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Loss in Excess of Policy Limits

An amount of loss which exceeds the original policy limits, but is otherwise covered under the policy, for which the insurer is potentially responsible by reason of its action or omissions, including failure to settle within the policy limits, in defending the insured under the policy. Typically an Excess Policy Limits loss is awarded by a court after an insured brings suit against its insurance carrier.

Loss In Progress Rule

Insurance can only indemnity an insured against risks of loss that are both unknown and unexpected. If a loss is already in progress at the time the policy is acquired the loss is no longer fortuitous but a rather a certainty. The Loss in Progress Rule prohibits recovery for a non-fortuitous loss.

Loss limit

Commonly used in financial institution bonds, a loss limit is the aggregate amount that will be paid out under the coverage during the policy term. Loss limits also may be used when insuring large property risks where the exposures are spread out geographically. In this type of situation, it is unlikely that all property would be damaged by a single occurrence. Therefore, the amount of insurance may be set at a loss limit per each covered occurrence.

Loss Limitation

Another term used in retrospective rating formulas. It is designed to limit the effect of catastrophic losses that would otherwise be considered in full in figuring in the final retrospective premium.