Risk Management/Loss Control

We want to partner with you to reduce the likelihood of accidents, losses and claims. Your biggest asset and desire as a business owner is peace of mind. Here at McDonald Insurance Agency, we have your back. We have loss control resources available to assist you and can help you understand some of the risks and exposures to your business. We are available to meet with you and discuss how you can take measures to reduce and mitigate damage, injuries, losses and claims.

Check out the numerous resources available on this page to help you reduce risks.

Insurance Definitions and Terms

The definitions appearing in this Glossary are provided solely for general informational purposes. They are not intended to be complete descriptions of all terms, conditions and exclusions applicable to the products and services defined. Also, in the case of any inconsistency between the definitions in this Glossary and the definitions appearing in the actual insurance policy, the definitions contained in the actual policy shall govern.


  1. AActual Cash Value (ACV)

    “Actual Cash Value” is the replacement cost of property damaged or destroyed at the time of loss with deduction for depreciation. Actual cash value cannot exceed the applicable limit of liability shown in the declarations of the policy, nor the amount it would cost to repair or replace such property with material of like kind and quality within a reasonable amount of time after a loss.

  2. Additional Insured

    An individual or entity that is not automatically included as an insured under the policy of another, but for whom the named insured’s policy provides a certain degree of protection. An endorsement is typically required to get additional insured status. The named insured’s impetus for providing additional insured status to others may be a desire to protect the other party because of a close relationship with that party (e.g., employees or members of an insured club) or to comply with a contractual agreement requiring the named insured to do so (e.g., customers or owners of property leased by the named insured).

  3. Additional Named Insured

    An individual or entity, other than the first named insured, identified as an insured in the policy declarations or an addendum to the policy declarations. Such an individual or entity would have the same rights and responsibilities as an individual or entity named as an insured in the policy declarations (other than those rights and responsibilities reserved to the first named insured only).

  4. Annual Aggregate

    The maximum dollar amount that can be paid under a policy during a one-year period.Special Form – Causes of Loss This coverage protects covered property against direct physical loss arising from any cause not specifically excluded. The advantage of this form is that the insurance company must prove that a loss is specifically excluded in order to deny coverage under the policy.

  5. Abuse or Molestation Coverage

    This coverage protects you and your employees against claims alleging actual or threatened abuse or molestation as specified in the form.

  6. Actual Loss Sustained Without Dollar Limit

    This coverage insures against loss of business income and resulting extra expenses that arises from a suspension of your business from a covered loss up to the number of months specified in the form. There is no specific dollar limit and no coinsurance clause applied to claims covered under this type of coverage.

  7. Automobile Policy

    This policy can provide a combination of liability and physical damage protection for vehicles owned, maintained or used by you. Additional coverages such as medical payments and uninsured motorist protection can be added to customize the policy to fit your particular needs.

  8. Automobile Liability

    This coverage protects against claims alleged for bodily injury and property damage arising from the ownership, maintenance or use of any covered auto.

  9. Automobile Medical Payments

    This coverage will reimburse, without regard to your liability, all reasonable medical expenses incurred by persons as a result of bodily injury sustained by accident as defined in your policy.

  10. Automobile Physical Damage

    This coverage protects the covered vehicle itself. It pays for physical damage loss that results from a covered peril.

  11. Automobile Uninsured/Underinsured Motorist

    Uninsured and Underinsured Motorist coverage protects you and your passengers against bodily injury expenses if you are hit by another driver who has no automobile liability insurance or has less than the minimum limits required by your state.

  12. BBailee

    An individual or business that has been given temporary custody of another’s property for the purpose of providing a service.

  13. Binder

    Written acknowledgement that insurance applied for is in force, whether or not the premium had been paid or the policy issued.

