Type of Losses for Insurance Claims

A loss is the basis of a claim for damages under the terms of an insurance policy. Types of covered losses can be broken down by commercial versus personal insurance, then by line of business (LOB), then further by type of loss (TOL). Some terms used in the insurance industry for types of loss do not necessarily correspond to the descriptions used by laymen. Therefore, standard insurance policies with few exceptions have a definitions page in the front.

Liability

Liability coverage applies to situations in which someone other than the insured is injured. Property damage covers injury to the injured party's own property. "Bodily injury" refers to damage to the injured party's person. "Personal injury" refers to damage to a person's character or reputation. "Medical payments" refers to payment for minor medical expenses of the injured party. Part of the aim of this part of coverage is to generate goodwill in the injured party, reducing the chance of an expensive liability loss. "Medical malpractice," or "medmal," is loss coverage offered to medical professionals. Other examples of professional liability types are Errors & Omissions (E&O), Directors & Officers (D&O), and Employment-Related Practices Liability (ERPL). Examples of ERPL losses are employment discrimination and wrongful termination. E&O covers liability for financial losses, such as those due to employee embezzlement.

Auto

Auto insurance losses can include liability (both bodily injury and property damage), collision, theft, fire, vandalism and glass breakage. No-fault insurance will cover medical, funeral and property expenses for pedestrians and drivers you hit, instead of providing liability coverage.

Property

Property insurance can cover homes, apartments, apartment contents, vehicles, art, and so on. Homeowners insurance can be broken down further by flood, hurricane, vandalism, theft, fire and lightning, water damage, and wind and hail.

Health

Health insurance TOLs include pharmaceuticals, dental, vision, disability, income loss, and mental health, among others. "Catastrophic losses" refer to large medical bills, for example for multiple operations. "Long-term care" refers to hospice care or at-home nursing. Worker's compensation losses are health-related but are incurred on the job site.

Life

Life insurance policies pay out in the event of the named insured's death. The insured names the beneficiary in the policy. Payments tend to be in a lump sum.

Marine

Marine insurance covers commercial losses during transport. Inland marine insurance refers to transport over land.

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