Glossary

Multiplied damages are damages awarded based on a statutory directive. For example, the Clayton Act (a law that prohibits agreements between companies to fix or control prices for the purpose of lessening competition) provides for treble damages in the event of an antitrust violation. Therefore, if a jury awarded $1 million in compensatory damages for violating the Clayton Act, the multiplied damages would be an additional $2 million, resulting in a total award of $3 million. Multiplied damages, although similar in nature and intent to punitive damages, are not always treated in the same manner when determining coverage within a liability policy.

Mutualization is the process of converting a stock insurer into a mutual insurer.

Mutual additional insured status arises when parties agree to name each other as insureds on their respective insurance policies, with the intent that each party (the named insured) provide primary coverage to the other (as an additional insured) for damages arising out of the named insured's negligence.

A mutual benefit association is an organization offering benefits to members for no fixed premiums, but assessments are levied to meet specific losses as they occur.

A mutual company is an insurance company that is owned by its insureds. This is as opposed to a stock insurance company, which is owned by stockholders who are not necessarily insureds. Every owner of a mutual insurer is an insured; every insured is an owner.

A mutual fund is an investment company that raises capital by selling its own stock and then buying other securities as an investment with the proceeds generated.

A mutual law enforcement agreement is a formal agreement between neighboring municipalities to provide law enforcement assistance in emergency situations when a local police department requires additional personnel. Frequently, such agreements contain hold harmless provisions. Although law enforcement liability policies normally exclude contractual assumptions of liability, the policies typically contain exceptions to such exclusions so that liability assumed under mutual law enforcement agreements is usually covered.