Glossary

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.

Noneconomic damages are damages awarded to an injured person that are not based on actual monetary loss but on other forms of injury—for example, pain and suffering awards.

A nonengagement letter is a letter written by an attorney to an individual who has had a conference with the attorney stating that the conference did not produce an agreement to represent the individual in a given case or matter. Attorneys sometimes write nonengagement letters following an initial conference because there have been cases in which individuals have sued lawyers for failure to represent their interests following such conferences. This is despite the fact that a formal attorney-client relationship never existed. The purpose of the letter is to indicate that the conference was only to explore the basic facts of a case, but that at the end of the conference, it was agreed by both parties that the attorney would not represent the individual.

A nonfiled line of coverage is one for which state insurance regulators in many states do not require insurers to submit their coverage forms and rates for approval. Many types of inland marine coverage, including builders risk and contractors equipment coverage, are nonfiled lines of coverage. The exposures addressed by the nonfiled coverage lines generally are considered too unique or diverse to reasonably require insurers to insure them on other than a case-by-case basis.

Nonfinancial foreign entity is a defined term in Foreign Account Tax Compliance Act (FATCA) legislation, used to denote any foreign entity that is not a financial institution.

The nonforfeiture loan value benefit is a life insurance nonforfeiture benefit option to use the cash surrender value of the policy as collateral for a loan by the insurance company to the policyholder.

The nonforfeiture reduced paid-up benefit is a life insurance policy nonforfeiture benefit option to use the cash surrender value of the policy to purchase a fully paid-up life permanent insurance policy for a lesser amount of coverage. The new policy coverage amount is based on the insured's age and the policy cash surrender value.

In whole life insurance policies, nonforfeiture values are benefits that accrue to the insured when the policy lapses from nonpayment of premium. These benefits are usually either an amount of paid-up term life insurance or a cash surrender value. All states have enacted nonforfeiture laws that require that whole life insurance policies specify the nonforfeiture values in a schedule in the policy.