Glossary

Sexual orientation discrimination refers to workplace discrimination committed against people who identify as lesbian, gay, bisexual, or transgender.

The share purchase of a corporation's own stock in the open market (i.e., from an organized exchange, such as the New York Stock Exchange).

The Sharpe ratio is a measurement often used to synthesize risk into an easy-to-understand metric.

Short-rate cancellation refers to a type of insurance policy cancellation that serves as a disincentive for the named insured to cancel the policy before its normal expiration date. The only time short-rate cancellation would occur would be when the insured initiates the cancellation prior to the expiration date. With short-rate cancellation, the insurer is entitled to retain a greater percentage of unearned premium than would otherwise apply with pro rata cancellation. The method in which the short-rate cancellation penalty may apply varies with the insurance policy in question. For example, a short-rate table may be included as a part of the policy; or the short-rate penalty may be calculated by multiplying the pro rata cancellation factor by a certain percentage increase—for example, 10 percent.

Shortfall risk is the probability that a random variable falls below some specified threshold level.

A shrink-wrap agreement is a non-negotiable, preprinted agreement that is wrapped in cellophane and included in a box that contains a software program.

The shrinking limits defense provision provides that the expenditure of defense costs associated with a claim reduces policy limits.

Side A-only coverage refers to a directors and officers (D&O) liability policy that provides only "direct" coverage of the directors and officers but does not cover the corporation's legal obligation to indemnify the directors and officers (known as Side B or corporate reimbursement coverage).

Side A coverage refers to the section of coverage under a directors and officers liability insurance policy affording "direct" coverage of an organization's directors and officers.

Side B coverage is another term for what is known as the corporate reimbursement coverage section of a directors and officers liability policy.