Glossary

Riggers liability insurance covers a contractor's liability arising out of the moving of property and equipment that belongs to others, such as lifting air-conditioning units onto a roof with a crane. The standard commercial general liability (CGL) policy does not cover this risk due to the exclusion for "personal property of others in your care, custody, or control." Riggers liability coverage can be effected by attaching a riggers liability endorsement to the CGL policy that modifies or deletes the "care, custody, or control" exclusion. (Note that if the contractor is an insured under a builders risk policy on the project, coverage is usually provided in that policy for all of the materials and equipment being incorporated into the project. The builders risk policy may include a deductible, however, and may not include coverage for loss of use for which the contractor may be liable.)

Rights of residents refers to an array of statutory rights given by federal and state "residents rights" legislation to nursing home residents.

Right of offset is a provision in a reinsurance agreement whereby balances due under a reinsurance agreement may be netted out against recoverables under the same agreement.

The right of recourse provision is a provision in fiduciary liability policies giving an insurer the right to subrogate against an insured.

Many states have right to repair laws that place restrictions on a home owner's ability to sue a construction contractor for construction defects. Typically these laws require home owners to give the contractor notice of the issue and an opportunity to repair the faulty work prior to filing a lawsuit.

Ring fence/fencing occurs where a firm's assets or other funds are set aside for a given purpose and cannot be spent elsewhere.

Covers the cost of tearing out a contractor's bad work due to defects that make its inclusion in the project unsafe. The primary markets for rip and tear coverages are concrete and masonry contractors.

Risk-adjusted return on capital (RAROC) refers to a target return on equity measure in which the numerator is reduced depending on the risk associated with the instrument or project.

Risk-adjusted return on risk-adjusted capital (RARORAC) is the combination of risk-adjusted return on capital (RAROC) and return on risk-adjusted capital (RORAC) in which both the numerator and denominator are adjusted (for different risks).

Risk-adjustment investment describes the funds, or capital, specifically identified to pay for the risk that is not transferred to a counterparty or an insurer.