Glossary

Money orders and counterfeit paper currency insurance covers loss due to acceptance of a money order that was issued (or is purported to have been issued) by a post office or express company and loss due to acceptance of counterfeit paper currency of the United States or Canada.

Monoline refers to an arrangement with a single line of coverage; common with surety or financial guarantee insurance.

Monopolistic state funds are jurisdictions where an employer must obtain workers compensation insurance from a compulsory state fund or qualify as a self-insurer (as is allowed in two of the jurisdictions). Such insurance is not subject to any of the procedures or programs of the National Council on Compensation Insurance (NCCI). Instead, each jurisdiction has its own rules and regulations that govern the placement and administration of workers compensation insurance. The following states/jurisdictions are monopolistic fund states: North Dakota, Ohio, Washington, Wyoming, Puerto Rico, and the US Virgin Islands.

Monte Carlo simulation is one important technique that has emerged as crucial to effective risk modeling. MCS is a quantitative technique that examines a wide range of possible outcomes by calculating many different scenarios automatically. It was first developed in World War II by scientists developing the atomic bomb. Since its inception, MCS has been utilized across a variety of industries, such as finance, insurance, health care, oil and gas, renewable energy, pharmaceuticals, and manufacturing.

The Montrose doctrine is a legal principle, enunciated by the California Supreme Court in Montrose Chem. Corp. v. Admiral Ins. Co., 10 Cal. 4th 645, 42 Cal. Rptr. 2d 324, 913 P.2d 878 (1995). The ruling held that injury or damage for which an insured may incur liability is not a "known loss"—hence uninsurable under basic precepts of insurance law—until liability for the injury or damage has been assessed by a court. As a result of Montrose, standard general liability policies now exclude liability from any injury or damage known to the insured at the time the policy takes effect.

Montrose provision refers to the provision in a general liability policy that restricts coverage for damage that occurs over multiple policy periods to those policies in which the insured was not aware of the occurrence at the inception of the policy period. The term "Montrose provision" is derived from the 1995 California Supreme Court ruling— Montrose Chem. Corp. v. Admiral Ins. Co., 10 Cal. 4th 645, 42 Cal. Rptr. 2d 324, 913 P.2d 878 (1995)—that allowed recovery for damages even after the insured was aware of the loss, because the full extent of the loss was not yet known.

Moonlighting coverage refers to an endorsement available under professional liability policies, nearly always in police professional/law enforcement policies. Moonlighting endorsements cover insureds for their liability in connection with off-duty law enforcement activities. Coverage is available in recognition of the fact that it is not uncommon for law enforcement officers to hold second jobs.

Morale hazard is an increase the probable frequency or severity of loss due to an insured peril that arises from an indifference on the part of the insured to the loss occurring. Most often this indifference is caused by the mere fact that insurance will cover the loss. Morale hazard, as contrasted with moral hazard, does not reflect on the character or integrity of the insured but on the insured's attitude. For example, an insured that would not intentionally set fire to its vacant building would not be as motivated to protect the building from fire if insurance would exist to cover the loss.

Moral hazard is an increase in the probable frequency or severity of loss due to an insured peril that arises from the character or circumstances of the insured. Moral hazard is measured by the character of the insured and the circumstances surrounding the subject of the insurance, especially the extent of potential loss or gain to the insured in case of loss. For example, insurance on a thriving business is not subject to a moral hazard to as great an extent as insurance on an unprofitable business. On the other hand, an insured with high moral standards may pose less of a moral hazard even with an unprofitable business than an insured with low moral standards. Moral hazards are considered when underwriting insurance, particularly fire insurance, and are addressed by certain policy exclusions. For example, underwriters are hesitant to insure vacant and unoccupied buildings because of the possibility that an insured will be tempted to intentionally start a fire to obtain an insurance recovery.

Morbidity is the relative incidence of disease.