Glossary

Nonconcurrency is the condition created by two or more policies covering the same loss exposure that do not have identical inception and expiration dates. Nonconcurrency of an insured's umbrella policies and the liability policies required by the umbrella as underlying insurance is a problem because the nonconcurrent policy terms make it possible for a loss under an underlying policy's annual aggregate limit to use up part of the limit required by the umbrella and thus violate its underlying limits requirement.

Nonconcurrency of coverage triggers occurs when the coverage trigger in a primary policy differs from that of an excess or umbrella policy. Typically, this takes place when an umbrella policy is written on a claims-made basis and a primary policy is written on an occurrence basis.

Noncontributing (noncontributory) insurance is issued on the basis that it will not seek contribution from other insurance policies that apply to a covered loss on the same basis (e.g., primary). Requests for additional insured status sometimes specify that it be provided on a noncontributing or noncontributory basis. The additional insured in such cases is seeking assurance that its own policy will not be asked to contribute to a covered loss.

Noncontributory insurance refers to a plan of insurance for which the employer pays the entire premium and the employee does not contribute to premium payment.

Noncontrolled foreign corporation is a company that is owned in such a way that its financial results are not consolidated with any of its shareholders, and the shareholders are not allocated any portion of the company's income for tax purposes. If the NCFC is located in a jurisdiction that does not have an income tax, this creates income tax deferral, meaning no tax until income is repatriated to its owners.

Noncorrelated risks are loss exposures that result from different, unrelated perils and hazards.

A nonderivative suit is a lawsuit alleging that the acts of directors and officers of a corporation caused damage to the individual(s) bringing the suit. This is in contrast to derivative suits, which are brought by one or more stockholders on behalf of the organization, alleging financial loss to the organization.

A nondisclosure agreement in an employment practices context a is a legal agreement between an employer and an employee that prohibits an employee from publicizing confidential and valuable information pertaining to the employer. In many cases in which such agreements are utilized, initial or continued employment is contingent on an employee's signing of the nondisclosure agreement. Effective periods of nondisclosure agreements commonly extend not only for the length of employment but also for a period of time after employment is terminated or otherwise ends. In some cases, nondisclosure agreements can be worded broadly enough so as to prevent disclosure of any kind of personnel decisions or personal conduct witnessed by an employee. Broad nondisclosure agreements of this sort, which could be interpreted as an enabling force for certain harassment or other inappropriate conduct-related exposures, may face additional scrutiny in the courts.

A nondisparagement clause is a type of clause frequently used in employment agreements (i.e., as part of a severance package), which requires that employees or former employees do not "disparage" their employer upon severing a working relationship. According to the legal definition of disparagement, this clause bars the parties from making false and/or injurious declarations that are derogatory in nature. Nondisparagement clauses are frequently worded so as to be unlimited in time, technically preventing one party from ever disparaging the other. Nondisparagement clauses may also be mutual, meaning both the employee and the employer are barred from disparaging the other. Such clauses have been subject to federal and state scrutiny and may not always be upheld in court.

Nonduplication of benefits is a provision in a health insurance or disability policy designed to eliminate the possibility of an insured receiving benefits greater than the economic loss suffered. Most long-term disability income policies offset the benefits paid in accordance with other benefits to which the disabled claimant is entitled. Similarly, most health insurance policies contain provisions to avoid duplication of benefits when more than one policy applies.