Park Insurance - Jargon Buster

We want to provide you with as much information as possible. Our jargon buster page helps explain some of the strange terms used in the world of insurance:-

ADDITIONAL PREMIUM

A further premium payable by the insured as a result of policy amendment, that may have increased the risk or changed the policy conditions or sum insured.

ABANDONMENT OF EVENTS

A contingency insurance protecting promoters of events (e.g. exhibitions, fetes) against financial loss following cancellation, abandonment, interruption, rescheduling, postponement through circumstances (fires, storms) beyond their control. Judicial intervention that causes abandonment is sometimes included in the cover. Non-appearance cover is also available.

ACCIDENTAL DAMAGE COVER

Cover under a household or a commercial policy that provides all the benefits of standard named peril policy plus accidental damage cover, e.g. spilling paint on a carpet or computer. Under a named peril policy a loss has to be matched to a named peril.

ADJUSTER

One who investigates and assesses claims on behalf of insurers (claims adjuster or loss adjuster).

ADVANCE PROFITS INSURANCE

Business interruption insurance of the expected profits of a new enterprise or an extension to an existing business.

AGGREGATE LIMIT OF INDEMNITY

The maximum amount an insurer will pay under a policy in respect of all accumulated claims arising within a specified period of insurance.

ALL RISKS

A term describing a property insurance covering any fortuitous loss or damage that is not specifically excluded. This contrasts with a policy covering physical loss or damage caused by a named peril, e.g. fire. The ‘all risks’ exclusions relate to inevitable forms of loss, such as depreciation and wear and tear, and other losses due to gradually operating causes. ‘All risks’ cover is available for personal possessions, cameras, jewellery, industrial equipment and goods in transit, and applies to Institute Cargo Clauses A. Under household and commercial policies on buildings and contents, and cover on motor vehicles, the term has given way to ‘accidental loss or damage’ as a means of going beyond named perils cover.

AVERAGE

A clause in insurance policies whereby, in the event of under-insurance, the claim paid out by the insurer is restricted to the same proportion of the loss as the sum insured under the policy bears to the total value of the insured item.

BOAT INSURANCE

Most policies cover physical damage to the hull, sails, machinery, furniture, and most other equipment that is normally used on board. Most perils are covered including vandalism, malicious mischief, and even damage those results from latent defects of workmanship.

BUILDINGS INSURANCE

This covers your property against damage. This normally includes fire, flood and subsidence damage, temporary accommodation / housing, and the cost of replacing broken or lost keys. Outside buildings such as garages, greenhouses and sheds are often also covered.

Fixed items such as baths, toilets, sinks, pipes and drains are also covered by the majority of policies.

Some policies have options to include accidental damage cover, and to raise the excess (Initial amount you need to pay in the event of a claim) to reduce the policy cost.

BUSINESS INTERRUPTION INSURANCE

Covers loss of gross profit following reduced turnover resulting from, and occurring after, insured property damage. The gross profit indemnity enables the business to pay its standing charges, including payroll, and recover its net profit during the indemnity period, the period selected as being the time needed to restore normal trading levels. Specified working expenses are not at risk and are therefore deducted from turnover before arriving at the gross profit, the item to be insured. The policy also covers increased cost of working, e.g. renting alternative premises, subject to the cost not exceeding the amount of loss thereby avoided. Additional increased cost of working can be insured. The policy may extend to interruptions caused by damage at the premises to customers or suppliers, or resulting from loss of attractions, murder, suicide, food poisoning or infectious/contagious diseases.

BUSINESS TRAVEL INSURANCE

This covers you against the loss or damage of business equipment such as laptops and product samples. This often also covers the costs of an emergency courier to deliver replacement items if needed (say, for an important meeting). Some policies also provide cover against the death or hospitalisation of an employee on a business trip, covering the costs for a colleague to take their place.

CANCELLATION

Termination of a policy before it is due to expire. There may be a cancellation clause in a policy setting out the condition under which the policy may be cancelled by notice. The period of notice could be anything from 48 hours to 3 months. In most cases this will result in a return premium being paid by the insurer to the insured.

