Trucking Terms Glossary

We understand how difficult it can be keeping up with many trucking industry terms for procedures, equipment and specific sectors. Please use the Trucking Terms Glossary below as reference anytime you may need it.

Commercial Trucking Terms Glossary


Abbreviation for Association of American Railroads.

Ad Valorem Tax

A charge levied on persons or organizations based on the value of transaction. It is normally a given percentage of the price of the retail or manufacturing stage and is a common form of sales tax; e.g. Federal excise tax on new trucks and trailers

Adapter, Cam & Groove

The male portion of a quick coupling device for pipe or hose ends.

Adapter, APR

A spring loaded shut-off valve mounted on the tank trailer designed to mate with the terminal loading device. API RP 1004 specifies dimensions for these adapters.

Adapter, Openable Bottom Loading

A bottom loading adapter that is capable of being used to unload a product.


A device for adding diffused air into the tank for the purpose of aiding the flow of dry product during unloading.


Abbreviation for American Petroleum Institute.

Appurtenance, Cargo Tank

See 49 CFR 178.345-1 (c).


Abbreviation for American Society of Mechanical Engineers.


Refers to a load of freight which permits a trucker to return to his home with a loaded truck, rather than an empty one.


See 49 CFR 178.345-1 (c).

Baffle, Dished

A baffle with a concave/convex surface.

Barrel, Tank

Vessel weldment – shell and heads.

Bill of Lading

An itemized list of goods contained in a shipment


Preparation of the freight bill, the primary document for a common carrier shipment including a description of the freight, number of pieces and charges


An auxiliary axle assembly having a fifth wheel used for purpose of converting a semitrailer to a full trailer. Dollies can be used to haul multiple trailers behind a single power unit. (Also referred to as dolly)


A device to deliver a volume of air at a certain pressure for use in unloading pneumatic tanks.

Break Bulk

To separate a composite load into individual shipments and route to different destinations

Break Bulk Terminal

A terminal designed to act as an intermediate sorting point for interregional freight. Freight from various end-of-line terminals is sent to a regional break bulk terminal to be combined into full trailers that the carrier then routes to a subsequent end-of-line terminals. Example: freight destined for Texas from a Binghamton, NY terminal might go to Stroudsburg, PA to be combined with other freight destined for Texas from other Eastern cities.

Brake Interlock, Parking

A system that applies the parking brakes upon actuation of an air interlock valve. This valve is typically actuated during the loading or unloading operation.

Bulkhead, Dished

A bulkhead with a concave/convex surface.

Bulkhead, Double

Two adjacent bulkheads forming a void space. Typically found when the bulkhead of one tank is next to the bulkhead of another tank. The area between the bulkheads typically forms a void.

Bulkhead, Flangeless Tank

An internal bulkhead that is formed with neither a knuckle radius or straight flange.

Bulkhead, Tank

See 49 CFR 178.345-1 (c) and 49 CFR 393.86.


Gas or liquid fueled burner for heating product in the tank.

Cap, Dust

Cover which mates with a male adapter.

Cap, Pipe

A cap which mates with the male threads of a pipe and which forms a liquidtight seal.

Capacity, Commodity

Total internal volume that does not include planned outage.

Capacity, Nominal

That compartmental volume to which a vessel is designed that does not include the planned stage.

Capacity, Shell

The absolute full capacity of a tank shell.


Single shipment of freight required to fill a rail car

Certification, Design

See 49 CFR 178.320 (a).

Certificate Holder

See Holder, Certificate


Acronym for Code of Federal Regulations.

Christmas Tree

See Vent.


(a) A demand made upon a transportation company for payment, due to loss or damage of freight alleged to have occurred while shipment was in possession of carrier.
(b) A demand upon a transportation company for refund of an overcharges from the erroneous application of rates, weights, and assessment of freight charges

Class I Motor Carriers *

Common or contract motor carriers of property that have average gross operating revenues of $5,000,000 or more annually from motor carrier operations

Class II Motor Carriers *

Common or contract motor carriers of property that have average gross operating revenues of $1,000,000 or more , but under $5,000,000 annually from motor carrier operations

Class III Motor Carriers *

Common or contract motor carriers of property that have average gross operating revenues of less than $1,000,000 annually from motor carrier operations

Class I Truck

Truck with gross vehicle weight (GVW) of 6,000 lbs or less

Class II Truck

Truck with gross vehicle weight (GVW) of 6,001-10,000 lbs

Class III Truck

Truck with gross vehicle weight (GVW) of 10,001-14,000 lbs

Class IV Truck

Truck with gross vehicle weight (GVW) of 14,001-16,000 lbs

Class V Truck

Truck with gross vehicle weight (GVW) of 16,001-19,500 lbs

Class VI Truck

Truck with gross vehicle weight (GVW) of 19,501-26,000 lbs

Class VII Truck

Truck with gross vehicle weight (GVW) of 26,001-33,000 lbs

Class VIII Truck

Truck with gross vehicle weight (GVW) of 33,001-10,000 or more lbs


Container on (rail) flat car. A form of intermodal movement of freight using a box suitable for use on rail cars, trailer frames, and container ships Containers come in many sizes. International containers which are used on ships usually have height and width of eight feet. Length can vary, but 20 and 40 foot lengths are the most common. US domestic containers are generally taller than international containers and may not always be suitable for ocean transportation.

Combination Vehicle

An equipment configuration which includes separate power unit (tractor) and at least one trailer

Commercial Trailer

A trailer used to handle freight in the transportation of goods for others; excludes house trailers, light farm trailers and car trailers


Any article of commerce. Goods shipped

Common Carrier *

A transportation business that offers service to the general public. Interstate common carriers must hold a franchise issued by the ICC which limits service to a specific geographical area. Recent changes in regulation have blurred the distinction between common, private, and contract carriers. Term may be meaningless in the near future.

Competitive Rate *

A charge established to meet the competition of another transportation line

Connecting Carrier

A carrier which interchanges trailers with another for completion of shipments.

Contract Carrier *

For hire carriers which proved transportation under specific contracts or agreements that do not fall within the legal boundaries of common carriage. Recent changes in regulation have blurred the distinction between common, private, and contract carriers. Term may be meaningless in the near future.

Cock, Shut-Off

A device used to restrict or stop flow of air or liquid.

Compartment, Tank

The product carrying space of a tank motor vehicle. A cargo tank motor vehicle may have one or more such spaces. (See Tank, Cargo)

Compartment, Void

See Void Compartment.

Connection, Air

Fitting used to apply air pressure from source to vessel.

Connection, Loading/Unloading

See 49 CFR 178.345-1 (c).

Coupling, Pipe

See 49 CFR 178.345-1 (c).

Coupler, Cam & Groove

The female portion of a quick coupling device for pipe or hose ends.


Hundred weight, or one hundred pounds

Dam, Manhole

See Manhole, Dam


A device placed inside a tank to change the flow direction during loading or unloading.


To purge compartments, voids, piping and components of dangerous vapors rendering the cargo tank safe for both hot and cold work.

Dip Stick

A separate measuring device used to determine the level of product in a tank.

Dip Tube

(1) A piping arrangement installed in a tank which will be pressure unloaded out of the top. (2) May also be a tube installed in a pressurized containers to gage the level of liquid.


Abbreviation for Department of Transportation.

DOT Specification

See Specification, MC/DOT.

Doubler Plate

A reinforcing pad, ring, collar or strap used to reinforce the shell or head.


A hole, pipe of hose used to gravity discharge liquid from an enclosed area such as a void, void compartment or manhole dam.

Drain, Flashing

See Flashing Drain

Emergency Valve

See Valve, Emergency

Engineer, Design Certifying

See 49 CFR 171.8.

