• The Basic Extended Reporting Period (BERP) is the 60-day and 5-year Extended Reporting Periods (ERP) automatically provided to policyholders by the 1986 Insurance Services Administration, Inc. (ISO), commercial liability claims policy (CGL). when the claimed policy is canceled, not renewed, renewed with a laser exemption, renewed on a basis other than the application, or renewed at a later date. BERPs are also included in some professional liability claims policies. In professional liability policies, BERPs extend the reporting period by 30 to 60 days at no additional charge when the insurer cancels or does not renew the policy. In some cases, they are offered when the insured cancels or does not renew the policy.

  • The base premium is a component of insurance and administrative costs; amounts needed to adjust for expected losses (see Unallocated Loss Adjustment Expenses (ULAE)). It is added to the net premium to get the standard premium. In life insurance, the base premium also includes the agent’s commission.

  • The base rate is the manual rate shown in the insurer’s rate guide at the base limits, before adjusting for factors such as an increased liability limit. The term has become somewhat obsolete in relation to rating guidelines published by independent rating organizations since the introduction of cost-of-loss ratings.

  • Base points are a way of expressing base 100 increments of measurement between percentage points. For example, 50 basis points is equal to half of 1 percent; 200 basis points equals 2 percent. Assignment fees, collateral value and other quantities used in insurance and reinsurance contracts may be expressed in basis points.

  • The underlying risk is the difference between an index and a specific portfolio of losses (based on that index) as the underlying hedge basis. For example, Insurer A’s loss portfolio will not be the same as the index used to price the security purchased to hedge the loss portfolio. Basis risk is the result of imperfect hedging.

  • A basket deductible is a basket deductible that is a single retained limit designed to fund losses from multiple risks. For example, property and general liability represent completely different risks of loss. The traditional (and still the most common) method of allocating these risks between retention (franchise) and transfer (insurance) is to separate the individual risks, where each risk is assessed separately without regard to the other. The deductible basket amount combines the risk profiles of each risk into a single deduction amount. In theory, because the risks are completely different, they tend to offset each other, requiring less funding. In other words, the whole is less than the sum of its parts.

  • The basket hold is used in connection with self-insurance. Excess liability insurance, which is applied after sustaining losses under multiple lines of coverage (such as workers’ compensation and general liability), reaches a certain prescribed level.