Glossary

Limits under multiple policy years is an approach to structuring limits for insurance programs covering low-frequency but high-potential-severity exposures, such as excess liability (over commercial general liability (CGL) policies), pollution liability, and directors and officers (D&O) liability.

The limit of insurance is the most that will be paid by the insurer in the event of a covered loss under an insurance policy.

LIMRA International, Inc. (LIMRA), is an international association headquartered in Windsor, Connecticut, that conducts market, consumer, economic, financial, manpower, and human resources research for life insurance and financial services companies.

A line is (1) a class of insurance, such as property, marine, or liability, or (2) in reinsurance, an amount of risk retained by a ceding insurer for its own account.

A line of business is a general classification of insurance industry business—for example, fire, life, health, liability.

A line sheet is a schedule showing the maximum limit of liability that can be written by an insurer for different classes of risks; also called a "line guide."

Liquidated damages refers to a stipulated amount as agreed upon in a contract.

Liquidity is a measurement of an organization's ability to meet its debt obligations, particularly short-term debt.

Liquidity is a measurement of key financial variables that impact an insurer's ability to pay claims.

Liquidity risk refers to the exposure to adverse cost or return variation stemming from the lack of marketability of a financial instrument at prices in line with recent sales.