Fill Cover, Spring Loaded

A fill cover designed to meet the requirements for the pressure-actuated vent in MC 306 cargo tanks, 49 Code of Federal Regulations, 178.341-4 (d) (2) and DOT 406 cargo tanks, 49 Code of Federal Regulations, 178.346-10 (d).

Fill Opening

An opening in top of a tank used for filling the tank. Usually incorporated in Manhole Cover. It may also be used for inspection.

Fire Tube

See Heating Tube.

Fitting, Clean Out

Fitting installed in the top of a tank to facilitate washing of the tank interior.

Fitting Guard

A structure to protect pipe fittings from damage.

Fitting, Terminal

The end fitting on a line.


See 49 CFR 178.345-1 (c).

Flange, Companion

See 49 CFR 178.345-1 (c).

Flange, Welded

See 49 CFR 178.345-1 (c).

Flash Point

Means the temperature at which the substance gives off flammable vapors which, in contact with a spark of flame, will ignite.


Liquidtight rail on top of a tank which contains water and spillage and directs it to suitable drains, and may be combined with the overturn protection.

Flashing Drain

Metal or plastic tube which drains water and spillage from flashing to the ground.

Float Control

A switching device which opens a circuit when product being loaded into a tank reaches a pre-determined level.


Acronym that stands for Federal Motor Carrier Safetty Administration


Acronym that stands for Federal Motor Carrier Safetty Regualtions, one of the most referenced set of publicaitons in the transport industry

Gas Free

See Degas.

Gauge, Liquid Level

A device used to measure liquid commodity levels inside a cargo tank.

Gauge, Rotary

A gauge for determining the liquid level in a pressurized tank.

Girth Seam (A Circumferential Joint)

A welded joint around the entire circumference or partially around the circumference of the cargo tank joining two sections of the tank shell.


(1) See Bulkhead, Tank. (2) Also terminology for pressure of a liquid caused by its own weight.

Head, Hemispherical

A head which is half a sphere in shape. Often used on MC 331 compressed gas cargo tanks and MC 338 cryogenic liquid cargo tanks.


A pipe, tube, etc., that connects two or more pipes or tubes permitting the transfer of vapors or liquids to a common outlet. (Also see Manifold).

Heat Panel

A panel attached to the cargo tank\0xD5s shell by welding, bonding or banding used to heat the contents. May also be called steam panel.

Heating Tube

A tube installed inside a tank which is used to heat the contents. May also be called “fire tube” when the direct heat source is a flame.

Holder, Certificate

A moisture proof container provided for storage and easy access to trailer related literature such as licenses, registration, defect and maintenance information. (Formerly called Registration Holder and Defect Card Holder)

Hood, Vapor Recovery

A collecting device installed over tank vents or vapor valves for transfer of vapors during tank loading or unloading.


Sloping panels at bottom of tank which direct dry bulk solids to the outlet piping.

Hose, Air Jumper

Hose connecting the truck tractor air supply to a trailer air line or hose.

Hose Carrier

Hose tube, hose trough, hose tube ends and hooks, mandrel and bracket.

Hose, Discharge

Hose used to unload the tank.

Hose Hooks

Hooks which carry the hose.

Hose Trough

An open type structure used on tank and bulk commodity trailers for the storage of cargo handling hoses.

Hose Tube

A housing used on tank and bulk commodity trailers for the storage of cargo handling hoses.

Indicator, Liquid Level

A device, usually a float or spew gauge, for determining the level of the product in a tank.

Indicators, Capacity

Device installed on tank to indicate capacity at a specific level. (Sometimes called markers).

Inspection Agency, Authorized

See 49 CFR 171.8.

Inspector, Authorized

See 49 CFR 171.8.

Inspector, Registered

See 49 CFR 171.8.

Interlock, Parking

See Brake Interlock, Parking


A metal cover which protects the tank insulation.

Label, MC/DOT Tank Certification

See Plate, MC/DOT Tank Certification.

Lading, Hazardous

See 49 CFR 178.345-1 (c).

Line Aeration

Line supplying air to the Aerator.

Line, Blowdown

A line through which tank air pressure is released by means of the blowdown valve.

Line Charging

See 49 CFR 178.345-1 (c).

Line Crossover

Installed in tank piping system to allow unloading from either side of tank.

Line, Pipe

A product inlet or outlet line.

Line, Pump Off

A pipeline which usually runs from the tank discharge openings to the front of the trailer. Most pumps are mounted on the tractor.

Line, Vapor Recovery

A line which connects the vapor recovery hood to a convenient location for attachment to a vapor recovery hose.


The material applied to the inside of a tank shell surface to protect the tank shell from its contents.


An opening usually equipped with removable cover and large enough to admit a man into a cargo tank or dry bulk trailer; may incorporate vents, fill opening and other devices.

Manhole, Dam

Liquid tight box for the collection of spillage (also called spill box, flashing box or crows nest).


Used to join a number of pipelines to a common inlet or outlet. (Also see Header).

Manufacturer, Cargo Tank

See 49 CFR 178.320 (a).


See Pressure, Maximum Allowable Working.

MC Specification

See Specification, MC.


See 49 CFR 180.403.


The NHTSA certification label containing the manufacturer\0xD5s name and vehicle identification number or for cargo tank vehicles manufactured prior to the NHTSA certification plate containing the manufacturer\0xD5s name and cargo tank serial number. (See Plate, MC/DOT)

Nozzle, Tank

See 49 CFR 178.345-1 (c). The pipe or tubular section of the nozzle is short and may be threaded instead of flanged.


The space that remains unfilled in a cargo tank after being loaded with payload.


See 49 CFR 178.345-1 (c).

Outlet, Loading/Unloading

See 49 CFR 178.345-1 (c).

Outlet, Vapor

The terminus of the vapor recovery line.


Structural load-carrying members attached to and extending outward from the main longitudinal frame members of a tank trailer, which cradle the tank shell or stiffeners. Sometimes called Cradle End.

Overturn Protection

Protection for fittings on top of a tank in case of rollover. May be combined with flashing rail or manhole dam. Also known as Rollover Damage Protection. See 178.345-8 (c) for DOT 400 Series cargo tanks.


A piece of material attached to the tank shall to which various attachments are made.


See Line, Pipe.

Plate, MC/DOT Tank Certification

(As required by the Research and Special Programs Administration) Metal plate permanently affixed to a cargo tank and located near the front left side of the cargo tank stating that the cargo tank conforms with all applicable Federal Hazardous Materials Regulations in effect on the date of the original manufacture or modification.


Area on top of the tank near the manhole designed for a person to stand upon.

Pressure, Inspection

See 49 CFR 178.345-1 (c).

Pressure, Maximum Allowable Working

See 49 CFR 171.8 and 178.345-1 (c).

Pressure, Test

See 49 CFR 178.345-1 (c).

Protection, Bottom Damage

Device which protects outlets and piping located in the lower one-third of the cross section perimeter from damage during an accident. See 178.345-8 (b) for DOT 400 series cargo tanks.

Protection Device, Rear-End Tank

See 49 CFR 178.345-1 (c). (Also see Bumper, Rear).

Protection Overturn

See Overturn Protection.


Pressure expressed in pounds per square inch absolute. Add approximately 14.7 to gauge reading to give absolute reading.


Pressure expressed in pounds per square inch gauge. Gauge pressure is the difference between atmospheric pressure and pressure being measured.


Abbreviation for Power Take Off.


See 49 CFR 180.403.


See 49 CFR 180.403

Replacement Barrel

To completely replace the vessel weldment of an existing cargo tank with a newly manufactured vessel weldment using only new materials.

