What happens when a claim is filed — your obligations, carrier duties, and the claims process. 9 terms explained.
Claim
A demand for payment or defense under your insurance policy, typically triggered by a lawsuit, written demand, or regulatory action against your business.
Also: Insurance Claim · Notice of Loss · Demand for Coverage
Cooperation Clause
A policy condition requiring you to assist your insurer in investigating and defending a claim.
Duty to Defend vs Duty to Indemnify
Duty to defend pays your legal costs; duty to indemnify pays the judgment or settlement.
Loss
The financial damage resulting from a covered event.
Malfeasance
A wrongful, unlawful, or intentionally harmful act—especially by someone in a position of trust such as a director, officer, or public official.
Also: Malfeasance Meaning · Malfeasance Definition · Official Misconduct
Notice of Circumstance
Reporting a situation that might become a claim, before it actually does.
Notice of Claim
The formal notification you must give your insurer when a claim is made against you.
Panel Counsel
Pre-approved law firms your insurer uses to defend claims.
Reservation of Rights
A letter from your insurer saying they'll investigate your claim but may not cover it.
Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.