Work And Materials Clause

A A A

DEFINITION

A provision in many property insurance policies that allows the policyholder to use the insured premises to store materials and to use the materials in the manner required by his or her line of work. The work and materials clause circumvents the increased hazard clause that is found in standard fire policies, which states that the insurer would not be liable for losses occurring when a hazard is increased and is known by and within the control of the insured. Without the provision, a policy could be voided for misrepresentation of an undisclosed increased hazard, fraud or concealment (the misrepresentation of a material fact, before or after a loss).

INVESTOPEDIA EXPLAINS

The work and materials clause acts as protection for policyholders against a claim that the insured knowingly increased a hazard if it can be shown that the materials or work in question were essential to the policyholder's line of work. The clause works to the benefit of the policyholder since without it claims could be denied based on the insured's prior knowledge and control of a hazard.


RELATED TERMS
  1. Against All Risks - AAR

    An insurance policy that provides coverage against all types of loss or damage ...
  2. Business Risk Exclusion

    A type of coverage that is often omitted from product liability insurance. Business ...
  3. Casualty Insurance

    A broad category of coverage against loss of property, damage or other liabilities. ...
  4. Homeowners Insurance

    A form of property insurance designed to protect an individual's home against ...
  5. Hazard Insurance

    Insurance that protects a property owner against damage caused by fires, severe ...
  6. Reinsurer

    A company that provides financial protection to insurance companies.
  7. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s ...
  8. Death Master File (DMF)

    Also known as Social Security Death Index. A list of people whose deaths were ...
  9. Level Death Benefit

    A life insurance payout that is the same whether the insured person dies shortly ...
  10. HIPAA Waiver of Authorization

    A legal document that allows an individual’s health information to be used or ...
Related Articles
  1. The Importance Of Property Insurance
    Home & Auto

    The Importance Of Property Insurance

  2. Don't Get Sued: 5 Tips To Protect Your ...
    Entrepreneurship

    Don't Get Sued: 5 Tips To Protect Your ...

  3. 5 Expensive Small Business Mistakes
    Entrepreneurship

    5 Expensive Small Business Mistakes

  4. Cut Taxes By Reporting Property Damage
    Taxes

    Cut Taxes By Reporting Property Damage

  5. Plans The Small-Business Owner Can Establish
    Entrepreneurship

    Plans The Small-Business Owner Can Establish

  6. 6 Good Reasons To Get Renter's Insurance
    Insurance

    6 Good Reasons To Get Renter's Insurance

  7. What's the difference between Social ...
    Retirement

    What's the difference between Social ...

  8. On average, what can I expect my private ...
    Home & Auto

    On average, what can I expect my private ...

  9. Why do I need to pay private mortgage ...
    Home & Auto

    Why do I need to pay private mortgage ...

  10. Want To Sell Life Insurance? Read This ...
    Entrepreneurship

    Want To Sell Life Insurance? Read This ...

comments powered by Disqus
Hot Definitions
  1. Identity Fraud Reimbursement Program

    A financial product that offers reimbursment for the costs associated with having been a victim of identity theft. These costs may include getting affidavits notarized for police and financial institutions, postage for sending certified mail to police and financial institutions, lost earnings resulting from time spent recovering one's identity, and legal fees.
  2. Cash and Carry Transaction

    A type of transaction in the futures market in which the cash or spot price of a commodity is below the futures contract price. Cash and carry transactions are considered arbitrage transactions.
  3. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  4. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  5. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  6. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
Trading Center