Insurance is an exacting language. Buyers and especially the courts have an annoying tendency to assign real meaning to the words used by insurance professionals. Accordingly, there are at least seven terms that insurance pros should absolutely throw in whenever they are discussing insurance.
1. All risk: Judges have ruled that “all risk” actually means that whatever happens to the property is covered under the insurance policy. But don’t worry about it — insureds know what it’s really all about, right?
2. Absolute pollution exclusion: Some people think this term should not be used simply because the exclusion is, in fact, not absolute. The problem is that the industry actually believes it is what it claims it is — absolute.
3. Risk manager: Agents like to use this term a lot, as in, “We want to act as your risk manager.” No, you really don’t. But it will sound impressive to a client.
4. Enterprise Risk Management: ERM sounds big and impressive. It doesn’t matter that it’s impossible to accomplish. Everyone is using the term so go ahead.
5. Workman’s compensation: The politically correct crowd gets really upset over this one. The exclusion of women in this term really causes angst — like women ever get hurt on the job.
6. Guaranteed replacement cost: Customers love guarantees. It appears to mean that no matter what happens to a house or building, the insured will get a whole new building — regardless of how much it costs to rebuild. No problem here.
7. Comprehensive general liability: It ain’t been that in years, even though the request can still be found in contracts. Judges have had the same problem with “comprehensive” as they did with “all risk.”
To guarantee you are seen as an expert by clients and peers, be sure to pepper your talk with these terms — you’ll go far.
Boggs is the all risk manager at the Absolute Academy of Insurance and Enterprise Risk Management.
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