Impairment of capital is a situation in which the insurer’s excess equity account is in danger of being depleted and the insurer intrudes into its equity account to pay off liabilities. Some jurisdictions allow this, but most do not.
Implied powers are the actions of an agent that may go beyond the rights and powers expressly provided for in the agency agreement. If these actions do not lead to a response from the insurer, the powers are expanded, as if they were subject to an agency agreement.
An implied warranty is a legal understanding that a particular product is safe and suitable for a particular use, when the seller knows at the time of sale what the product is intended for.
Improvements and enhancements are permanent additions or changes made to a building by a tenant at their own expense that cannot be legally removed. Property policies differ depending on whether improvements and tenant enhancements are in the building category or in the contents category, so care must be taken to assign these values to the appropriate category of covered property.
In Rem Endorsement is an acknowledgment of Workers’ Compensation coverage that expands coverage of claims filed against the value of a vessel by an injured crew member seeking damages. The unseaworthy condition of the ship must be indicated in the claim as the immediate cause of the damage. In the absence of this endorsement, a claim in rem may result in an injunction preventing the ship from leaving the port until the claim is settled. In rem coverage is now part of the marine coverage approval, rather than a separate approval.
In-Force Business is the total dollar amount of paid and current insurance policies that a life or health insurer maintains on its books. The active business of a life insurance company is the sum of all the denominations of policies in its portfolio. The operating business of a health insurance company is its total premiums. The size of life and health insurance companies is usually measured by their operating business.
The inadequate review exception is an exception contained in some directors and officers (D&O) liability policies, especially those written for public companies. After the purchase of one corporation by another, the shareholders of the acquired entity take legal action from time to time, alleging that the purchase price paid by the buyer amounts to and thus the price received by the shareholders of the acquired company was too low. In other words, claims of inadequate review are based on the representation of shareholders in the acquiree that they have not received fair compensation for their shares. Thus, lawsuits require compensation, which is the difference between what the acquiring company paid for a share and what the shareholders of the acquired company thought their shares were actually worth. The inadequate recovery exception is also known as the “upgrade” exception, meaning that the agreed purchase price must be “upped” to an amount deemed fair by the acquiree’s shareholders.