Glossary-E

Early Warning System: A regulatory tool, like IRIS, that uses financial ratios to identify potentially unstable insurance companies.

Earned Premium: The portion of a prepaid insurance premium that corresponds to the coverage period that has already passed.

Earthquake Insurance: A separate policy or endorsement covering damage from earthquakes, typically with high deductibles.

Economic Loss: The measurable financial impact of death, injury, or property destruction, excluding emotional or non-economic damages.

Electronic Commerce (E-Commerce): The buying and selling of insurance products over the Internet.

Elimination Period: A waiting period in disability insurance before benefits begin, functioning like a deductible measured in days.

Employee Dishonesty Coverage: Insurance that protects a business from financial losses due to dishonest acts by employees.

Employee Retirement Income Security Act (ERISA): A federal law setting minimum standards for private employee benefit and pension plans.

Employer’s Liability: Part of workers’ compensation insurance that covers employer liability in lawsuits filed by injured employees.

Employment Practices Liability Coverage: Insurance for claims of wrongful employment actions like discrimination or harassment.

Endorsement: A written amendment to an insurance policy that changes its terms or coverage—also called a rider.

Environmental Impairment Liability Coverage: Insurance for pollution-related property damage or cleanup liability.

Equity: Ownership interest in a company, usually in the form of stocks.

Equity Indexed Annuity: A type of annuity that guarantees a minimum return but also credits interest based on a stock market index like the S&P 500.

Errors and Omissions (E&O) Coverage: Professional liability insurance for claims of negligence or mistakes in service.

Escrow Account: A lender-managed account holding funds for insurance premiums and property taxes, paid alongside mortgage payments.

Excess and Surplus Lines: Insurance coverage from non-admitted carriers when standard, licensed insurers do not offer the needed coverage.

Excess of Loss Reinsurance: A reinsurance arrangement where the reinsurer pays amounts exceeding the insurer’s retained loss threshold.

Exclusion: A policy provision that removes coverage for certain risks, individuals, or properties.

Exclusive Agent: An insurance agent who represents and writes policies only for one insurance company.

Exclusive Remedy: A workers’ compensation principle where employees give up the right to sue in exchange for guaranteed benefits.

Expense Ratio: The percentage of premium income spent on operating costs like administration, sales, and commissions.

Experience: The loss history or claims record of a policyholder or group.

Exposure: The potential risk or likelihood of a loss occurring.

Extended Coverage: Additional coverage added to a basic policy through an endorsement.

Extended Replacement Cost Coverage: Insurance that pays above the policy limit—typically 120% or 125%—to rebuild a home after major damage.

DISCLAIMER: The definitions provided in this glossary are intended to offer a general understanding of common insurance terms used within the industry. They may not apply in all states or to every insurance or financial product. This resource is for informational purposes only and does not constitute an insurance contract. Coverage terms, conditions, and exclusions vary—please consult your actual Parkway Insurance Group policy documents for complete details. In the event of any discrepancies between these definitions and your official policy, the policy provisions will take precedence. This content does not replace or fully explain the rights and obligations of policyholders, insurance agents, or insurance carriers. For questions about your specific coverage, please contact Parkway Insurance Group directly or refer to your policy language.
Glossary information has been adapted from trusted industry sources, including III.org (the Insurance Information Institute).