CARAVAN INSURANCE

Caravans represent a major financial investment, an investment that you need to protect against loss from, accident, fire and theft. You also need third party liability indemnity insurance to protect yourself against claims made by others.

CARGO

Covers manufacturers and suppliers with domestic and/or international risk exposures arising from the movement of their goods. Worldwide cover is available for import, export, inland transit and stock throughput risks.

CLAIMS

Injury or loss to the insured arising so as to cause liability to the insurer under a policy it has issued.

COMBINED LIABILITY POLICY

Policy combining two or more types of liability insurance in one document, e.g. public liability, products liability and employers’ liability.

COMMERCIAL COMBINED

Covers accidental loss, destruction or damage to the property, except as excluded (e.g. faulty or defective design, inherent vice, latent defects, explosion of boilers, sonic bangs, collapse and others that may be applicable in real terms to certain categories of equipment). Many of the exclusions can be bought back. The property insured is industrial and commercial plant and equipment. Cover is often arranged on a first loss basis.

COMMERCIAL HULL AND LIABILITY

Covers work boats, port craft, barges, pontoons, tugs, dredgers, passenger and/or goods carrying vehicles, marine property, inshore fishing vessels, ship builders, ship repairers and marina operators. Cover is tailored to individual risk requirements.

COMMERCIAL LEGAL EXPENSES

Provides businesses with legal advice and covers legal expenses to enforce or defend legal rights in a range of disputes. Cover is available under various sections: court attendance expenses; tax/VAT disputes; prosecution defence; data protection liability; contract disputes; personal injury or property claims; premises disputes; employment disputes and awards; licence disputes.

COMMERCIAL VEHICLE INSURANCE

A general term referring to the insurance of goods-carrying vehicles, buses and coaches, agricultural and forestry vehicles, mobile plant and other special types.

COMMON LAW

The common law consists of the ancient customs and usages of the land, which have been recognised by the courts and given the force of law. It is in itself a complex system of law, both civil and criminal, although it is greatly modified and extended by statute law and equity. It is unwritten, and has come down in the recorded judgements of judges who for hundreds of years have interpreted it.

COMMUNITY COMPANY

An insurance company whose head office is in a member State of the European Economic Community.

COMPREHENSIVE

A term describing a policy with a number of different types of cover in one document (e.g. a private car comprehensive policy has sections providing material damage cover, third party cover, personal accident cover, medical expenses, etc.).

COMPUTER INSURANCE

Covers ‘all risks’, theft and breakdown included, on computer and ancillary equipment. Chips and standard software are included automatically. Other key features: ‘new for old’ settlements; cover in UK premises and in transit; negotiable excesses; loss of data; Data Protection Act liability; and consequential loss following an insured breakdown or loss. Liability insurance may be included. Exclusions are minimal but special precautions have to be taken when computer equipment is left in an unattended vehicle. Policies may apply to personal computers, laptops and main-frame systems.

CONCEALMENT

Deliberate suppression by a proposer for insurance of a material fact relating to the risk, usually making the contract null and void.

CONSEQUENTIAL LOSS

The term, unless defined in a contract, follows the rule for contractual damages and embraces losses flowing directly from the breach, e.g. late delivery that increases costs. Consequential losses are generally regarded as the more remote consequences that were not reasonably foreseeable by the parties. Contracts that define consequential are more likely to limit a person’s rights than a clause that simply excludes liability for consequential loss without definition. In insurance the term is used to refer to expenses such as the cost of temporary relocation, while fire damaged property is being repaired. The term ‘consequential loss insurance’ has been replaced by ‘business interruption insurance’. Consequential loss is not covered under material damage insurances.

CONTENTS INSURANCE

This covers the contents of your home against damage or loss due to fire, lightning, flooding, theft or break-in. Accidental damage is sometimes included, although it is usually an optional extra.

Contents Insurance is often sold together with Buildings Insurance, or as a single Home Insurance policy.

