Glossary Index

Glossary on General Insurance Terms starting with O


OBSOLESCENCE : Procedure whereby the property becomes unusable not due to physical deterioration but due to modifications outside the property, like technological or scientific advances

OCCUPANCY AND FIRE RATES : Direct relation between use of premises that it is put to and the possibility of its exposure to fire; occupancy of building is primary factor for determining the fire cover premium rate

OCCUPATIONAL DISEASE : Disease contracted due to exposure to certain harmful conditions on the job; coverage for these is available under workers compensation plan

OCCUPATIONAL HAZARDS : Occupations that expose the insured to physical damage that is larger than normal due to nature of the work and the difference periods of absence from the occupation due to expected disability

OCCURRENCE : Event resulting in bodily injury or property damage to any third party; for liability insurance plans all claims for such injuries or damages relating to 3rd parties arising from one event is treated cumulatively while applying the insurance company's maximum liability related to the single occurrence

OCCURRENCE BASIS POLICY : Liability insurance plan covering claims that arise due to any event/s during the policy duration irrespective of when these are filed

OCCURRENCE LIMIT : Maximum liability of the insurance company of all claims that are related to the occurrence of a single event

OFF DUTY COVERS : Personal accident insurance coverage for individuals during restricted hours when s/he is not at work or on official duty; premium charged for such policy is 50% chargeable for 24-hours coverage

OFFER : Manifestation of willingness for entering into a contract or agreement

OFFER AND ACCEPTANCE : An essential element in contracts for making these legally binding; applies to insurance contracts too; contract is completed by the acceptance of one party of an offer made by the other party

OPEN COVER : Agreement where the assured undertakes to declare each item that is within the scope of the coverage in the order in which the risks are attached; at the time of concluding the contract insurance company agrees to accept all valid declarations to pre-agreed limit for every declaration; it may be open for certain period or forever based on the cancellation clause

OPTIONALLY RENEWADLE CONTRACT  : Health insurance contract where the insurance provider reserves termination right of the coverage at any time or in certain cases at the time when premium is due but has right for terminating cover between such dates

OCEAN MARINE INSURANCE : Insurance cover for sea-going vessels including all liabilities related to these and the cargoes

OPERATING RATIO : Sum of expenditures and losses expressed as certain percentage of the earned premiums

ORDINARY LIFE : Same as straight or whole life; terms are applicable to policies that continue during the entire life of the insured and providing the insured amount at the time of demise

OVERHEAD EXPENSE INSURANCE : Special health insurance plan designed for helping the offset of overhead expenditures like rent, utility bills, employees' salaries, auditors' fees incurred during disability; monthly payments during this period is not fixed as an amount of indemnity on regular disability insurance; but is the actual overhead amount incurred or percent thereof up to specified limit in the insurance contract

OVERHEAD INSURANCE : Method of purchase and sale of securities that are not listed on public stock exchanges, negotiated through computers or telephonically

OVER-THE COUNTER MARKET  : Commission payable to general agents or agencies' managers that is in addition to the commission paid to soliciting broker or agent

OBLIGEE : Any person in whose favor an obligation runs; term is often used in surety bonds where it refers to an individual, corporation, or firm protected through the bond

OBLIGOR : Also known as principal, an individual bound by obligation; under bond strictly implies both principal and surety as obligors

OCCUPANCY : Type and character of the usage of the property in discussion

OVERAGE : Additional chargeable premium on cargo open cover declaration due to the carrying vessel