Click on a term to see its definition: O

Lost in the terminology insurance companies use? Our quick-reference insurance glossary provides easy-to-understand definitions and examples of the terms insurance professionals use.

Occupation Disease

An Occupation Disease is an illness, disease or abnormal condition that was contracted as a result of working in a certain workplace. This is similar to occupational injuries and is mostly covered by workers compensation insurance.

An occupational disease is identified when it is statistically proven that a specific disease is more common and widespread in a given group of workers, as compared to other groups of workers or the general population. Occupational disease are for chronic ailments and do not refer to trauma or accidents in the workplace (such as a fall).

Workplace hazards that are seen to cause an occupational disease include fumes, high levels of noise, dust and gases, vibration, radiation, the presence of poisons or toxic substances, extreme temperatures (hot or cold) and the presence of infectious viruses and germs.

Occurrence Policy

Occurrence Policy provides protection from claims incurred when the incident happened within the policy period. These are paid even if the claims are filed years after the incident occurred, even when the policy has expired and no longer in force.

Occurrence Policies will not pay for incidents that happen before the term of the policy. This kind of policy provides a specific amount for a certain year.

For instance, Company A has an occurrence policy for $100,000 in 2001. In 2005, the company already is covered for $500,000. If someone files a claim in 2005, the insurance company will only pay for up to $100,000. Any claims beyond this will be paid by the company.

Ocean Marine Insurance

Ocean Marine Insurance provides protection for damage incurred to the vessel (as well as its hull) and its cargo. It covers all kinds of watercraft and vessels.

This kind of insurance includes protection for losses caused by risks such as the need to throw away the cargo in order to save the property of other, the sinking or capsizing of a ship, piracy, perils of the sea, explosion, barratry of the master, as well as defects in the ship that cause damage. This also includes marine-related liabilities.

Ocean Marine Insurance excludes acts of war, civil commotions and riots, confiscations, breakage, damage due to dampness and delay or loss of market.

Open Competition States

Open Competition States are states where insurance companies can freely set new rates and do not need to submit these to any government regulatory board for approval. It is believed that competition will be the tool that will regulate the rates. Insurance companies in competition with one another will set rates that are attractive to prospective customers.

Insurance companies in open competition states use loss experience (based on that specific geographical location) in setting the rates. However, they also have the option to use their own rates.

The only time that the state insurance commissioner can disallow the rates would be if these rates are discriminatory or are unreasonable.

Operating Expenses

Operating Expenses refer to the costs incurred when running a business. This includes rental or building maintenance costs, as well as utilities (power, water, gas), property taxes, insurance, and depreciation.

Operating expenses refer to day-to-day expenses that a business needs during its operations, as opposed to Capital Expenses, which refer to the cost of developing or producing a product, as well as providing non-consumable equipment and parts.

Other operating expenses that an insurance company may have will be: advertising expense, property management, accounting expenses, license fees, office expenses and supplies, attorney and legal fees, worker's wages and salaries, as well as transportation expenses.


Options, in insurance parlance, refer to contracts that give the buyer the option to buy a certain product, property or asset. It does not oblige the buyer to make a purchase, but it gives the buyer the choice as to whether to buy the asset or property at a specified date and price.

There are different options the buyer can have, such as the call option (where he will buy the product) and the put option (involving the delivery and sale of the product). The buyer can also extend the contract, terminate it, or provide a cash settlement depending on the expected or actual price, value, performance or level of the underlying assets or interests.

Ordinance or Law Coverage

Ordinance or Law Coverage serves as an endorsement to an existing policy and protects the insured against costs related to city or municipal laws or ordinances. This means any extra expenses relating to the need to comply with building and safety codes.

The Ordinance Coverage is applied to insurance policies covering property, such as homeowners insurance.

An example of this would be the case where a house is required to be built 5 feet above the ground, in accordance with a new building ordinance, or an upgrade of an existing ordinance. When the house is to be rebuilt after it was destroyed by the storm, the extra expenses required in order to comply with this ordinance will be paid by the ordinance coverage.

Ordinary Life Insurance

Ordinary Life Insurance is the kind of insurance that lasts for as long as the insured person lives. The premiums are set so that the insurance is in force for the lifetime of the insured or at most, until the insured lives up to a hundred years old. The normal maturity period of this insurance is 100.

The Ordinary Life Insurance also has a savings component by virtue of its cash value. The policyowner pays level premiums, where a portion of the premiums is used to build a cash value. This cash value grows with a guaranteed interest rate.

Ordinary Life Insurance has nonforfeiture options when the policyowner decides to stop paying premiums.

Original Equipment Manufacturer Parts (OEM)

Original Equipment Manufacturer Parts refer to automobile parts that are made by the very same manufacturer of the vehicle.

Called OEM for short, these parts are normally more expensive that generic auto parts (parts manufactured by companies other than the original manufacturer). The advantage of OEM is that the parts fit perfectly with the automobile, as these are manufactured for the exact model/make.

In repairing a damaged vehicle, there is an option to use OEM parts or generic auto parts. The costs involved will impact the paying insurance company's costs and loss experience. That is why insurance companies encourage the use generic auto parts, since this will lower claims payments in auto insurance policies.

Over-The-Counter (OTC)

Over-The-Counter (OTC) refers to securities that are not publicly traded through a centralized exchange, such as the New York Stock Exchange, the Tokyo Stock Exchange and the American Stock Exchange. Instead, these are traded using electronic networks and phones. The trading is facilitated by dealers. These may also be securities directly sold and negotiated between sellers and buyers.

Over-the-Counter securities are not readily available or not listed in a stock exchange. That is why over-the-counter securities are also called "unlisted stock".

Derivatives, bonds and other financial instruments may also be traded "over-the-counter". Bonds may also be considered as OTC since investors directly connect with the investment bank to ask for a quote.

Select the first letter of the term to locate its definition:
  1. A |
  2. B |
  3. C |
  4. D |
  5. E |
  6. F |
  7. G |
  8. H |
  9. I |
  10. J |
  11. K |
  12. L |
  13. M |
  14. N |
  15. O |
  16. P |
  17. R |
  18. S |
  19. T |
  20. U |
  21. V |
  22. W |