Remember that if you have a home office, it is not covered by your standard buildings/contents insurance, and a special policy will need to be bought.

CONTINGENCY INSURANCES

A term describing those policies that do not fall naturally into one of the principal classes of insurance business. The term embraces insurances such as abandonment of events, pluvius insurance and others often of an unusual nature.

CONTRACTORS' PLANT POLICY

Renewable cover for contractors who own, hire-in or hire-out plant (mobile plant, machinery and equipment) against unforeseen and accidental physical loss due to external causes; internal causes such as breakdown and wear and tear are excluded. The policy operates whilst at work or at rest or during dismantling or erection, loading, unloading or transit. For hired-in plant the cover includes legal liability for negligent breakdown and continuing hire charges. For hired-out plant the cover can be extended to indemnify the hirer. Cover can be arranged as a part of a contract works policy or, in some cases, motor insurance as special types.

CONTRACT WORKS/CONTRACTORS' ALL RISKS INSURANCE (Annual or single project)

Covers temporary and permanent works executed in the performance of contracts, and materials for incorporation therein, plus own and hired plant, and tools and equipment while on sites or in transit. Cover is arranged for house extensions through to multi-storey office blocks. Premiums are based on annual turnover with a maximum value of any one contract. Various extensions are available (e.g. continuing hire charges following plant damage). Key exclusions relate to existing structures and defective design. Cover may have to accord with standard term contracts (e.g. Joint Contract Tribunal).

COVER NOTE

A document issued to the insured confirming details of the insurance cover placed. Some cover notes are a legal requirement, e.g. motor.

CREDIT INSURANCE

This protects you against customers who fail to pay their invoices. Because the risk of bad debt can be high, you would probably find it hard to get cover for this unless your business has been successfully up and running for some time.

DEDUCTIBLE

The specified amount a loss must exceed before a claim is payable. Only the amount which is in excess of the deductible is recoverable.

DEFERRED PREMIUM

The part of a premium which, following agreement with underwriters, is payable by installments, usually quarterly or half yearly.

DETERIORATION OF FREEZER CONTENTS (Household)

Insurance of stock stored in a freezer and/or refrigerator against the risk of loss through deterioration following: (a) breakdown of plant; (b) non-operation of thermostatic or automatic controlling devices; (c) action of escaping refrigerant fumes from any cause; or (d) failure of the public electricity supply.

DETERIORATION OF STOCK

Engineering insurance covering damage to perishable stock in cold stores directly consequent upon an accident to cooling or climatising equipment insured under a machinery breakdown policy. The widest form of cover insures loss caused by any rise or fall in temperature.

EMPLOYERS LIABILITY INSURANCE

Insurance by employers in respect of their liability to employees for injury or disease arising out of and in the course of their employment. With some exemptions this insurance is compulsory in Great Britain, and can only be provided by an authorised insurer.

ENDORSEMENT

Documentary evidence of a change in the wording of or cover offered by an existing policy or qualification of wording if the policy is written on restricted terms. (See also Addendum).

ENGINEERING INTERRUPTION

A business interruption insurance providing an indemnity at a fixed rate per day in respect of interruptions following breakdown or unforeseen damage to installed plant and machinery or failure of the power or water supply. There are time exesses/deductibles or franchises applied to the indemnity period to avoid small losses, particularly temporary losses of services.

EXCESS

The first portion of a loss or claim which is borne by the insured. An excess can be either voluntary to obtain premium benefit or imposed for underwriting reasons.

EXCESS LAYER

A layer of insurance cover provided by an insurer that sits above the primary layer. The liability of the insurer providing the additional layer is only triggered when the existing primary layer (plus any other layers already in place) has been exhausted. The ‘layer’ insurer provides a band of cover, commonly in liability insurance, by setting an upper limit of liability.

EXCLUSION

A provision in a policy that excludes the insurer's liability in certain circumstances or for specified types of loss.

EX-GRATIA PAYMENT

A payment made by an insurer to a policyholder where there is no legal liability so to pay.