  14. Blanket Property Coverage

    Blanket insurance can provide coverage under a single limit for the following:
    • Two or more items (i.e. Building or Contents)
    • Two or more locations (i.e. Location A and/or location B)
    • A combination of items and/or locations

  15. Boiler and Machinery Insurance (Equipment Breakdown)

    Even if you do not own a boiler, you may need this coverage. The term “boiler and machinery insurance” is gradually being replaced with terms such as “equipment breakdown” or “mechanical breakdown” coverage. This insurance provides coverage against the sudden and accidental breakdown of boilers, machinery or equipment, including computer systems and telephones/communication systems. Coverage usually includes reimbursement for property damage, expediting expenses (e.g., express transportation charges), and business interruption losses.

  16. Builders Risk Coverage

    Are you a contractor or an owner with new construction? This coverage provides property insurance for buildings in the course of construction. Depending on the policy, this coverage can be for either the building’s value at the time of loss or its full value at the time of completion.

  17. Buildings

    This coverage provides protection for permanent structures listed on the policy. Completed additions, permanently-installed fixtures, machinery and equipment, outdoor fixtures, owned personal property used to service, repair or maintain the building and additions under construction or repair are allincluded in this definition. Various additional endorsements and extensions can also be added to ensure that adequate protection is being provided for your particular situation.

  18. Building Ordinance Coverage

    Provides coverage when a community has a building ordinance stating that when a building is damaged to a specified extent (usually 50%), it must be completely demolished and rebuilt in accordance with current building codes rather than repaired. Special attention is required when establishing the amount of insurance.

  19. Business Income Including Extra Expense

    This coverage insures against loss of business income (including any continuing normal operating expenses) that you sustain due to the necessary slow down or cessation of your business operations. To be covered the interruption must be caused by a direct physical loss of or damage to property at the premises described in your policy and for which a business income limit of insurance is shown. Under this form, extra expenses are included and rental values can be added as an option. An extended period of indemnity provision is also included to provide coverage after you resume operations until your business returns to normal levels of activities, up to the time period specified in the form.

  20. Business Interruption Insurance

    This covers the loss of earnings as a result of damage or loss of business property. Reimbursement for salaries, taxes, rents, and other expenses plus net profits that would have been earned during the period of interruption can be included.

  21. Business Personal Property/Contents

    This coverage protects personal property owned by your firm and used in your operations. Furniture and fixtures, equipment and machinery, raw stock, and finished goods all fall within this category. Various additional endorsements and extensions can also be added to ensure that adequate protection is being provided for your particular situation.

  22. CCertificate of Insurance

    A document which serves as proof of the types of coverage, amounts of coverage and policy effective dates of an insurance policy. Certificates are issued to a company or person to whom the insured is potentially liable.

  23. Certificate Holder

    A person or company to whom an insured is liable, who holds the Certificate of Insurance on the insured as proof of the in-force policy.

  24. Claims-Made Form

    A policy providing coverage only if a claim is made during the policy period. If the policy has a retroactive date a loss which occurred before that date, is not covered. This coverage provides protection for only those claims reported or first made during the policy period or during any previous period that is stated in the Prior Acts or Retroactive Date option of your policy. This option allows you to keep coverage in force under consecutive Claims-Made policies.
    (See Occurrence Coverage for comparison.)

  25. Coinsurance

    A policy may contain a coinsurance provision requiring that the limits of insurance be a minimum percentage of the insurable value of your property. If the limits of your policy are less than what is required by this provision, then any claim payment made to you may be reduced by the same percentage as the deficiency. For example, covered property worth $100,000 may require a minimum of 80%, or $80,000, of coverage for compliance with the policy’s coinsurance requirement. If only $60,000 of coverage is carried (25% less than the required $80,000), then any loss payment would be reduced by 25%.

  26. Commercial Crime Coverage

    This covers money and securities, stock and fixtures against theft, burglary and robbery both on and off the insured premises and from both employees and outsiders.

  27. DDebris Removal Coverage

    Covers the cost of removing debris after damage from fire or other covered peril that requires debris removal before reconstruction of the damaged building can begin.

  28. Deductible

    The deductible provision specifies the amount that will be deducted from any payment made to you because of a covered loss.

