Lapsed Policy A life or health insurance policy terminated as a result of non payment of a premium before the end of the grace period.
Law of Large Numbers The theory of probability on which the business of insurance is based. Simply put, this mathematical premise says that the larger the group of units insured, such as sport-utility vehicles, the more accurate the predictions of loss will be.
Legal Expense Insurance Insurance to reimburse policyholders for legal fees incurred for defense from lawsuits involving areas of civil law not covered by standard liability insurance.
Liabilities An insurance company
Liability Insurance Provides protection for the insured against loss arising out of his/her legal liability to third parties.
Liability Limits The stipulated sum or sums beyond which an insurance company is not liable to protect the insured.
License Certification issued by a state
Limit The maximum amount of benefits that an insurer agrees to pay in the event of a loss.
Line A type or kind of insurance.
Liquidation Enables the state insurance department as liquidator or its appointed deputy to wind up the insurance company
Liquidity The ability and speed with which a security can be converted into cash.
Liquor Liability Coverage for bodily injury or property damage caused by an intoxicated person who was served liquor by the policyholder.
Litigation The process of a lawsuit.
Lloyd A marketplace where underwriting syndicates, or mini-insurers, gather to sell insurance policies and reinsurance. Each syndicate is managed by an underwriter who decides whether or not to accept the risk. The Lloyd
Lloyds Corporation formed to market services of a group of underwriters. Does not issue insurance policies or provide insurance protection. Insurance is written by individual underwriters, with each assuming a part of every risk. Has no connection to Lloyd
Long-term Care Insurance Coverage that, under specified conditions, provides skilled nursing, intermediate care, or custodial care for a patient (generally over age 65) in a nursing facility or his or her residence following an injury.
Loss A reduction in the quality or value of a property, or a legal liability.
Loss Adjustment Expenses The sum insurers pay for investigating and settling insurance claims, including the cost of defending a lawsuit in court.
Loss Control Representative Insurance company employees, also called safety engineers, that perform loss control surveys or inspections, and prepare written loss control reports that outline their findings.
Loss Control Service Engineering or inspection service which assists the insured in reducing its exposure to loss.
Loss Costs The portion of an insurance rate used to cover claims and the costs of adjusting claims. Insurance companies typically determine their rates by estimating their future loss costs and adding a provision for expenses, profit, and contingencies.
Loss Expense Salaries and other expenses incurred in connection with the operation of a claims department of a property and liability insurance carrier which cannot be charged to individual claims.
Loss Exposure The possibility that a loss may occur.
Loss of Use A provision in homeowners and renters insurance policies that reimburses policyholders for any extra living expenses due to having to live elsewhere while their home is being restored following a disaster.
Loss Ratio In property and liability insurance, the percent that losses bear to premiums for a given period.
Loss Reserve The estimated liability on an insurer
