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O

Object, see Boiler & machinery insurance.

Obligee - A term used in surety bonds to refer to the individual or firm that is to benefit from the bond’s protection. A performance bond, for example, provides the obligee property owner with recourse if the bonded contractor, the principal, fails to perform.

Obligor - A term used in surety bonds to refer to the individual or firm bound by an obligation. Also known as the "principal."

Occupancy - In general, a condition affecting the desirability of property policies.

Occupational Safety and Health Act (OSHA) - Passed in 1970, this law promulgated strict work-safety regulations, and set up the mechanism to enforce these rules through fines for violations, and closure of unsafe plants.

Occurrence - In general, an event that triggers coverage under any policy. Specifically, an event that triggers coverage under an occurrence-based liability policy. Such a policy covers injury or damage that occurs during the policy period even if claim is brought months or even years after the policy has expired - see Claims-made for the alternate arrangement. Also see Accident.

Ocean marine - Insurance coverage for vessels and property in ocean shipping. "River marine" is the term referring coverage for inland shipments on water. "Motor truck cargo" refers to coverage for property transported over highways.

Off premises cover - Commercial property policies commonly establish a small coverage limit that applies to property temporarily away from the insured’s place of business.

Omnibus clause - An agreement in most automobile liability policies and some others that extends the definition to include to others without the needing to name them. An example would be a policy that covers the named insured and "those residing with him."

Open perils - Property coverage that applies to risks of loss on a general basis, in contrast with policies that cover for specifically identified perils ? see Named perils. The old term for open perils was "all risks."

Open rating - A state rating system that allows the insurer to use rates without prior approval. Also referred to as "open competition."

Operating ratio - The sum of the combined ratio plus investment income.

Ordinance or law coverage - This insurance responds to property loss or damage necessitating repair, demolition, or rebuilding in accordance with current building codes.

Ordinary payroll - Payroll allotted to employees whose services could be curtailed in event of a long-term shutdown of a business without a harmful effect on reopening. This figure is important in calculating business income insurance exposures.

Other than collision insurance (automobile), see Comprehensive physical damage (automobile).

Other insurance - When two or more policies cover the same interests for the same exposures, each policy is said to represent "other insurance" to the other. Most insurance policies contain clauses that specify how or if claims will be paid if other insurance exists for the same exposures.

Outer Continental Shelf Lands Act - This act makes the Longshore and Harbor Workers Compensation Act apply to work involving the development of the natural resources of the outer continental shelf. A special endorsement, the Outer Continental Shelf Lands Act Coverage Endorsement, amends workers compensation policies to provide coverage for this exposure.

Owners and Contractors Protective (OCP) Liability coverage form - Provides coverage for the liability of an owner of land on which a building is being constructed for the acts of the contractor handling the construction. Owners, Landlords, and Tenants legal liability (OL&T), see Premises and operations liability.

Ownership of expirations - Refers to the ability of an independent agent to place a risk with any of the companies that he or she represents. Unless that customer goes to another agent, the current agent "owns" the policy and the right to place it as he/she sees fit.