L

Lapse: Termination of a policy due to the policy owner’s failure to pay the premium within the grace period.

Leasehold Interest: Property insurance covering the loss suffered by a tenant due to termination of a lease because of damage to the leased premises by a covered loss

Lessee: The person to whom a lease is granted

Lessor: The person granting the lease

Liability: The legal obligation to pay a monetary award for injury or damage caused by one’s negligent or statutorily prohibited action

Liberalization Clause: A provision within an insurance policy that broadens the coverage if the insurance company offers a broader coverage form within the first 45 days of coverage

Lien: An obligation that can be held by an individual who has an interest in a particular matter or property

Life Expectancy: The average number of years a person is expected to live based on a national average per age group, and other factors.

Life Insurance: Insurance coverage that pays out a set amount of money to specified beneficiaries upon the death of the individual who is insured.

Limit of Liability: The most an insurance company agrees to pay in the case of loss

Limited Pay Policy: A type of whole life insurance designed to let the policyholder pay higher premiums over a specific time period such as 10 or 20 years so that they won’t have to pay any premiums for the rest of his or her life.

Longshore and Harbor Workers’ Compensation Act: A federal law that provides workers’ compensation benefits to employees of a vessel injured in maritime employment – usually in loading, unloading, repairing or building a vessel – but not applicable to crew members

Loss: The amount an insurance company pays for damages under the terms of a policy

Loss Adjustment Expense: The cost assessed to a particular claim for investigating and adjusting that claim

Loss Constant: A flat charge added to the premium of small workers’ compensation policies to offset higher loss ratios

Loss Control: A technique that is put in place to reduce the possibility that a loss will occur or reduce the severity of those that do occur

Loss Payable Clause: An insurance clause that authorizes loss payments to a person or entity having an insurable interest in the covered property

Loss Ratio: Percentage of losses incurred against earned premiums

Loss Report: A form showing reported claims which provides information such as the date of occurrence, type of claim, amount paid and amount reserved for each loss

Loss Reserve: An estimated amount set aside for a particular claim that has not yet been paid

Lost Policy Release: A signed statement by the named when the insured wishes to cancel the policy, but has lost or mislaid the policy, which releases the insurance company from all liability or losses