Quid Pro Quo
What Does Quid Pro Quo Mean?
Quid pro quo is a Latin term that means "this for that." It is often used to describe business situations in which one party exchanges something of value to another party in order to receive something of value from that party.
In the context of insurance, insurers and policyholders often exchange cash and insurance coverage in a quid pro quo exchange.
Insuranceopedia Explains Quid Pro Quo
Quid pro quo is relevant in insurance because it is a simplified breakdown of the underlying concept of an insurance contract. In an insurance contract, a policyholder pays a premium to an insurer in order to have certain risks covered financially. However, once the policyholder stops paying premiums, the situation is no longer a quid pro quo and the insurer will generally stop providing insurance coverage to the individual or group who owned the insurance policy.