Ring Stiffener

Structure encircling the tank either inside or outside the tank shell to maintain the shape of the tank and its structural stiffness when under pressure/vacuum.

Rollover Protection

See Overturn Protection


Abbreviation for Recommended Practice.

Rupture Disc (A frangible vent)

A safety device which fails at a predetermined pressure and thus protects a pressure vessel from being over pressurized. (Also see Vent).

Sacrificial Device

See 49 CFR 178.345-1 (c). (Also see Shear Section).

Seam, Girth

See Girth Seam.

Sensor, High Level

A liquid actuated sensor installed in a secondary shut-off system. Also, this sensor is sometimes used as a primary shut-off system. The signal from this sensor stops the loading pumps or closes the emergency valve upon overfill. (See Shutoff System, Secondary).

Sensor, Liquid Level

See Indicator, Liquid Level.

Sensor, Retained

A liquid actuated sensor installed in the bottom of a compartment to indicated the presence of liquid.

Shear Section, DOT 400 Series Cargo Tanks

See 49 CFR 178.345-1 (c). (Also see Sacrificial Device).

Shear Section, MC 300 Series Cargo Tanks

A machine groove located outboard of an emergency valve seat and within 4 inches of the vessel which should break under strain and leave the emergency valve seat and its attachment to the vessel and the valve head intact and capable of retaining product.

Shell, Tank

See 49 CFR 178.345-1 (c).

Shutoff System, Secondary

A system that provides overflow protection during bottom loading.


Difference in height between highest and lowest points of the tank bottom.

Slope Sheet

Panels located at each end or side of compartment which direct product by gravity to hoppers.

Specification, MC/DOT

The U.S. DOT Motor Carrier Specification for tank vehicles authorized to carry specified hazardous materials.

Splash Guard

A device which deflects road spray.


The exhaust pipe for tanks with burners.

Steam Panel

See Heat Panel.

Stick, Dip

See Dip Stick.

Stiffener, Ring

See Ring Stiffener.


See 49 CFR 180.403.

Structure, Connecting

See 49 CFR 178.345-1 (c).


The frame to which the undercarriage is attached.


See 49 CFR 178.345.1 (c).

Sump, Cleanout

The low point of a tank which may be opened for cleaning.

Swivel Joint

A movable metallic product transfer conductor usually used on discharge lines to eliminate the bending or twisting of hoses.


See 9 CFR 178.345-1 (c).

Tank, Cargo

See 49 CFR 171.8 and 178.320 (a).

Tank Design Type

See 49 CFR 178.320 (a).

Tank, DOT 406

Tank built after October 1, 1990, meeting US DOT specifications DOT 406 as defined in 49 Code of Federal Regulations 178.346. This tank is typically used to carry gasoline, fuel oil, alcohol, or other liquid flammables. This tank is typically constructed of aluminum and designed with an elliptical cross section.

Tank, DOT 407

Tank built after October 1, 1990, meeting US DOT specifications DOT 407 as defined in 49 Code of Federal Regulations 178.347. This tank is typically used to carry solvents, plasticizers, casinghead, gas, etc. This tank is typically constructed of stainless steel or aluminum and designed for pressure of at least 25 psig.

Tank, DOT 412

Tank built after October 1, 1990, meeting US DOT specifications DOT 412 as defined in 49 Code of Federal Regulations 178.348. This tank is typically used to carry corrosives. This tank is typically constructed of stainless steel or carbon steel and designed for a pressure of 35 psig.

Tank, Dry Bulk

A tank typically constructed of aluminum or carbon steel to carry dry bulk commodities such as cement, fertilizer, sand, plastics, grain, etc. with typical densities ranging from 18 to 125 pounds per cubic feet. This tank is typically designed for an unloading pressure of 15 psig.

Tank, Frac

A portable storage tank used to hold flushing or fracing fluid at an oil well site. Characterized by a large, rectangular cross section, a single axle suspension, no landing gear, and a front winching bar.

Tank, Fuel

Tank used to hold fuel for the burners.

Tank, Hot Products

A tank typically insulated to handle asphalt and other products at a temperature over 300\0xA1 F. This tank is typically constructed of aluminum, steel, or stainless steel and designed for atmospheric pressure.

Tank, MC 304

Tank built prior to December 1, 1967 to old US DOT Specifications MC 304 for the transportation of flammable liquids or poisonous liquids. This tank was constructed of steel and aluminum with a design pressure of at least 25 psig. This tank is a predecessor of the MC 307 tank.

Tank, MC 305

Tank built prior to December 1, 1967 to old US DOT Specification MC 305 for the transportation of flammable liquids or poisonous liquids. This tank was constructed of aluminum and designed for atmospheric pressure. This tank is a predecessor of the MC 306 tank.

Tank, MC 306

Tank built after December 1, 1967 and prior to April 21, 1994, meeting US DOT Specification MC 306 as defined in 49 Code of Federal Regulations 178.341. This tank is typically used to carry gasoline, fuel oil, alcohol, or other liquid flammables. This tank is typically constructed of aluminum and designed for atmospheric pressure. This tank is a predecessor of the DOT 406 cargo tank.

Tank, MC 307

Tank built after December 1, 1967 and prior to April 21, 1994, meeting US DOT Specification MC 307 as defined in Code of Federal Regulations 178.342. This tank is typically used to carry solvents, plasticizers, casinghead gas, etc. This tank is typically constructed of stainless steel and designed for a pressure of at least 25 psig. This tank is a predecessor of the DOT 407 cargo tank.

Tank, MC 311

Tank built prior to December 1, 1967 to old US DOT Specification MC 311 for the transportation of corrosives. This tank was constructed of steel or aluminum. This tank is a predecessor of the MC 312 tank.

Tank, MC 312

Tank built after December 1, 1967 and prior to April 21, 1994, meeting US DOT Specification MC 312 as defined in 49 Code of Federal Regulations 178.343. This tank is typically used to carry corrosives. This tank is typically constructed of stainless steel of carbon steel and designed for a pressure of 35 psig. This tank is a predecessor of the DOT 412 cargo tank.

Tank, MC 330

Tank built prior to December 1, 1967 to old US DOT Specification MC 330 for the transportation of compressed gases. This tank was typically constructed of quenched and tempered or carbon steel for a pressure of 250 to 265 psig. This tank is a predecessor of the MC 331 tank.

Tanks, MC 331

Tank meeting US DOT Specification MC 331 as defined in 49 Code of Federal Regulations 178.337. This tank typically used to carry anhydrous ammonia, propane, or other liquefied or pressurized gases. This tank is typically constructed of quenched and tempered or carbon steel and designed for a pressure of 265 psig.

Tank, MC 338

Tank built after October 1, 1984, meeting US DOT Specification MC 338 as defined in 49 Code of Federal Regulations 178.338. This tank is insulated and designed to carry cryogenic liquids.

Tank, Non-Spec

A tank not meeting one of the US DOT Specifications.

Tank, Sanitary

A tank typically insulated to carry milk, vinegar, vegetable oils, syrups, and other food products. This tank is typically constructed of stainless steel and designed for atmospheric pressure.

Tank, Self Supporting

A tank trailer whose shell is the structural support member for the vehicle.

Tank, TOFC

A tank meeting Association of American Railroads Specification M-931, Appendix F. This tank is a MC 307, MC 312, DOT 407, DOT 412 or IMCO Type 4 tank constructed of steel with a minimum design pressure of 35 psig. This tank trailer is for trailers on railroad flat car service.

Tank, Vacuum

Tank equipped with a pump to reduce the pressure in the tank to much less than atmospheric pressure. This reduced pressure of \0xD2vacuum\0xD3 is used for loading the tank. (See Tank, Waste). Also see 49 CFR 178.345-1 (c).

