Glossary E 

E&O Errors and omissions.

EPL (or EPLI) See Employment Practices Liability Insurance.

ERISA See Employee Retirement Income Security Act.

earned premium The portion of the premium that represents coverage already provided. For example, if you paid $600 for a six-month automobile insurance policy one month ago, the earned premium on the policy is $100 (or 1/6 of $600).

effective date The date upon which the insurance policy goes into effect.

elimination period The time interval (waiting period) between events specified in the policy. Examples include the time between the occurrence of a disability and when the first benefit is paid and the time between the issue date of a health insurance policy and the date when certain coverages become effective.

embezzlement The fraudulent use of money or property that has been entrusted to one's care.

Employee Retirement Income Security Act (ERISA) Legislation applying to most private pension and welfare plans that requires certain standards (for funding, participation, vesting, termination, disclosure, fiduciary responsibility, and tax treatment) to protect participating employees.

Employment Practices Liability (EPL) Insurance A specialized form of insurance specifically designed to protect against loss incurred in litigating and settling wrongful employment practices-liability claims. This is also commonly called "EPLI."

encumbrance Any outside interest in property, such as a mortgagee or conditional sales contract.

endorsement A written provision that adds to, deletes, or modifies the provisions in the original contract.

endowment A life insurance contract which provides for the payment of the face amount at the end of a fixed period, or at a specified age of the insured, or at the death of the insured before the end of the stated period.

estoppel A legal doctrine that prevents a person from denying the truth of a previous representation of fact, especially when the representation has been relied on by the one to whom the statement was made.

evidence of insurability Any information concerning the proposed insured required to satisfy underwriting standards, such as a medical examination or physician's statement.

excess insurance Coverage which becomes available to the insured only above a stipulated amount of loss, or only after any other applicable insurance has been exhausted.

excess interest The difference between the rate of interest the company guarantees to pay on proceeds left under settlement options and the interest actually allowed on such funds by the company.

exclusion Something not covered by the policy and specifically so stated in the policy contract.

exclusions The section of the policy contract that specifies the losses not protected by the policy.

expected mortality The number of deaths which theoretically should occur among a group of insured persons during a given period according to the mortality table in use.

expense constant A flat amount sometimes imposed in workers' compensation insurance if the estimated premium is less than the specified amount. Intended to pay the cost of issuing and servicing a small policy.

expense ratio A measure of a company's expenses that is determined by dividing the company's expenses by its written premiums.

experience This refers to the loss ratio status of a particular risk, or of a particular coverage, or of a particular carrier, etc. over a specified period of time.

experience modification A percentage increase or reduction in rates produced by application of the experience rating plan.

expiration date The date on which coverage ceases; exact dates and times vary by policy.

expiry The end of coverage under a term life insurance policy at the end of its stated term period.

exposure unit A unit of measurement used in insurance pricing; it varies by line of insurance.

extended coverage endorsement An endorsement added to the standard fire policy giving protection against windstorms and hail; explosions; riots; civil commotion; and damage caused by aircrafts, vehicles and smoke.

extended reporting period Also know as a "tail;" the period of time allowed for making claims after a claims-made liability policy expires.

extended term insurance One of the nonforfeiture options contained in most whole life and endowment policies; it provides that the policy owner may elect to have the cash surrender value of the policy used to extend the coverage for whatever term period the cash value will purchase.

extra expense coverage This protects the policyholder against the extra expense that may be involved in carrying on his/her business after the occurrence of a loss. For example, if a newspaper plant was damaged by fire, the publishing company might have to get their paper published by a rival plant until their own could be restored. Thus, they could carry on their business, but at extra expense to themselves.