Glossary

Last in, first out is an accounting method for inventory and cost of sales in which the last items produced or purchased are assumed to be sold first.

A latent defect is one that is concealed or inactive and cannot be discovered by ordinary examination. Damage from a latent defect is typically excluded from coverage under all risks property insurance policies. For example, a homeowner discovers that their roof is decaying because the shingles were treated improperly with fire-retardant chemicals. The cost to replace those shingles is precluded due to the "latent defect" exclusion. However, if a fire were to ensue, the exclusion would not prevent coverage for the damage from the fire.

A lateral hire is an attorney who enters the law firm, typically from another law firm, at the same level as they were in their old firm. For example, attorney X, who was an associate at one law firm, joins another firm as an associate.

Laundry listing is the reporting of all possible claims (or incidents that could later produce claims) to an insurer under a claims-made policy that is about to expire, be canceled, or be nonrenewed. Laundry listing is sometimes done because discovery provisions under claims-made policies state that if an "incident" is reported to an insurer (that later gives rise to a claim against an insured), coverage will apply regardless of how far in the future the claim is made. Laundry listing poses certain drawbacks for insureds, including higher premiums in renewal policies based on an underwriter's perception of increased future claim frequency, an insurer's refusal to renew coverage given potential claims, difficulty in replacing a policy with a new insurer, and creation of a discoverable record indicating an insured's concern about its liability associated with a specific incident.

Lawyers professional liability coverage provides attorneys with liability coverage for financial loss suffered by third parties arising from acts, errors, and omissions in providing professional legal services. Fraud, intentional and criminal acts, bodily injury (BI), and property damage (PD) are excluded from coverage. However, most of the policies provide coverage for personal injury (PI) perils (i.e., defamation, invasion of privacy) since allegations of such acts occur frequently in the legal arena. As is the case with most professional liability forms, lawyers professional liability policies are written with a claims-made coverage trigger. Lawyers professional liability coverage is also available in many states through bar-sponsored captive insurers in addition to commercial insurers.

A law clerk is someone who is either in law school and an intern at a law firm or a law school graduate awaiting bar results and employed by a law firm. A law clerk might also provide assistance to a judge or magistrate.

Law enforcement officers liablity provides errors and omissions (E&O) coverage for police departments. Unlike most professional liability coverage, such policies are often written on an occurrence (rather than on a claims-made) basis. Some of the more important covered acts include false arrest, excessive force, and invasion of privacy. This coverage can sometimes be provided on a limited basis in the general liability policy but must usually be purchased separately. Common exclusions are criminal/intentional acts, claims for injunctive relief, and motor vehicle operations.

The law of large numbers is a statistical axiom that states that the larger the number of exposure units independently exposed to loss, the greater the probability that actual loss experience will equal expected loss experience. In other words, the credibility of data increases with the size of the data pool under consideration.

Lay-up occurs when a vessel is moored in a protected anchorage with its operating systems shut down and safeguards in place to ensure that the vessel is protected from deterioration and corrosion. A vessel is normally laid up when it is unprofitable for the owner to operate it.

A lay-up warranty is a provision in yacht policies that stipulates periods of time when the yacht will be laid up in port and not in operation.