A term used in surety bonds to refer to the individual or firm bound by an obligation. Also known as the principal.
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Commonly called “principal,” one bound by an obligation. Under a bond, strictly speaking, both the principal and the surety are obligers.
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The person who has engaged to perform some obligation, one who makes a bond; the bonding company.
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UK: The person, also called the principal, giving the bond to the obligee. In a performance bond it is the contractor, i.e. the party bound under the bond.
Tag: RAW
Obligor (Surety)
Also called the principal. The person who is bound by an obligation.
Obsolescence
Impairment of desirability and usefulness brought about by changes in public preference or by forces in addition to those which cause deterioration.
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When something is no longer useful or has any value.
Obsolete parts clause
Clause applied by motor insurers when the subject-matter insured is a car no longer in production. The clause limits the liability of the own damage insurer for the cost of replacing any unobtainable part to the maker’s last list price plus the current cost of fitting.
Occupancy
In general, a condition affecting the desirability of property policies. Properties that are unoccupied are more susceptible to theft, vandalism, and other losses. A property that is unoccupied has furnishings, appliances etc., just no human occupants.
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The type and character of the use of property. It plays a very important part in computing rates in determining the acceptance or rejection of risks.
Occupancy (Property Insurance)
The use of a property. A property’s use can affect the rate assigned to the policy.
Occupancy Permit
An endorsement on an Insurance Policy permitting occupancy which might otherwise suspend the contract or make it invalid.
Occupation
Occupation means vocation, profession, trade or calling in which the insured is engaged for reward or profit. Where there is an exclusion relating to particular occupations in a health or accident policy this does not preclude the insured from carrying out acts or duties connected with the ordinary daily acts associated with occupations in general. Occasional acts do not amount to an occupation (Berliners v. Travelers Insurance Co. (1898)). See DISABILITY.
Occupational accident
An accident caused by a person’s employment, or that takes place while doing one’s job.
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An accident occurring in the course of one’s employment and cause by inherent or related hazards.
Occupational classes
A method of rating whereby the usual premium is based on the insured’s occupation. This is underwriting by occupation, and is used in personal accident insurance where as many as five occupational classes segment risks according to the degree of hazard present in the occupation. Extra-hazardous occupation calls for special consideration. Occupational underwriting lies at the heart of many insurance schemes, e.g. motor insurance for civil servants.