Tank, Variable Specification

See 49 CFR 178.345-1 (c).

Tank, Washout

A tank holding solvent for cleaning pump and discharge hose.

Tank, Waste

Tank designed to transport waste consisting of liquid and/or solids. Tank may have a full opening rear head. Tank may be equipped for vacuum loading.


Abbreviation for Technical Bulletin.

Toughness of Material

See 49 CFR 178.345-1 (c).


That section of a tank which joins two unequal cross sections.

Tube, Dip

See Dip Tube.

Valve, Blow Down

A manually operated valve whose function is to quickly reduce tank pressure to atmospheric.

Valve Box

See Fitting Guard.

Valve Check

A valve built to provide free fluid flow in one direction only.

Valve, Crossover

A valve which allows the discharge to be directed to either side of the tank via the crossover line.

Valve, Emergency

A remote controllable valve installed in a tank outlet sump or its companion flange which is capable of self-closing in the event of an emergency. Also known as Valve, Internal Self-Closing Stop.

Valve, Emergency, Operator

A device used to open and close emergency valves.

Valve, Emergency, Remote Control

A secondary closing means, remote from tank discharge openings, for operation in event of fire or other accident.

Valve, Excess Flow

A valve which automatically closes at its rated flow of gas or liquid.

Valve, Internal

See Valve, Emergency.

Valve, Internal Self-Closing Stop

See 49 CFR 178.345-1 (c). Also known as Valve, Emergency.

Valve, Loading/Unloading Stop

See 49 CFR 178.345-1 (c).

Valve, Outlet

The valve which is farthest downstream in a tank piping system to which the discharge hose is attached.

Valve, Outlet Stop

See 49 CFR 178.345-1 (c).

Valve, Pressure Relief

Valve with predetermined start to discharge pressure to protect the tank from being over-pressurized. (Also see Vent, Pressure Actuated).

Valve, Product

Valve for holding or releasing product into or out of the tank.

Valve, Proportioning

A valve used to balance or divide the air supply between the aeration system and the discharge manifold.

Valve, Pump Off

Valve on pump-off line which when open allows the product to be pumped out of the tank.

Valve, Sampling

Valve which when open allows a sample of product to be collected.

Valve, Self-Closing Stop

See 49 CFR 178.345-1 (c).

Valve, Self Contained Shut Off

An emergency valve that closes upon receiving a signal from the high level sensor.

Valve, Shuttle

A connective valve which selects one of two circuits, whichever supplies the higher pressure.

Valve, Splitter

A valve installed to divide pipeline manifold.

Valve, Stop

See 49 CFR 178.345-1 (c).

Valve, Vapor Recovery (See Vent, Vapor Recovery)

A valve typically found in a vapor recovery system to control the flow of vapors. Also a vent that opens and closes with the actuation of the emergency valve permitting the transfer of vapors when in the open position. (Typically opens inward into the tank compartment).

Valve, “Y”

A valve which can be used for both bottom loading and off-loading. Incorporates American Petroleum Institute standard adapter.

Vapor Free

See Degas.

Vehicle, Cargo Tank Motor

See 49 CFR 171.8 and 49 CFR 178.320 (a).

Vehicle Assembly, Cargo Tank Motor

See 49 CFR 107.502.

Vehicle, Multi-Specification Cargo Tank Motor

See 49 CFR 178.345-1 (c).


Devices which control or limit tank pressure. Some type are: 1. Outbreathing (pressure relief) 2. Inbreathing (vacuum relief) 3. Fusible (opens at elevated temperature) 4. Christmas tree (slang for a combination vent) 5. Rupture disc ( See Rupture Disc)

Vent, Overflow

Vent on hot products tanks for overflow of product due to surge and/or expansion.

Vent, Pressure Actuated

A normally-closed, spring-loaded vent for pressure protection. Required on MC 306 cargo tanks, 49 Code of Federal Regulations, 178.341-4-(d); MC 307 cargo tanks, 178.342.4 (c); MC 312 cargo tanks, 178.343-4 (a); DOT 406 cargo tanks, 178.346-10 (d); DOT 407 cargo tanks, 178.347-10 (d); and DOT 412 cargo tanks, 178.348-10 (d).

Vent, Vacuum Breaker

A spring-loaded normally closed vent for vacuum protection.

Vent, Vapor Recovery

A vent that opens and closes with the actuation of the emergency valve permitting the transfer of vapors when in the open position. (Typically opens outward from the tank compartment).

Vents, Normal

A pressure-vacuum vent specified in 49 Code of Federal Regulations, 178.341-4 (b) and (c) and required in each MC 306 compartment and may be installed in each DOT 406 cargo tank.


An enclosed space in a vessel which does not contain product and has no manhole. Also see 49 CFR 178.345-1 (c).

Void Compartment

A void equipped with access manhole.


That portion top of a tank designed for personnel to walk on.

Wall, Cargo Tank

See 49 CFR 178.320 (a).

Weight per Gallon, Allowable

The maximum density, as pounds per gallon, of products which be loaded into a given tank without exceeding the load limits of the tank container or tank trailer.

Weldment, Vessel

The entire tank vessel and welded appurtenances such as nozzles, manholes, flanged and threaded fittings, etc. Bolted-on appurtenances are not included.


Commercial Insurance Terms

Abandonment: As used in property insurance, prohibits the insured from abandoning damaged property to the insurance company for repair or disposal

Accelerated Benefits Rider: An adjustment (rider) to a life insurance policy that allows for the early payment of some portion of the policy’s face amount should the insured suffer from a terminal illness or injury.

Accidental Death Benefit Rider: An adjustment (rider) to a life insurance policy that provides for payment of an additional cash benefit when death occurs by accidental means. This amount depends on the value of the policy.

Accidental Death Insurance: An Insurance poicy that provides payment if the insured’s death occurs as a results from an accident.

Accounts Receivable Coverage: Covers loss of sums owed to the insured by its customers that are uncollectible due to damage by an insured peril to accounts receivable records

Actual Cash Value (ACV): Cost to repair or replace damaged property with materials of like kind and quality, less depreciation

Additional Insured: A person or organization for whom insured status is arranged by endorsement

Advertising Injury: General liability coverage that insures against libel, slander, invasion of privacy, copyright infringement and misappropriation of advertising in connection with the insured’s advertising of its goods or services

Agent: An authorized representative of an insurance company.

Aggregate: The maximum amount an insurance company will pay during the policy

All Risk Coverage: Property insurance covering loss arising from all causes of loss except those that are specifically excluded

Annually Renewable Term: Term insurance that provides coverage for one year and allows the policy owner to renew his or her coverage each year.

Application: A form with the information needed for an insurance company to underwrite and rate a specific policy

Assignment Assignment: The transfer of ownership of a Life Insurance policy from one person to another.

Attained Age: Your current age. Your attained age is a factor life insurance companies use to determine premiums.

Audit: A verification of the financial records, usually payroll or receipts, of an organization to determine exposures and premiums

Automobile: A land motor vehicle, trailer or semi-trailer designed for travel on public roads, not including ‘mobile equipment’

Backdating: Making the effective date of a policy earlier than the date of application. Backdating is often used to make the age of the applicant lower than it actually was at the time of application so that he/she can get a lower premium. State laws often set limits to this.

Bailee Coverage: Coverage on property left in the care of the insured for storage, repair or servicing

Basic Cause of Loss Form: Property coverage for named perils: Fire, Lightening, Explosion, Smoke, Windstorm, Hail, Riot, Civil Commotion, Aircraft, Vehicles, Vandalism, Sprinkler Leakage, Sinkhold Collapse and Volcanic Action

Basic Limits: The minimum limits of liability that can be carried by an insured

Beneficiary: The designated person set to receive the death benefit if the insured should die.