  29. Directors and Officers Liability

    This insurance insures against claims arising from the negligent acts, errors, or omissions alleged to have been committed by present or former directors or officers of your corporation.

  30. EEarthquake Coverage

    This coverage protects against loss due to earth movement including earthquake shocks and volcanic eruption.

  31. Electronic Data Processing Coverage

    Specialized type of insurance designed to cover your computer equipment, data systems, information storage media and expenses or income loss related to the destruction of hardware or software.

  32. Employee Benefit Plan Liability Coverage

    Protects the insured employer against claims by employees or former employees resulting from negligent acts or omissions in the administration of the insured’s employee benefits programs.

  33. Employee Dishonesty Coverage

    Employee dishonesty coverage protects an employer from financial loss due to the fraudulent activities of one or more employees. The coverage includes protection for loss of money, securities, and other property of the insured. Some schedule policies are still available, but the majority are written on a blanket basis. This provides coverage for all employees, subject to policy definition. The limit of liability is “per loss” and is applied on an “occurrence” basis. All acts involving the same employee or group of employees is considered one occurrence.

  34. Employment Related Practices Liability Coverage

    This insurance protects against lawsuits by employees alleging wrongful termination, discrimination, harassment, or other specified employment related exposures.

  35. FFiduciary Liability Coverage

    Fiduciary Liability, also known as pension trust liability, provides coverage for loss that the insured becomes legally liable to pay because of a claim made against the insured for any alleged wrongful act by such insured or by any other person for whom the insured is legally responsible. It also covers the defense costs in connection with a covered claim. The policy is written on claims made form. A wrongful act includes any violation of responsibilities, obligations, or duties imposed on fiduciaries by the Employee Retirement Income Security Act (ERISA), as well as acts, errors, or omissions in the performance of the duties of the plan administrator.

  36. Flood Insurance

    This coverage protects against loss due to water damage arising from flooding, surface water, tides, tidal waves, and the overflow of any body of water as defined in the policy.

  37. Forgery or Alternation Coverage

    This type of insurance covers losses sustained through forgery or alteration of outgoing negotiable instruments made or drawn by you, or drawn on your account(s), or made or drawn by one acting as your agent. This includes loss caused by any of the following:
    • Checks or drafts made or drawn in your name, payable to a fictitious entity
    • Checks or drafts, including payroll checks, executed through forged endorsements
    • Alteration of the amount of a check or draft

  38. GGaragekeepers Legal Liability

    Provides coverage to owners of storage garages, parking lots, etc. for liability as bailees with respect to damage to automobiles left in their custody. Coverage is contingent upon establishing liability on the part of the insured.

  39. General Aggregate Limit

    The total amount that will ever be paid by an insurance policy regardless of the number of claims made against it.

  40. Glass Coverage

    This provides coverage for glass breakage such as store windows and plate glass on office fronts.

  41. HHired, Leased, Rented or Borrowed Automobile Liability Coverage

    This coverage protects against claims alleged for bodily injury and property damage arising out of the use of vehicles leased, hired, rented, or borrowed by you while in the course of business. Note that this coverage does not apply when vehicles are leased, hired, rented, or borrowed from one of your employees or a member of your household.

  42. IIndependent Agent

    An insurance agent that is affiliated with more than a single insurance company. An independent agent is able to shop several insurance carriers for the best plan for a particular insured.

  43. Inland Marine Insurance

    Primarily covers property in transit such as from warehouse to warehouse or warehouse to retail store, as well as other people’s property left on your business premises, such as clothes left at a dry cleaning business or an employee’s personal effects left in the company locker room.

  44. Insurance Fraud

    Insurance fraud is any act or omission with the purpose of illegally obtaining a property and casualty insurance benefit. This definition encompasses the full range of fraudulent acts, from completely fabricated claims, to inflation or padding of legitimate claims, to false statements on insurance applications, to internal fraud.

