Glossary

A notary claim exclusion is an exclusion found in professional liability policies written for attorneys, insurance agents and brokers, and accountants. The exclusion precludes coverage for claims that arise when an insured notarizes a document without having actually witnessed the signature. (People sometimes convince notaries to notarize a signature, despite the fact that the person signing the document did not actually appear before the notary.) The rationale for the exclusion is that such situations often facilitate forgeries, as well as the fact that claims resulting from such circumstances are entirely preventable by an insured.

Notice of cancellation clauses are provisions in policies mandating that insurers are to provide advance notice of cancellation or nonrenewal of a policy. Most commonly, the required cancellation notice period is 30 days, although state amendatory endorsements frequently extend this period to 60 days. Additionally, most policies require that the insurer provide advance notice of nonrenewal with the notice requirement ranging from 10 to 75 days depending on jurisdiction and circumstances surrounding the nonrenewal.

A notice of cancellation endorsement modifies an insurance policy to provide notice of cancellation beyond that stipulated in the policy. The endorsement typically stipulates an additional number of days' notice the insurer must provide of its intent to cancel the policy, additional parties that are to receive notice of cancellation, or both. Additional insureds, for example, sometimes request a notice of cancellation endorsement guaranteeing them a right to notice of cancellation. Insurers vary regarding their willingness to expand their notice of cancellation obligations.

The notice of circumstances during extended reporting period provision refers to a provision found within an extended reporting period (ERP) endorsement of a claims-made liability policy. Such provisions state that in addition to covering claims reported to the insurer during the ERP, the policy also covers "incidents" or "circumstances" reported to the insurer that have the potential to produce a claim in the future. About half of all ERP provisions are written on this basis, which is favorable for an insured because regardless of how far in the future a claim is made against the insured in conjunction with a reported "incident" or "circumstance," coverage will apply under the ERP.

A notice of claim provision in a liability insurance policy requires the insured to promptly notify the insurer in the event that a claim is made against the insured.

Notice of occurrence is one of the insured's specified duties under a general liability policy. Notice to the insurer of an occurrence must include the time, place, and circumstances of the occurrence, a description of any resulting injury or damage, and the names and addresses of injured persons and witnesses.

Notice to the company is written notice to the insurer as to an occurrence upon which a claim is to be based.

Novation refers to an agreement to replace one party to an insurance policy or reinsurance agreement with another company from inception of the coverage period. The novated contract replaces the original policy or agreement.

No further remedial action planned is a determination made by the Environmental Protection Agency (EPA) following a preliminary assessment that a site does not pose a significant risk and so requires no further activity under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

Nuclear, biological, chemical (NBC) weapons disperse biological, chemical, or radioactive agents to inflict injury or cause contamination or damage. A dirty bomb using a conventional explosion to disperse radioactive contaminants would be included under the first category, as would a nuclear device that relies on nuclear fission to generate an explosion. Examples of biological agents would include anthrax and smallpox. Examples of chemical agents would include mustard gas, ricin, VX, and sarin gas. Due to the truly catastrophic exposure they pose, insurers generally exclude coverage for NBC perils—or seek a substantially higher premium to cover them—even when covering other acts of terrorism.