Best’s Rating: A rating system by A.M. Best Company giving the financial condition of insurance companies

Binder: A temporary insurance policy that expires at the end of a specific time period or when a permanent policy is written. A binder is given to an applicant for insurance during the time it takes the an insurance company to complete the policy paperwork.

Bodily Injury by Accident Limit: The most an insurer will pay under Part Two of a Workers’ Compensation Policy for claims arising out of any one accident, regardless of how many employee claims arise out of the accident

Bodily Injury by Disease, Each Employee : The most an insurer will pay under Part Two of a Workers’ Compensation Policy for damages due to bodily injury by disease to any one employee

Bodily Injury by Disease-Policy Limit : The most an insurer will pay under Part Two of a Workers’ Compensation Policy employee bodily injury by disease claims during the policy period regardless of the number of employees who make such claims

Bodily Injury Liability Limit: The insured is legally liable for damages due to bodily injury, sickness, or disease, including resulting death

Boiler & Machinery Insurance: Coverage for loss caused by mechanical or electrical equipment breakdown, including damage to the equipment

Bond: A written agreement in which one party, the surety, guarantees the performance or honesty of a second party, the principal (obligor), to the third party (obligee) to whom the performance or debt is owed

Brands and Labels Endorsement: Property insurance coverage that allows the insured to remove labels from damaged goods or mark the items as ‘salvage,’ provided the goods are not damaged in the process

Broad Causes of Loss Form: Property coverage for the named perils: Fire, Lightening, Explosion, Smoke, Windstorm, Hail, Riot, Civil Commotion, Aircraft, Vehicles, Vandalism, Sprinkler Leakage, Sinkhole Collapse, Volcanic Action, Breakage of Building Glass, Falling Objects, Weight of Snow, Ice or Sleet, Water Damage (in the form of leakage from appliances) and Collapse from Specified Causes

Building Ordinance Coverage: Covers against loss caused by enforcement or ordinances or laws regulating construction and repair of damaged buildings

Burglary: Theft of property by forcible entry, which is evidenced by visible signs, in a premises, by a person

Business Auto Policy: Auto Policy for businesses that includes auto liability and auto physical damage coverages

Business Income Coverage: Insurance covering loss of income by a business when operations are interrupted due to property loss that is a covered cause of loss

Business Interruption Coverage: See Business Income Coverage

Business Owners Policy (BOP): A policy that combines property and liability coverages for special types of small businesses

Cancellation: The termination of an insurance policy usually before its expiration

Care, Custody or Control: An exclusion of liability insurance which eliminates coverage for damage to property in the insured’s care, custody or control

Carrier: The insurance company which provides coverage

Cash Benefits: The Money that is paid to the policy holder upon settlement of a covered claim.

Cash Value: The equity amount or “savings” accumulation in a whole life insurance policy.

Casualty Insurance: Insurance that covers loss caused by injuries to persons and the legal liability imposed on the insured for injury or for damage to property of others

Catastrophe: A severe loss causing sizable financial loss

Causes of Loss Forms: The commercial property forms that define the covered causes of loss for which coverage is provided. Commonly, there are 3 Cause of Loss Forms: Basic, Broad and Special

Certificate of Insurance: A document providing evidence that insurance has been purchased

Claim: A request by a policyholder or a claimant for payment under a policy of insurance

Claim Expense: Expenses of settling or investigating a claim

Claimant: The person presenting a claim

Claims Reserve: An amount of money set aside to meet claims reported but not paid

Class: A group of businesses who have common or similar exposures and are grouped together for rating purposes

Classification: The arranging or establishing of business groups or categories for rating purposes

Coinsurance Provision: An insurance provision for property coverages in which the policyholder must carry an amount of insurance that is at least equal to a set percentage of the value of the property in order to receive full payment of a loss

Collapse: Collapse of a building and collapse of personal property within a building due to specified causes (such as weight of snow, ice or rain). Does not include collapse due to design error or due to faulty workmanship or materials if the collapse occurs after construction is complete

Collision Insurance: Provides for payment to a covered automobile resulting from the striking of another object by a moving vehicle

Commercial General Liability Policy (CGL): A coverage which protects business organizations against liability claims for bodily injury and property damage. Those claims may be the result of events at your place of business, from your business operations, the products or services you make or do, communications or advertisements your business broadcasts

Competitive State Funds: State-owned and operated facilities that write Workers’ Compensation Insurance solely for that state

Completed Operations: A General Liability coverage for the work of the insured that has been completed away from the business premises

Comprehensive Auto Coverage: Covers an automobile for loss or damage for all causes except for those specifically excluded

Compulsory Insurance: Insurance that is required by law

Concealment: Failure to disclose facts which may void an insurance policy

Conditional Receipt: Given to policy owners when they pay a premium at the time of the application. These receipts bind the insurance company, provided your policy is approved, but are subject to any other conditions stated on the receipt.

Conditions: Things agreed upon in an insurance policy that state the rights and the requirements of the insured and the insurer

Consequential Loss: An indirect loss such as the reduction in value of property that is the result of a direct damage loss

Constructive Total Loss: Term used when damage to property is more than the value of the property

Contestable Clause: A provision in an insurance policy setting forth the conditions or time period under which the insurance company may contest or void the policy. After this time has lapsed, typically two years, the policy cannot be contested. Example: Suicide.

Contingent Beneficiary: Person or persons designated to receive the value of an insurance policy in case the original beneficiary is not alive.

Contract: An agreement between two or more parties with characteristics of mutual assent, competent parties, a valid consideration and legal subject

*Coverage: Coverage is just another term for Insurance. It can be used to mean either the dollar amounts of insurance purchased ($500,000 of liability coverage), or the type of loss covered (coverage for theft).

Convertible Term: A policy that may be changed to another form by contractual provision and without evidence of insurability. Most term policies are convertible into permanent insurance.

Countersignature: The signature of a licensed agent or representative on a policy that is required to validate the policy

Cross-Purchase Plan: An agreement that provides that upon a business owner’s death, surviving owners will purchase the deceased’s interest, often with funds from life insurance.

Cumulative Injury: A type of injury which occurs from the repetition of tasks over an extended length of time

Data Processing or EDP Coverage: All risk property insurance for electronic data processing equipment (computers), computer programs and data including mechanical breakdown, electrical injury and changes in temperature and humidity

Death Benefit: The amount of money paid to the beneficiary when the insured person dies.

Decreasing Term Insurance: Term life insurance on which the face value slowly decreases in scheduled steps from the date the policy comes into force to the date the policy expires, while the premium remains level. The intervals between decreases are usually monthly or annually.

Debris Removal: The cost of removal of debris from covered property damaged by an insured peril

Deductible: The amount of loss which is paid or absorbed by the insured prior to determining the insurance company’s liability

Deposit Premium: The amount of premium required at the beginning of a policy prior to the actual premium being determined

Depreciation: The reduction in value of property over a period of time. Usually as a result of age, wear and tear, or economic obsolescence

Direct Damage: Causes of loss that produce direct and straightforward property damage (without interruption in time or deviation in space) from the cause of the event to the damaged property

Double Indemnity: Payment of twice the basic benefit in the event of loss resulting from specified causes or under specified circumstances.