FAMILY LEGAL PROTECTION

This covers you against legal costs in the event of you being involved in a court case. This usually includes (amongst other areas) cover against contract disputes, personal injury claims, employment disputes, and jury service.

When you join a Family Legal Protection policy, many insurers will also then allow you access to free legal help and advice.

FIDELITY INSURANCE

This covers you for fraud or dishonesty by employees, it can be taken out for any amount of employees or the whole staff.

FIRE AND THEFT COVER

Named peril ‘own damage’ cover added to a third party motor vehicle. The property damage cover is against damage caused by fire and theft risks only. The cover could stand alone if the vehicle is out of use.

FIRE INSURANCE POLICY

A material damage insurance that in its ‘standard’ form covers destruction or damage to the insured property by (1) fire (resulting from explosion or otherwise) not occasioned by or happening through (a) its own spontaneous fermentation or heating or its undergoing any process involving the application of heat, (b) earthquake, subterranean fire, riot, civil commotion etc.; (2) lightning; and (3) explosion, not occasioned by or happening through any of the perils specified in (1) above, (i) of boilers used for domestic purposes only, (ii) in a building not being part of any gas works, of gas used for domestic purposes or used for lighting or heating of the building.

FIRST LOSS INSURANCE

Insurance where the sum insured is accepted to be less than the value of the property but the insurer undertakes to pay claims up to the sum insured, without application of average.

FLEET INSURANCE

Policy on a number of vehicles operated by the same insured and rated on an experience basis, i.e. fleet rating. Usually five or more vehicles constitute a fleet. The fleet itself can comprise vehicles of different classes, e.g. private cars, goods-carrying vehicles, etc. Aircraft and ships can also be insured as fleets.

FLOOD INSURANCE

Insurance against damage caused by the escape of water from the normal confines of any natural or artificial water course (other than water tanks, apparatus or pipes) or lake, reservoir, canal or dam in addition to inundation from the sea. Losses are normally subject to a minimum excess of £250. The risk is normally insured as an additional peril together with storm damage.

FREIGHT LIABILITY

Products are aimed at transport contractors, road hauliers, freight forwarders, warehouse keepers, packers and consolidators. Cover is available to meet the firm’s chosen trading conditions and other legal liabilities.

GOODS IN TRANSIT INSURANCE

Covers goods in transit by land (or by land and sea). Cover is either on (a) the goods protecting the owner’s interest; or (b) the liability when a road haulier carries customers’ goods. The goods owner insures ‘all risks’ cover up to an amount per specified vehicle or per consignment when using other transport modes. The haulier can insure on a specified vehicle basis or, on a declaration basis, by estimating annual haulage charges with a selected limit of indemnity. Cover, within the territorial limits, applies during loading, carriage, unloading or temporary garaging of vehicles or trailers. Insurance may include loss/damage to sheets, ropes, clearing up, repackaging and re-sorting following an accident.

GLASS INSURANCE

Breakage of all types of glass (e.g. wired and embossed plate, figured glass, etc.). The insurers will make good or pay full replacement value, including shop fronts with lettering. Any breakage insurable under a fire policy or caused by explosion is excluded. Fixed glass in dwellings is insured under household comprehensive policies.

GROSS PREMIUM

A term normally applied to gross written premiums before deduction of brokerage and discounts.

HAZARD

A physical or moral feature that introduces or increases the risk.

HEALTH INSURANCE

This covers you for private treatment in the event of an illness or the need for an operation. Optional areas of cover include home nursing, some specialist consultations, and 'out-patient' treatment such as physiotherapy.

INCEPTION DATE

The date from which, under the terms of a policy, an insurer is deemed to be at risk.

INCREASE IN COST OF WORKING

Under a business interruption policy some cover is provided for additional expenditure incurred by the insured solely for the purpose of reducing the shortage in production following an insured event.

INDEMNITY

A principle whereby the insurer seeks to place the insured in the same position after a loss as he occupied immediately before the loss (as far as possible).

