Insurance Definitions Used Within The Food Industry

ACTUAL CASH VALUE (ACV): The cost of replacing or restoring property at prices prevailing at the time and place of the loss, less depreciation, however caused. Another definition: the sum of money required to replace Food Trailer less depreciation, which includes physical wear and tear, and obsolescence.

ADDITIONAL INSURED: One who is protected by an insurance policy other than the named insured. Most Food Trailer lot owners and events will require you to list them as an additional insured. See our blog here for more information.

BINDER: A written or oral contract issued temporarily to place insurance in force when it is not possible to issue a new policy or endorse the existing policy immediately. A binder is subject to the premium and all the terms of the policy to be issued.

BODILY INJURY COVERAGE: This coverage, often called “public liability insurance”, protects an insured against legal liability for injury to the person of another arising from an accident.

Products and Completed Operations Coverage: Coverage for liability arising out of the insured’s products or business operations conducted. For food trailers, this is the food you serve.

CARRIER: The insurance company or the one who agrees to pay the losses. The carrier may be organized as a company, stock, mutual, or reciprocal, or as an association of underwriters such as Lloyds.

COINSURANCE PROVISION: An insurance provision for Food Trailer coverage in which the policy holder must carry an amount of insurance that is at least equal to a set percentage of the value of the Food Trailer in order to receive full payment of a loss.

COLLISION COVERAGE: Covers loss to the insured person’s Food Trailer caused by its collision with another vehicle or object.

COMPREHENSIVE COVERAGE (physical damage other than collision): Pays for damage to or loss of your Food Trailer from causes other than accidents. These include hail, vandalism, flood, fire, and theft.

CONTENTS: A term used to refer to the business personal property of a Food Trailer contained in a building or within a food trailer.

DECLARATIONS PAGE: The page in a policy that shows the name and address of the insurer, the period of time a policy is in force, the amount of the premium, and the amount of coverage.

DEDUCTIBLE: The amount an insured person must pay before the insurance company pays the remainder of each covered loss, up to the policy limits.

DEPRECIATION: A decrease in the value of property over a period of time due to wear and tear or obsolescence. Depreciation is used to determine the actual cash value of property at time of loss. (See ACTUAL CASH VALUE.)

ENDORSEMENT: A written agreement attached to a policy expanding or limiting the benefits otherwise payable under the policy. Also called a “rider.”

EXCESS LIABILITY POLICY: A policy that provides additional limits in excess of an underlying liability policy.

EXCLUSIONS: Items or conditions that are not covered by the general insurance contract.

GENERAL LIABILITY: A broad term meaning liability insurance, other than automobile, written to cover personal, professional and commercial risks. In respect to commercial liability, it protects business owners and operators from exposures such as liability arising from accidents resulting from the insured’s premises or operations; products sold by the insured; operations completed by the insured, and contractual liability.

GROSS VEHICLE WEIGHT (GVW): The weight specified by a manufacturer for the maximum total loaded weight of a single vehicle.

LAPSE: The termination or discontinuance of a policy due to non-payment of a premium.

MEDICAL PAYMENTS: A general liability coverage that reimburses others, without regard to the insured’s liability, for medical or funeral expenses incurred by such persons as a result of bodily injury or death sustained by accident.

NON-OWNED AUTOMOBILE LIABILITY: coverage for autos that are used in connection with the named insured’s food trailer business but are neither owned, leased, hired, rented or borrowed by the named insured. The term specifically applies to vehicles owned by employees and used for company business. Coverage applies to liability only, not physical damage to non-owned vehicles.

OCCURRENCE: An event that results in an insured loss. In some lines of business, such as liability, an occurrence is distinguished from an accident in that the loss doesn’t have to be sudden and fortuitous and can result from continuous or repeated exposure which results in bodily injury or property damage neither expected nor intended by the insured.

PERSONAL INJURY: A General Liability coverage for insurable offenses that cause harm, other than bodily injury, such as false arrest, detention or imprisonment, malicious prosecution, wrongful eviction, slander, libel and invasion of privacy.

PERSONAL PROPERTY: This type of property is usually movable and easily transportable. On the other hand, real property generally is considered to be immovable such as land and things affixed to it. A rule of thumb definition for personal property is “everything other than real property.”

PROPERTY DAMAGE: In the general liability policy, a physical injury to property.

PROPERTY INSURANCE: Insurance for real and personal property against physical loss or damage.

PRO RATA CANCELLATION: The cancellation of an insurance policy with the return premium being the full proportion of premium for the unexpired term of the policy, without penalty for early cancellation.

REINSTATEMENT: Putting a lapsed policy back in force by producing satisfactory evidence of insurability and paying any past-due premiums required.

RETURN PREMIUM: A portion of the premium returned to a policy owner as a result of cancellation, rate adjustment, or a calculation that an advance premium was in excess of the actual premium.

SHORT TERM CANCELLATION: Cancellation of an insurance policy prior to the expiration date in

TOTAL LOSS: A loss of sufficient size about which it can be said there is no value left. The complete destruction of a Food Trailer. The term also is used to mean a loss requiring the maximum amount a policy will pay.