Driver Other Car Endorsement: An endorsement that can be added to an automobile policy that gives protection while the insured designated in the endorsement is driving a car other than the one named in the policy

Drop Down Provision: A clause used in Umbrella policies providing that the Umbrella will ‘drop-down’ over underlying policy aggregate limits when they have been reduced or exhausted

Earned Premium: The amount of premium that has been used for certain periods of time

Earth Movement or Earthquake Exclusion: An exclusion found in most property insurance policies eliminating coverage for earth movement or earthquake, except ensuing fire

Effective Date: The date on which an insurance binder or policy goes into effect

Electrical Damage or Injury Exclusion: An exclusion usually contained in property insurance policies eliminating coverage for damage to electrical appliances caused by artificially generated currents, except for ensuing fire or explosion

Employee Dishonesty Coverage: Coverage for theft of money, securities or property by an employee

Employee Leasing: A staffing method which an employee leasing company provides all or most of its client’s employees

Employers Excess Indemnity Insurance: Insurance coverage purchased by employers that do not subscribe to the Texas Workers’ Compensation law

Employers Liability Coverage: Part 2 of the Workers’ Compensation policy which pays on behalf of the employer all sums that the employer becomes legally obligated to pay because of bodily injury by accident or disease sustained by any employee of the insured arising out of and in the course of his employment by the insured

Employment Practices Liability Insurance: A form of liability insurance covering wrongful acts arising from employment practices such as wrongful termination, discrimination and sexual harassment

Endorsement: A document attached to an insurance policy that changes the original policy provisions

Equipment Floater: A property insurance coverage for equipment that is often moved from place to place

Estimated Premium: A preliminary premium amount that could be adjusted based on a variance in exposures

Evidence of Insurability: Any statement or proof of a person’s physical condition, occupation, etc., affecting acceptance of the applicant for insurance.

Excess and Surplus Lines Insurance: Coverage that is provided by insurers not licensed in the states where the risk is located

Excess Liability Policy: A policy that provides additional limits in excess of an underlying liability policy

Exclusions: Specified hazards listed in a policy for which benefits will not be paid.

Expected or Intended: An exclusion for injury or damage that is expected or intended

Expediting Expense Coverage: Coverage providing reimbursement of expenses for temporary repairs and costs incurred to speed up the permanent repair or replacement of covered property or equipment

Expense Constant: A small flat expense charged to Workers’ Compensation policies

Experience Modifier: A debit or credit factor developed by measuring the difference between the insured’s actual past experience and the expected or actual experience of the class of business

Expiration: The ending date of an insurance policy

Exposure Base: The basis of rates that are applied to determine premium. Some exposures may be measured by payroll, receipts, sales, square footage, area, man-hours or per unit

Extra Expense Coverage: Coverage for reimbursement of expenses in excess of normal operating expenses that are incurred to continue operations after a direct damage loss

Extraterritorial Coverage: The coverage for extending workers’ compensation law to provide benefits for workers hired in one state but injured while working in another state

Face Amount: The amount covered by the terms of an insurance contract, usually found on the first page of the policy.

Fiduciary Liability: The liability placed on trustees, employers, fiduciaries and professional administrators with respect to errors and omissions in the administration of employee benefit programs

Final Expenses: Expenses incurred at the time of a person’s death. These include but are not limited to:funeral costs, court expenses, current bills or debt, mortgages, loans and taxes.

Fine Arts Coverage: Property insurance for works of art

Fire Department Service Charge Coverage: Coverage in a property insurance policy for charges incurred by the insured from a fire department for their services in fighting a fire

Fire Legal Liability Coverage: Liability coverage for the insured’s legal liability for fire damage to premises rented by the insured

Fire Wall: A wall designed to prevent the spread of fire from one part of a building to another

Firewall: A computer that protects a company’s private network from outside internet users

Fixed Benefit: A death benefit, the dollar amount of which does not vary.

Flat Cancellation: The full cancellation of a policy as of the effective date of coverage which requires the return of paid premium in full

Flood Coverage: Coverage for damage to property caused by flood

Flood Exclusion: A provision in most all property insurance policies eliminating coverage for damage by flood and possibly other types of water damage, such as seepage and sewer backup

Follow Form: An umbrella policy provision that follows the underlying policy for coverages and policy provisions

Forgery or Alteration Coverage: Covers loss due to the dishonesty of writing, signing or altering of checks and bank drafts

Fortuitous Event: An event that is subject to chance without the implication of suddenness

Free Look: Trial period required in most states where policy owners have up to 20 days to examine their new policies with no obligation.

Frequency: The number of times that a loss will occur within any given period of time

Full Coverage: Any form of insurance that provides payment in full of all losses caused by the perils insured against without applying a deductible or depreciation

Funeral Expenses: Expenses including casket, vault, grave plot, headstone and funeral director.

Garage Liability Insurance: Insurance coverage for the legal liability of automobile dealers, garages, repair shops and service stations for bodily injury and property damage arising out of their business operations

Garagekeepers Coverage: Provides coverage to owners of storage garages, parking lots and body and repair shops for their liability of damage to automobiles left in their custody for safekeeping or repair

General Aggregate Limit: The maximum amount of insurance payable during the policy period for losses (other than those arising from the products – completed operations hazards as covered under the standard commercial general liability policy)

General Liability Insurance: Insurance protecting businesses from most liability exposures other than automobile and professional liability

Glass Insurance: A property insurance policy covering breakage of building glass regardless of cause

Governing Classification: In Workers’ Compensation Insurance, the classification that best describes the workers’ compensation exposure of an employer’s business

Grace Period: Period of time after the due date of a premium during which the policy remains in force without penalty.

Graded Premium Policy: A type of whole life policy designed for people who want more life coverage than they can currently afford. They pay a lower premium rate that increases gradually over the first three to five years and then remains constant over the life of the policy.

Gross Negligence: Willful and wanton misconduct

Gross Vehicle Weight (GVW): The weight specified by a manufacturer for the maximum total loaded weight of a single vehicle

Guaranteed Term: A form of renewable term insurance that remains in force as long as the premiums are paid on time. With guaranteed term insurance, the insurance company cannot terminate the policy during the term.

Hired Automobile: An automobile whose exclusive use has been temporarily given to another for a monetary sum or other consideration. The business auto definition of ‘hired autos,’ however, includes autos borrowed except those borrowed from employees or partners
Hold Harmless Agreement: A contractual agreement that requires one contracting party to assume certain legal liabilities of the other party
Host Liquor Liability: Liability coverage for hosts of business or social functions arising out of the serving or distribution of alcoholic beverages by a party not engaged in this activity as a business enterprise

Improvements and Betterments: Additions or changes made by a lessee at his own expense to property that may not legally be removed. Usually covered under the tenants property coverage

Incontestable Clause: A clause in a policy providing that a policy has been in effect for a given length of time (two or three years), the insurer shall not be able to contest the statements contained in the application. In life policies, if an insured lied as to the condition of his health at the time the policy was taken out, that lie could not be used to contest payment under the policy if death occurred after the time limit stated in the incontestable clause.

Incurred Losses: The amount of paid claims and loss reserves within a particular period of time, usually a policy year. Customarily computed as losses incurred during the period, plus outstanding losses at the end of the period, less outstanding losses at the beginning of the period

Independent Adjuster: A claims adjuster who provides adjustment services to insurance companies but is not employed by them

Independent Contractor: An individual or company who has agreed, in writing, with another party to perform a job or function on behalf of that party

Inflation Guard Provision: A provision that increases the limit of insurance by a specified percentage over a specified period of time to offset inflation costs

Insurability: The condition of the individual wishing to be insured, including their health, susceptibility to injury and life expectancy.

Insurance: A formal social device for reducing risk by transferring the risks of several
individual entities to an insurer. The insurer agrees, for a consideration, to pay for the loss in the amount specified in the contract.

Insurance Policy: The printed form which serves as the contract between an insurer and an insured.

