Exclusion often inserted into general liability Insurance for a firm engaged in blasting, excavating, grading of land, pile driving and similar pursuits that excludes coverage of liability for property damage arising from explosion, collapse, and damage to underground property (such as foundations, pipes and the like). This exclusion is designed to encourage Insureds facing these special exposures to purchase separate coverage.
Tag: RAW
Collapse of Stacks for Damages in Transit
Mainly caused due to improper method of un-stowing. Workers may dig into the stacks at the lower tiers instead of removing progressively the cargo from the top layers. Also when cargo meant for a particular port is discharged, the adjacent cargo stacks meant for subsequent ports, may collapse if not properly secured or lashed.
Collapse risk
A construction/demolition term referring to damage to property caused by the removal or weakening of support accorded to any land, building or structure. The risk is excluded under the liability sections of contractors’ all risks and erection all risk policies but can be bought back subject to a hefty excess and the exclusion of the contract works.
Collar
Combination of put options and call options used, for example, by energy producers and end users to hedge against extreme price movements by keeping price within a defined range. The downside risk is limited at the cost of the upside potential. If price falls below the ‘floor, the end user pays the energy company under the contract. If the ceiling’ is exceeded the energy company pays the end user.
Collateral
Any possession such as an automobile, furniture, stocks, or bonds that secures or guarantees the discharge of an obligation.
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UK: The security offered by a borrower for a loan. Life insurance policies that have acquired a surrender value are often acceptable as collateral security.
Collateral assignment
Transfer of some ownership rights in an insurance contract from one individual to another, sometimes for a temporary period. An insurance policy can be assigned as collateral for a loan, in which case all transferred rights revert to the assignor when the loan is repaid. Also called collateral loan. See absolute assignment or assignment.
Collateral assignment (Life Insurance)
Use of a life insurance policy to secure a loan. Should the policyholder default on the loan, the creditor could recoup the interest on the loan from the policy.
Collateral creditor
A person who has been appointed the rights to a benefit.
Collateral dependents
Individuals made eligible for dependent insurance coverage for a group policy by expanding the definition of dependent (e.g., parents, grandparents, brothers, sisters, or others that depend on the insured for the main part of their financial support).
Collateral loan
See: collateral assignment.