Glossary

The Longshore and Harbor Workers' Compensation Act of 1927 (LHWCA) is a federal law that provides no-fault workers compensation benefits to employees other than masters or crew members of a vessel injured in maritime employment—generally, in loading, unloading, repairing, or building a vessel. Employers can obtain coverage under a standard workers compensation policy by purchasing an LHWCA coverage endorsement.

Lookback windows are windows of time in which victims of sexual abuse may sue for damages regardless of how long ago the alleged abuse took place and are established by state law. Lookback windows can aid victims in avoiding statute of limitations restrictions that may have otherwise prevented such lawsuits. A number of states have established lookback windows, allowing potentially thousands of victims to file lawsuits (many against clergy members and religious institutions).

A loss is the basis of a claim for damages under the terms of a policy. It can also be considered a loss of assets resulting from a pure risk. Broadly categorized, the types of losses of concern to risk managers include personnel loss, property loss, time element loss, and legal liability loss.

Losses incurred are the total amount of losses sustained during a given time period that are paid and unpaid but reserved.

Losses in excess of policy limits is an expression used in reinsurance agreements that refers to damages awarded by a court against an insurer in favor of the insured, due to the insurer's having failed to settle a third-party claim against the insured within the policy limits by reason of bad faith, fraud, or gross negligence.

Loss adjustment expense (LAE) is the cost of investigating and adjusting losses. LAEs need not be allocated to a particular claim. If they are allocated to a particular claim, they are called "allocated loss adjustment expenses" (ALAE); otherwise, they are unallocated loss adjustment expenses (ULAE).

Loss assessment is a property owner's share of a loss to property owned in common by all members of a property owners association. Homeowners policies and condominium unit owners policies typically provide a small amount of coverage for such assessments, with additional amounts available by endorsement for an additional premium.

Loss carryforward is a provision in the income tax code that allows a taxpayer to spread a loss over more than 1 tax year.

The loss constant is a flat amount added to the premium of a workers compensation policy (after experience rating, if applicable) on accounts with premiums of less than $500. It is designed to offset worse-than-average loss experience of the smaller insureds.

Loss control is a risk management technique that seeks to reduce the possibility that a loss will occur and/or reduce the severity of those that do occur. Driver training programs are loss control programs that seek to reduce the likelihood of accidents occurring. Sprinkler systems are loss control devices that reduce the severity of loss by fire.