INDEMNITY PERIOD

Under a business interruption insurance the period during which cover is proved for disruption to the business following the occurrence of an insured peril.

INSURABLE INTEREST

For a contract of insurance to be valid the policyholder must have an interest in the insured item that is recognised at law whereby he benefits from its safety, well being or freedom from liability and would be prejudiced by its damage or the existence of liability. This is called the insurable interest and must exist at the time the policy is taken out and at the time of the loss.

INSURABLE VALUE

The value of the insurable interest which the insured has in the insured occurrence or event. It is the amount to be paid out by the insurer (assuming full insurance) in the event of total loss or destruction of the item insured.

INSURANCE BROKER/INTERMEDIARY

An insurance intermediary who advises his clients and arranges their insurances. Although he acts as the agent of his client, he is normally remunerated by a commission (brokerage) from the insurer. An insurance broker is a full-time specialist with professional skills in handling insurance business. Since January 2005 intermediaries and brokers must be registered with,and regulated by the Financial Services Authority.

FINANCIAL OMBUDSMAN SERVICE

A bureau established by major insurance companies to oversee the interests of policyholders whose complaints remain unsolved through normal company channels of communication. The service is available to all those holding personal cover with the insurers who have joined the scheme. The decision of the Ombudsman is binding on the insurer, although the insured may appeal to the court if he so wishes.

INSURANCE PREMIUM TAX

The Finance Act 1994 introduced this new tax on most general insurance risks located in the UK.

INSURED

The person whose property is insured or in whose favour the policy is issued.

INSURER

An insurance company or Lloyd's underwriter who, in return for a consideration (a premium). agrees to make good in a manner laid down in the policy any loss or damage suffered by the person paying the premium as a result of some accident or occurrence.

KEY PERSON (Key Man) INSURANCE

This insures your business against the loss of a key employee through disability or death. The money can be used in any way by a business deems appropriate, not just to train/hire a direct replacement. Key person cover can also be used to cover partners in a partnership, or shareholders in a privately owned company. Key person insurance can be particularly important in small businesses, where there may only be one person trained for a particular job.

KNOCK FOR KNOCK

A forbearance agreement between two insurance companies designed to avoid legal action. This arrangement applies to motor vehicle policies and under it each company agrees to pay up to the limits of their respective interests for the damage to the vehicle of their own insured without regard as to who was to blame for the accident.

It is essential to talk to a specialist or advisor before taking out key person cover; as it requires a detailed knowledge and understanding of the business and employee roles.

LAPSE

The non-renewal of a policy for any reason.

LATENT DISEASE

An illness which lies dormant for some years before manifesting itself.

LEGAL EXPENSES INSURANCE

This helps cover the majority of your costs in the event of a legal dispute. This usually covers legal costs for employment tribunals, prosecutions under acts such as The Health and Safety at Work (etc) Act 1974, contract disputes, and costs caused by an in-depth Internal Revenue or Custom and Excise investigation. Some legal expenses policies also provide free legal advice, as well as cover for employee time lost during jury service or as a witness in a case.

LIMIT

The insurer's maximum liability under an insurance, which may be expressed 'per accident', 'per event', 'per occurrence', 'per annum', etc

LLOYD'S (OF LONDON)

A Society, incorporated under Act of Parliament of 1871 and known as the Corporation of Lloyd's, which provides the premises a wide variety of services, administrative staff and other facilities to enable the Lloyds market to carry on insurance business efficiently.

LOSS

Another term for a claim.

LOSS ADJUSTER

Independent qualified loss adjusters are used by Insurers for their experience and expertise necessary to carry out detailed and in some instances prolonged investigations of complex and large losses. Although the adjuster's fees are invariably paid by the insurers he is an impartial professional person and makes his judgement on the amount to be paid in settlement solely on the basis of established market practice. It is his task to negotiate a settlement which is within the terms of the policy and equitable to both insured and insurer. Should he himself not be an expert in a particular discipline which is necessary or desirable to pursue his negotiations, he will consult or employ such an expert.

