable for a work-related injury may seek contribution from the injured worker's employer, but such contribution may be capped by the amount of applicable workers compensation benefits. This cap is named for an Illinois case— Kotecki v. Cyclops Welding Corp., 146 Ill. 2d 155, 166 Ill. Dec. 1, 585 N.E.2d 1023 (1991)—that first imposed it. If the employer has indemnified the negligent third party, that indemnity agreement may be viewed in certain jurisdictions as a waiver of the Kotecki cap.