  45. LLiability Limits Explained

    The PER OCCURRENCE limit is the maximum amount available for claims arising out of any one occurrence. The GENERAL AGGREGATE limit is the maximum payable amount for all claims during the policy year arising out of occurrences, except products and completed operations claims. The PRODUCTS AGGREGATE limit is the maximum amount available for products and completed operations claims.

  46. Loss Control

    Inspection and engineering work done to help remove potential causes of loss. Loss control is also referred to as safety engineering, accident prevention, accident control, or loss prevention.

  47. NNegligence

    Failure to use that degree of care, which an ordinary person of reasonable prudence would use under the given circumstances. Negligence may be constituted by acts either committed or omitted, or both.

  48. Non-Admitted/Assessable Policy

    Your choice of an insurance company should not be based totally on price or even coverage comparison. Three additional factors should be considered when making your selection. These include: (1) the stability and financial condition of the carrier; (2) whether the policy issued to you is assessable, meaning that if the company becomes insolvent you as a policy holder cannot be held liable for its outstanding debts; and (3) is the company an admitted carrier in the states where you do business.

  49. Non-Owned Auto Liability

    This coverage provides you with liability protection for autos you do not own, lease, hire, rent, or borrow while they are being used in connection with your business operations.

  50. OOccurrence Form

    This form provides coverage for claims arising out of an accident which results in bodily injury or property damage neither expected nor intended. The form covers such claims that occur during the policy period regardless of when the claim is made against you.
    (See Claims-Made Form for comparison.)

  51. Ordinance or Law Coverage

    In many jurisdictions, once a building or structure has been substantially damaged or destroyed, even if the cause of loss is covered by a property insurance policy, significant additional expenses may be incurred by the insured as a result of local ordinances or laws. An unendorsed property policy does not protect the insured for those additional costs required by law and for which the insured has no option but to comply with if he/she wishes to remain in operation at that location. Coverage may be obtained for losses that result from the enforcement of laws or ordinances which do not permit restoring property to the same condition as existed prior to damage. The endorsement available is titled: Ordinance or Law Coverage. These types of losses may result from:
    • Loss of value of an undamaged portion of the existing property that must be destroyed (not directly from a covered cause of loss) from the operation of building or zoning laws.
    • Costs of demolition of the undamaged portion of the property; AND
    • Increased expenses to:
    1. Replace the property so as to comply with current building, zoning or land use laws or ordinances.
    2. Repair the undamaged property so that it complies with current building, zoning or land use laws or ordinances.

  52. PPeril

    The cause of a loss. Examples of perils are fire, wind, an accident and acts of vandalism.

  53. Pollution Cleanup and Removal Coverage

    This is an aggregate first party coverage that applies to your expense in extracting “pollutants” from land or water at your location, if the release of the pollutants is caused by or results from a covered loss.

  54. Products Liability Coverage

    The liability for bodily injury or property damage incurred by a merchant or manufacturer as a consequence of some defect in the product sold or manufactured or the liability incurred by a contractor after he has completed a job as a result of improperly performed work. The latter described part of products liability is called Completed Operations.

  55. Professional Liability Insurance

    Liability insurance protecting professionals for loss or expense resulting from claims of mistakes, errors or omissions committed or alleged to have been committed by the insured in his professional activities.

  56. RReplacement Cost Valuation

    This loss valuation method pays for the cost to repair or replace damaged items with like kind and quality without deduction for depreciation. This is important since you could face a substantial loss if you must replace property at today’s prices but receive only the depreciated value of the property that was destroyed.

  57. Retroactive Date

    Date on a claims-made policy which triggers the beginning period of coverage prior to the effective date. A retroactive date is not required. If one is shown on the policy, any claim made during the policy period on a loss that occurred before the retroactive date will not be covered.

  58. SSurplus Lines Tax

    A tax paid by the insured on insurance placed with surplus lines carriers. It is collected by the agent and paid to the state.

  59. TTeachers/Instructors Professional Liability

    This coverage extends your General Liability policy to include protection against claims arising from your rendering or failing to render professional services as a teacher or instructor.