LOSS ASSESSOR

1. In motor insurance, an engineer.
2. In other classes a person who, in return for a fee (usually a percentage of the amount claimed), acts for the claimant in negotiating the claim.

MATERIAL DAMAGE WARRANTY

A warranty in a business interruption insurance policy stipulating that for the interruption insurance to become effective there must be a policy in force in respect of the material damage and a claim paid or admitted thereunder for such damage caused by an insured peril.

MATERIAL FACT

Any fact which would influence the insurer in accepting or declining a risk or in fixing the premium or terms and conditions of the contract is material and must be disclosed by a proposer, or by the insurer to the insured.

MONEY INSURANCE

An insurer’s definition of money includes cash, bank notes, cheques, postal orders, postage stamps, national savings certificates and holidays with pay stamps, luncheon vouchers and VAT purchase invoices. Cover is ‘all risks’ subject to specific limits depending on the circumstances of the loss, e.g. from a locked safe or a directors home. Insurers normally cover personal assault and theft by employees, primarily a fidelity guarantee risk, is covered only if discovered within 14 days.

NAME

Another term for an underwriting member of Lloyd's.

NEGLIGENCE

Perhaps the most common formof tort. In Blyth v Birmingham Waterworks Co. (1856) it was defined as 'the omission to do something which a reasonable man guided by those considerations which ordinarily regulate the conduct of human affairs would do, or doing something which a prudent and reasonable man would not do'. Gives rise to civil liability.

NET PREMIUMS

Term variously used to mean gross premiums net of reinsurance premiums payable, or commission, brokerage, taxes, or any combination of these.

NEW FOR OLD

Where insurers agree to pay the cost of property lost or destroyed without deduction for depreciation.

NO CLAIMS BONUS (OR DISCOUNT)

A rebate of premium given to an insured person by an insurer where no claims have been made by that insured. Very common in motor insurance.

NON-DISCLOSURE

The failure by the insured or his broker to disclose a material fact or circumstance to the underwriter before acceptance of the risk.

PACKAGE POLICY

Combines different insurances in one document for one insured. Example: Shopkeepers’ policy covers property, business interruption, money, liability covers, etc.

PASSENGER LIABILITY

The liability of a carrier to passengers.

PERIL

A contingency, of fortuitous happening, which may be covered or excluded by a policy of insurance.

PERIOD OF RISK

The period during which the insurer can incur liability under the terms of the policy.

PERMANENT HEALTH INSURANCE

Term used to describe contracts of insurance providing continuing benefits in the event of prolonged illness of disability.

PERSONAL ACCIDENT AND SICKNESS INSURANCE

An accidents only policy pays lump sum benefits following permanent total or partial disablement, dismemberment or death caused by an accident and weekly benefits for temporary total disablement. The policy is renewable annually but similar cover is available under travel policies. Hazardous pursuits (e.g. mountaineering) are excluded but can usually be bought back. A weekly/monthly benefit can be added for total disablement through sickness – a personal accident and sickness policy.

PET INSURANCE

Covers domestic pet owners against financial consequences (veterinary fees) of accidental injury to the pet, illness and third party liability. Comprehensive cover extends to loss or theft, cancellation of holidays, cost of advertising, payments of rewards. Death benefit does not apply to elderly animals. Domestic pet cover is not available for racing dogs, guard dogs, working dogs or dogs registered under the Dangerous Dogs Act 1991.

POLICY

A document detailing the terms and conditions applicable to an insurance contract and constituting legal evidence of the agreement to insure. It is issued by an insurer or his representative for the first period of risk. On renewal a new policy may well not be issued although the same conditions would apply, and the current wording would be evidence by the renewal receipt.

POLICY HOLDER

The person in whose name the policy is issued. ( See also insured and assured).

PREMIUM

The consideration paid for a contract of insurance.

PRODUCTS LIABILITY INSURANCE

These policies cover the insured's legal liability for bodily injury to persons, or loss of or damage to property caused by defects in goods (including containers) sold, supplied, erected, installed, repaired, treated, manufactured, and/or tested by the insured.

