Bailee:
One who has temporary possession of property belonging to another.

Balance Sheet:
Provides a snapshot of a company’s financial condition at one point in time. It shows assets, including investments and reinsurance, and liabili­ties, such as loss reserves to pay claims in the future, as of a certain date. It also states a company’s equity, known as policyholder surplus. Changes in that surplus are one indicator of an insurer’s financial standing.

Basic Form:
A package insurance policy providing coverage against a limited number of specified perils.

Beach and Windstorm Plans:
State-sponsored insurance pools that sell property coverage for the peril of windstorm to people unable to buy it in the voluntary market because of their high exposure to risk. Seven states (AL, FL, LA, MS, NC, SC, TX) offer these plans to cover residential and commercial proper­ties against hurricanes and other windstorms. Georgia and New York provide this kind of coverage for windstorm and hail in certain coastal communities through other property pools. Insurance companies that sell property insurance in the state are required to participate in these plans. Insurers share in profits and losses. (See Fair Access to Insurance Requirements Plan–FAIR Plan; Residual Market.)

Beneficiary:
Any person, institution, trust, etc., named in a life policy to receive the policy benefits upon the death of the insured.

Binder:
A written or oral contract issued temporarily to place insurance in force immediately prior to issuance of a new policy or endorsement of an existing one. A binder is subject to payment of the premium and provides coverage under the terms of the policy to be issued, unless other­wise specified.

Blanket Coverage:
A blanket form is one under which property is insured under a single amount applying to several different pieces of property rather than a specific amount of insurance on each property.

Block Policy:
An inland marine policy covering all property on or off a merchant’s premises, including property of others in the care, custody or control of the policyholder.

Bodily Injury Liability Insurance:
This coverage protects an insured against legal liability for injury to another person arising from an accident.

Boiler and Machinery Insurance:
A form of property coverage for loss arising out of the operation of pressure, mechanical and electrical equipment. It may cover loss to the boiler and machinery itself and business interruption losses.

Bond:
A security that obligates the issuer to pay interest at specified intervals and to repay the principal amount of the loan at maturity. In insur­ance, a form of suretyship. Bonds of various types guarantee a payment or a reimbursement for financial losses resulting from dishonesty, failure to perform and other acts.

Bond Rating:
An evaluation of a bond’s financial strength, conducted by such major ratings agencies as Standard & Poor’s and Moody’s Investors Service.

Book of Business:
Total amount of insurance on an insurer’s books at a particular point in time.
Broad Form:
A package policy providing coverage for the same perils covered in the basic form, plus specified additional perils.
Broker:
A representative of the buyer of property and liability insurance who deals with either agents or companies in arranging for the coverage required by the customer. A broker is paid a commission by the company or its agent.

Burglary:
The loss of property due to theft when there is visible evidence of forcible entry to the exterior of the building.

Burglary and Theft Insurance:
Insurance for the loss of property due to burglary, robbery or larceny. It is provided in a standard homeowners policy and in a business mul­tiple peril policy.

Business Income Insurance (Business Interruption Insurance):
Commercial coverage that reimburses a business owner for lost profits and continuing fixed expenses during the time that a business must stay closed while the premises are being restored because of physical damage from a covered peril, such as a fire. Business interruption insurance also may cover financial losses that may occur if civil authorities limit access to an area after a disaster and their actions prevent customers from reaching the business premises. Depending on the policy, civil authorities coverage may start after a waiting period and last for two or more weeks.

Businessowners Policy (BOP):
A policy that combines property, liability and business interruption coverages for small- to medium-sized businesses. Coverage is generally cheaper than if purchased through separate insurance policies.

Business Interruption Insurance:
See Business Income Insurance.

Buy-Out Policy:
A professional liability policy covering future claims resulting from incidents which occurred during the period that an expired claims-made policy was in force.