Travelers 2004 Annual Report Download - page 23

coverage for directors’ and officers’ liability arising in their official capacities, employment practices liability
insurance, fiduciary liability for trustees and sponsors of pension, health and welfare, and other employee benefit
plans, errors and omissions insurance for employees, agents, professionals and others arising from acts or failures
to act under specified circumstances, as well as umbrella and excess insurance. Errors and omissions insurance
for professionals (such as lawyers, accountants, doctors and other health care providers) is sometimes also known
as professional liability insurance.
Fidelity and Surety provides fidelity insurance coverage, which protects an insured for loss due to
embezzlement or misappropriation of funds by an employee, and surety, which is a three-party agreement
whereby the insurer agrees to pay a third party or make complete an obligation in response to the default, acts or
omissions of an insured. Surety is generally provided for construction performance, legal matters such as appeals,
trustees in bankruptcy and probate and other performance bonds. This product line includes surety business
written in the Company’s St. Paul Guarantee (Canada) and Afianzadora Insurgentes (Mexico) subsidiaries.
Workers’ Compensation provides coverage for employers for specified benefits payable under state or
federal law for workplace injuries to employees. There are typically four types of benefits payable under
workers’ compensation policies: medical benefits, disability benefits, death benefits and vocational rehabilitation
benefits. The Company emphasizes managed care cost containment strategies, which involve employers,
employees and care providers in a cooperative effort that focuses on the injured employee’s early return to work,
cost-effective, quality care and customer service in this market.
Commercial Automobile provides coverage for businesses against losses incurred from personal bodily
injury, bodily injury to third parties, property damage to an insured’s vehicle, and property damage to other
vehicles and other property resulting from the ownership, maintenance or use of automobiles and trucks in a
business.
Property provides coverage for loss or damage to buildings, inventory and equipment from natural
disasters, including hurricanes, windstorms, earthquakes, hail, and severe winter weather. Also covered are
manmade events such as theft, vandalism, fires, explosions, terrorism and financial loss due to business
interruption resulting from covered property damage. For additional information on terrorism coverages, see
“Reinsurance—Terrorism Risk Insurance Act of 2002.” Property also includes specialized equipment insurance,
which provides coverage for loss or damage resulting from the mechanical breakdown of boilers and machinery,
and ocean and inland marine insurance, which provides coverage for goods in transit, and unique one-of-a-kind
exposures.
Commercial Multi-Peril provides a combination of property and liability coverage. Property insurance
covers damages such as those caused by fire, wind, hail, water, theft and vandalism, and protects businesses from
financial loss due to business interruption resulting from a covered loss. Liability coverage insures businesses
against third parties from accidents occurring on their premises or arising out of their operations, such as injuries
sustained from products sold.
International provides coverage through non-U.S. insurance markets, predominantly through operations in
the United Kingdom, Canada, the Republic of Ireland and at Lloyd’s. The coverage provided in those markets
includes employers’ liability (similar to workers’ compensation coverage in the United States), public and
product liability (the equivalent of general liability), professional indemnity (similar to directors and officers or
errors and omissions coverages), motor (similar to automobile coverage in the United States) and property. While
the covered hazard may be similar to those in the U.S. market, the different legal environments can make the
product risks and coverage terms potentially very different from those in the United States. International does not
include surety business written in the Company’s St. Paul Guarantee and Afianzadora Insurgentes subsidiaries.
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