  60. UUmbrella Policy

    This form provides a higher limit of coverage that is excess over scheduled underlying policies. It is used in one of three ways: (1) to provide additional limits of protection over the coverage listed in your underlying schedule, (2) to act as primary coverage if your underlying limits are exhausted, and (3) to provide coverage for some risks, subject to a retention, when your primary coverage does not.

  61. WWater Damage Coverage (Excluding Flood)

    This coverage protects against loss to covered property that arises from: (1) water backing up in a sewer or drain, (2) other water related damage as specified in the coverage.

  62. Workers Compensation

    Provides medical and disability coverage for on-the-job injuries or work related injuries. Benefits can include lost wages, medical expenses and permanent disfigurement/disability payments; Also provides Employer’s Liability coverage, protecting the company from an injured employee’s claim that the employer’s negligence was the cause of the employee’s injury.

  63. Workers Compensation Bodily Injury by Accident Limit

    This is the most your insurer will pay under Coverage B, Employers Liability, for all claims arising out of any one accident, regardless of the number of claims that may arise out of the accident.

  64. Workers Compensation Bodily Injury by Disease – Each Employee

    This is the most your insurer will pay for damages due to bodily injury by disease to any one employee.

  65. Workers Compensation Bodily Injury by Disease – Policy Limit

    This is the aggregate limit that stipulates the most your insurer will pay for employee bodily injury by disease claims during the policy period regardless of the number of employees who make such claims.

  66. Workers Compensation Employers Liability

    This coverage pays all sums that you are legally obligated to pay because of bodily injury by accident or disease sustained by any employee arising out of their employment. This coverage is distinct from any Workers’ Compensation policy claim.

Abuse and Molestation Training and Tools

Abuse Prevention Systems provides an excellent traning program and tools focused on eliminating the abuse and molestation of children in churches, sports, childcare, and educational environments. This program was founded by attorneys who specialize in responding to abuse claims and represent and defend schools, churches and other child and youth-oriented organizations nationwide when incidents of abuse occur or are alleged. They’ve made it a priority to help these organizations take strong measures to reduce the chances of abuse and molestation from ever occurring in the first place.

This online abuse awareness training assists childcare and other organizations in the design and implementation of safety systems meant to reduce the risk of child sexual abuse. This program not only contains videos, tutorials, and other training resources directly to you at the center/school level, but also allows each individual center or school the ability to document and track scheduled and completed training for new and current staff members. The program provides an easy way to keep track of who has completed what training requirements, whether for initial orientation or continued annual state and center requirements.

For more information about this comprehensive training program, please contact us or go to

Employee Leasing:

Sometimes small business owners would prefer human resource professionals to manage their employees, worker’s compensation, payroll, taxes, hiring and termination, labor law and regulation compliance and other administrative requirements. Wouldn’t it be nice to turn these details over to a professional rather than manage them on your own? Employee leasing is a very popular way to manage these areas. McDonald Insurance Agency has exclusive resources available to help. If you want to spend more time focusing on your business and less time worried about employee related issues, you want employee leasing.

Contact Rhonda Gallaspy at The PEO Pro for all the details on how to make running your business easier and while possibly saving you money at the same time.

Exclusive Childcare Health Benefit Supplement

We have access to an exclusive supplemental healthcare benefit program for childcare workers, similar to AFLAC. Sponsored by McDonald Insurance Agency and endorsed by the Georgia Childcare Association, this product is exclusive for our clients nationwide.

Contact The Shiloh Group below:
Shiloh Group
4540 Southside Blvd Ste 401
Jacksonville, FL 32216
Phone: 888-237-8989

Bus Sales:

Transporting children remains one of your largest catastrophic exposures. Standard 15 passenger vans are no longer meeting some state and federal safety requirements for transporting children. Two states have already outlawed using passenger vans for childcare centers and private schools. Other states are likely to follow. Purchasing buses specifically designed for safely transporting children is the best way to minimize this exposure.