Insurance to Value: Insurance written in an amount equal to the value of the property or which meets coinsurance requirements

Insured: The party who is being insured. In life insurance, it is the person because of his or her death the insurance company would pay out a death benefit to a designated beneficiary.

Insurer: The insurance company; Party that provides insurance coverage, typically through a contract of insurance.

Irrevocable Beneficiary: A beneficiary that cannot be changed without that beneficiary’s consent.

Increasing Term Insurance: Term life insurance in which the death benefit increases periodically over the policy’s term. Usually purchased as a cost of living rider to a whole life policy.

Joint Venture: A business relationship when two or more persons join their labor or property for a business undertaking and share profits

Lapse: Termination of a policy due to the policy owner’s failure to pay the premium within the grace period.

Leasehold Interest: Property insurance covering the loss suffered by a tenant due to termination of a lease because of damage to the leased premises by a covered loss

Lessee: The person to whom a lease is granted

Lessor: The person granting the lease

Liability: The legal obligation to pay a monetary award for injury or damage caused by one’s negligent or statutorily prohibited action

Liberalization Clause: A provision within an insurance policy that broadens the coverage if the insurance company offers a broader coverage form within the first 45 days of coverage

Lien: An obligation that can be held by an individual who has an interest in a particular matter or property

Life Expectancy: The average number of years a person is expected to live based on a national average per age group, and other factors.

Life Insurance: Insurance coverage that pays out a set amount of money to specified beneficiaries upon the death of the individual who is insured.

Limit of Liability: The most an insurance company agrees to pay in the case of loss

Limited Pay Policy: A type of whole life insurance designed to let the policyholder pay higher premiums over a specific time period such as 10 or 20 years so that they won’t have to pay any premiums for the rest of his or her life.

Longshore and Harbor Workers’ Compensation Act: A federal law that provides workers’ compensation benefits to employees of a vessel injured in maritime employment – usually in loading, unloading, repairing or building a vessel – but not applicable to crew members

Loss: The amount an insurance company pays for damages under the terms of a policy

Loss Adjustment Expense: The cost assessed to a particular claim for investigating and adjusting that claim

Loss Constant: A flat charge added to the premium of small workers’ compensation policies to offset higher loss ratios

Loss Control: A technique that is put in place to reduce the possibility that a loss will occur or reduce the severity of those that do occur

Loss Payable Clause: An insurance clause that authorizes loss payments to a person or entity having an insurable interest in the covered property

Loss Ratio: Percentage of losses incurred against earned premiums

Loss Report: A form showing reported claims which provides information such as the date of occurrence, type of claim, amount paid and amount reserved for each loss

Loss Reserve: An estimated amount set aside for a particular claim that has not yet been paid

Lost Policy Release: A signed statement by the named when the insured wishes to cancel the policy, but has lost or mislaid the policy, which releases the insurance company from all liability or losses

Medical: A document completed by a physician or another approved examiner and submitted to an insurer (insurance company) in order to provide medical information. This is usually done to determine insurability (or lack of insurability) or is sometimes done in relation to a claim.

Medical Expenses: Reasonable charges for medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, prosthetic devices, and funeral expenses. What is considered reasonable is outlined in a policy.

Medical Payments, Auto: Coverage, which is optional, under an auto policy to pay for medical expenses for bodily injury caused by an auto accident, regardless of fault. Coverage for persons other than the named insured and his or her family members is typically restricted to circumstances when they are occupants of the insured auto

Medical Payments, General Liability: A general liability coverage that reimburses others, regardless of fault, for medical or funeral expenses incurred as a result of bodily injury or death sustained by an accident

Mexico Coverage: Coverage which is sometimes provided under automobile policies for the operation of an insured motor vehicle within Mexico, usually limited to a stated number of miles from the U.S. border

Minimum Premium: The lowest amount of premium to be charged for providing a particular insurance coverage

Misrepresentation: The act of knowingly presenting false information.

Mobile Equipment: Equipment such as earthmovers, tractors, diggers, farm machinery, forklifts, etc., that even when self-propelled, are not considered as automobiles for insurance purposes

Monopolistic State Funds: States or Jurisdictions where an employer must obtain workers’ compensation insurance from a state fund or qualify as a self-insurer, as is allowed in five of the states: North Dakota, Ohio, Washington, West Virginia, Wyoming, Puerto Rico and the U.S. Virgin Islands

Mortality Rate: The number of deaths in a group of people, usually expressed as deaths per thousand.

Mortality Table: A table showing the incidence of death at specified age groups.

Mortgage Clause: Property insurance provisions granting protection for the mortgagee named in the policy. It establishes that loss to mortgaged property is payable to the insured and to the mortgagee named in the policy


Named Perils Coverage: A property insurance term referring to exact causes of loss specifically listed as covered

National Flood Insurance Program: A federally funded program established to make flood insurance available to properties located in participating communities National Flood Insurance Program: A federally funded program established to make flood insurance available to properties located in participating communities

Nonadmitted Insurer: An insurance company that is not licensed to do business in a specific state. The insurers may write coverage through an excess and surplus lines broker that is licensed in these jurisdictions

Nonowned Automobile: In commercial auto policies, coverage for autos that are used in connection with the named insured’s 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

Nonsubscription: A Workers’ Compensation term used in Texas that refers to employers who choose to be out of the workers’ compensation system. Firms that are proven negligent in causing a worker’s injury, can be held liable in tort, since nonsubscribing employers waive the traditional common law defenses available to employers subject to workers’ compensation laws

Original Age: The age you were when you bought an insurance policy.

Other Insured Rider: The temporary addition to an insurance policy, usually a member of the direct family.

Ownership: All rights, benefits and privileges under life insurance policies are controlled by their owners. Policy owners may or may not be the insured. Ownership may be assigned or transferred by written request of current owner.

Occupational Hazard: A condition in the workkplace that increases the chances of the an accident, sickness, or death. It usually will mean higher premiums.

Occurrence: A continual, gradual or repeated exposure to substantially the same general harmful conditions. General liability policies insure liability for bodily injury or property damage that is caused by an occurrence

Package Policy: A policy providing several different coverages combined into one policy. Refers to a policy providing both general liability insurance and property insurance

Payroll Limitation: A limit on the amount of payroll for certain classifications used for the development of premium

Peril: Cause of loss such as fire, windstorm, collision, etc.

Personal Auto Policy (PAP): A policy insuring private-passenger autos owned by individuals

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 Injury Protection (PIP): An automobile insurance coverage mandated by law in some states. The statutes typically require insurers to provide or offer to provide first-party benefits for medical expenses, loss of income, funeral expenses and similar expenses without regard to fault

Personal Property: All tangible property not classified as real property such as contents

Policy: The printed document given to the insured, outlining the terms and conditions of the Insurance coverage.

Policy Fee: A one-time charge per policy that does not change with the size of the premium

Policy Holder: The person who owns a life insurance policy. This is usually the insured person, but it may also be a relative of the insured, a partnership or a corporation.

Policy Period: The term or duration of a policy including the effective and expiration dates

Pollutant: An irritant or contaminant, whether in solid, liquid, or gaseous form, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste

Preferred Risk: A positive characterisic of someone seeking to be insured. Usually means a better likely hood for long life, and usually means a lower premium.

Premises: The location where coverage applies

Premises-Operations: A category of hazard ordinarily insured by a general liability policy which is composed of those exposures to loss that fall outside the defined ‘products-completed operations hazard,’ including liability for injury or damage arising out of the insured’s premises or out of the insured’s business operations while such operations are in progress

Premium: The agreed upon, payment made to keep an insurance policy in force, usually a monthly payment.

Premium Flexibility: The policy holder’s right to vary the amount of premium paid each

Primary Beneficiary: In life insurance, the beneficiary designated by the insured as the first to receive policy benefits.

Primary Policy: The insurance policy that pays first when you have a loss that’s covered by more than one policy.

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

Product: Items manufactured, sold, handled, distributed or disposed of by the named insured or others involved with the named insured in the course of their business. Includes containers, parts and equipment, product warranties and provision of or failure to provide instructions and warnings

Product Liability: The liability for bodily injury or property damage a merchant or manufacturer may incur as a consequence of some defect in the product sold or manufactured

Products-Completed Operations: General Liability coverage for liability arising out of the insured’s products or business operations conducted away from the insured’s premises once those operations have been completed

Professional Liability: Coverage designed to protect professionals such as physicians and real estate brokers, against liability incurred as a result of errors and omissions in performing professional services

Property Damage: In the general liability policy, a physical injury to property, resulting in the loss of use

Property Insurance: First-party insurance for real and personal property against physical loss or damage

Provisions: Details of an insurance policy which explain the benefits, conditions and other features of the insurance contract.

Real Property: Real estate including buildings and vegetation

Re-entry Option: An option in a renewable term life policy under which the policy owner is guaranteed, at the end of the term, to be able to renew his or her coverage without evidence of insurability, at a premium rate specified in the policy.

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

Renewal Policy: A policy issued to replace an expiring policy

Rents or Rental Value Insurance: Insurance that reimburses a building owner for loss of rental income due to damage by an insured peril

Replacement: A new policy written to take the place of one currently in force.

Representation: Statements made by applicants on their applications for insurance that they represent as being substantially true to the best of their knowledge and belief but that are not warranted as exact in every detail.

Return Premium: The amount of premium due the insured should the actual cost of a policy be less than the insured previously paid

Rider: An attachment to a policy that modifies its conditions by expanding or restricting benefits or excluding certain conditions from coverage.

Risk: The chance of injury, damage, or loss.

Robbery: Theft of property while force is used or threatened

Secondary Beneficiary: An alternate beneficiary designated to receive payment, usually in the event the original beneficiary predeceases the insured.

Short-Term Cancellation: Cancellation of an insurance policy prior to the expiration date in which a penalty in the form of a less than full pro-rata premium refund is allowed

Single Premium Policy: A whole life policy for people who want to buy a policy for a one-time lump sum, and then be covered for the rest of their lives without paying any additional premiums.

Special Causes of Loss Form: A cause of loss form providing coverage from all causes of loss unless specifically excluded or limited

Specified Causes of Loss Coverage: Auto physical damage coverage only for losses caused by the perils listed in the policy

Sprinkler Leakage Coverage: Coverage for property damage caused by the accidental discharge or leakage of water from automatic sprinkler systems or other fire prevention devices

Surplus Lines Insurance: Insurance written by insurers not licensed in the states where the risks are located and placed with such insurers under the surplus line laws of the various states. Before such placements can be made through specially licensed surplus line agents and brokers, state laws generally require evidence reported before some predetermined future date (‘sunset’)

Time Element Insurance: A term referring to property coverage for loss of earnings or income resulting from the inability to put damaged property to its normal use
Term Insurance: Protection during limited number of years; expiring without value if the
insured survives the stated period, which may be one or more years but usually is five to twenty years, because such periods usually cover the needs for temporary protection.
Term: Period for which the policy runs. In life insurance, this is to the end of the term period for term insurance.
Third-Party Owner: A policy owner who is not the prospective insured. The policy owner and the insured may be, and often are the same person. If for example, you apply for and are issued an insurance policy on your life, then you are both the policy owner and the insured and may be known as the policy owner-insured. If, however, your mother applies for and is issued a policy on your life, then she is the policy owner and you are the insured.
Transit Coverage: Coverage on the insured’s property while in transit from one location to another, over land

Umbrella Liability Policy: A policy designed to provide additional protection against catastrophic losses covered under liability policies, such as the business auto policy, commercial general liability policy, watercraft and aircraft liability policies and employers liability coverage. It provides excess limits when the limits of the underlying liability policies are used up by the payment of claims and it drops down and picks up where the underlying policy leaves off when the aggregate limit of the underlying policy in question is exhausted by the payment of claims. It also provides protection against some claims not covered by the underlying policies, subject to a self-insured retention

Underinsured Motorists Coverage: Provides coverage for bodily injury, and in some states property damage, for losses incurred by an insured when an accident is caused by a motorist who does not have sufficient insurance limits

Underlying Coverage: The insurance or coverage in place on the same risk that will respond to loss before the excess policy is called on to pay any portion of the claim

Underwriter: Company receiving premiums and accepting responsibility for fulfilling the policy contract. Also, company employee who decides whether the company should assume a particular risk; or the agent who sells the policy

Uninsurable Risk: A person who is not acceptable for insurance due to excessive risk.

Universal Life: An interest-sensitive life insurance policy that builds cash values. The premium payer has control over how the policy is structured. He has the flexibility to eliminate the premiums (essentially pay up the policy and pay no more premiums) or have the premiums continue for life. It is a matter of juggling three variables: the assumed interest rate, the cash value and the premium payment plan. The policy is interest-sensitive, and if interest rates change from the assumed interest, it will affect the other two variables. In the past, many Universal Life Policies were structured assuming a higher interest rate then was actually received, therefore, most of them have under performed. If you have a Universal Life Policy, you should have it evaluated to see if it needs to have the premiums adjusted to get it back on track. A fourth variable that has not been a factor but could be in the future, and the owner should be aware of, is the Mortality variable. Universal Life policies are usually structured assuming current mortality rates. The insurance companies reserve the right to change those rates.

Unearned Premium: That portion of the policy premium that represents the unexpired policy term

Uninsured Motorist Coverage: Provides coverage for bodily injury, and in some states property damage, for losses incurred by an insured when an accident is caused by a motorist who is not insured

Utility Service Interruption Coverage: Coverage for the loss to an insured due to lack of incoming electricity which was caused by damage from a covered cause of loss, such as a fire or windstorm, to property away from the insured’s premises – usually the utility generating station. Also referred to as ‘off-premises power coverage’

Vacancy Provision: Property insurance provision found in commercial property policies that restrict coverage in connection with buildings that have been vacant for a specified number of days, usually 60 days
Valuable Papers and Records Coverage : Coverage that pays the cost to reconstruct damaged or destroyed valuable papers and records and usually includes almost all forms of printed documents or records except money or securities; data processing programs, data and media are usually excluded
Waiver of Premium: Rider or provision included in most life insurance policies exempting the insured from paying premiums after he or she has been disabled for a specified period of time, usually six months.
Waiver of Subrogation: Also known as ‘transfer of rights of recovery,’ the relinquishment by an insurer of the right to collect from another party for damages paid on behalf of the insured
Whole Life Insurance: Life insurance that is kept in force for a person’s whole life as long as the scheduled premiums are maintained. All Whole Life policies build up cash values. Most Whole Life policies are guaranteed as long as the scheduled premiums are maintained. The variable in a Whole life Policy is the dividend which could vary depending on how well the insurance is doing. If the company is doing well and the policies are not experiencing a higher mortality than projected, premiums are paid back to the policy holder in the form of dividends. Policyholders can use the cash from dividends in many ways. The three main uses are: it can be used to lower or vanish premiums, it can be used to purchase more insurance or it can be used to pay for term insurance.
Workers’ Compensation: Protection which provides benefits to employees for injury or contracted disease arising out of and in the course of employment. Most states have laws which require such protection for workers and prescribe the length and amount of such benefits provided
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