PROFESSIONAL INDEMNITY INSURANCE

This policy protects a professional man against his legal liability towards third parties for injury, loss, or damage, arising from his own professional negligence or that of his employees.

PROPOSAL FORM

A form sent by an insurer to a person requiring insurance so as to obtain sufficient information to allow the insurer to decide whether or not to accept a risk and what conditions to apply if it is accepted.

QUOTE

A statement by an insurer of the premium he will require for a particular insurance.

REINSTATEMENT

Making good. Where insured property is damaged, it is usual for settlement to be effected through the payment of a sum of money, but a policy may give either the insured or insurer the option to restore or rebuild instead.

RENEWAL

The process of continuing an insurance from one period of risk to a succeeding one.

RISK

The peril insured against or an individual exposure.

RISK MANAGEMENT

The identification, measurement and economic control of risks that threaten the assets and earnings of a business or other enterprise.

SALVAGE

A recovery of all or part of the value of an insured item on which a claim has been paid. The insurer will normally dispose of the item and apply the proceeds to reduce the cost of the claim.

SCHEDULE

The part of a policy containing information peculiar to that particular risk. The greater part of a policy is likely to be identical for all risks within a class of business covered by the same insurer.

STATEMENT OF FACT

An alternative to a completed proposal form. A statement provided by the insurer clarifying the basis on which insurance is accepted and what conditions apply.

STATUTE LAW

Presently the most important source of law is statute law, otherwise known as Acts of Parliament; which may create entirely new law, over-rule, modify, or extend existing principles of common law and equity, and repeal or modify existing Statute law.

SUBJECT TO SURVEY

Phrase used by an insurer to signify provisional acceptance of an insurance pending inspection by a surveyor whose report is necessary to determine the rate and conditions applicable.

SUM INSURED

The maximum amount payable in the event of a claim under contract of insurance.

TERRORISM

Coverage is available for physical damage to fixed and mobile assets caused by terrorist acts, sabotage acts, malicious damage, strikes, riots and civil commotion, and Business Interruption following property damage to the insured asset by one of the above perils. Terrorism General Liability is also available and insures against liability for third party physical damage and bodily injury, as well as coverage for employers’ liability in the event of a terrorist act.

THEFT INSURANCE

Indemnifies the insured against loss or damage occasioned by theft as defined in the policy. Commercial policies normally cover theft following ‘forcible and violent entry into or exit from the premises’. Theft, as defined in the Theft Act 1968, is normally considered too wide in scope. Wider cover is available under household policies.

THIRD PARTY

A person claiming against an insured. In insurance terminology the first party is the insurer and the second party is the insured.

THIRD PARTY LIABILITY

Liability of the insured to persons who are not parties to the contract of insurance and are not employees of the insured.

THIRD PARTY MOTOR COVER

Covers liability for third party injury and property damage, including emergency treatment, and liability for accidents caused by passengers. The policy exceeds the level of cover required under Road Traffic Act compulsory requirements that require cover only in connection with vehicles used on a road or other public place. The normal third party policy is not so restricted.

TRAVEL INSURANCE

This covers you against (among other areas) personal injury, loss of baggage or money, legal costs, and cancellation costs if you are forced to cancel the holiday. Many policies also provide personal liability cover.

Travel insurance is available on both a 'per trip' and annual basis.

TREATMENT LIABILITY

Covers your legal responsibility for injury or damage caused by the products or treatments you provide. In the case of hairdressers this will include hair products, services and the assorted range of treatments you provide to your clients.

UNDERLYING INSURANCE

The primary insurance as distinct from excess insurance.

UNDERWRITER

A person who accepts business on behalf of an insurer. (See also Lloyd's underwriter).

UTMOST GOOD FAITH

Insurance contracts are contracts of utmost good faith (uberrima fides), which means that both parties to the contract have a duty to disclose, clearly and accurately, all material facts relating to the proposed insurance. Any breach of this duty by the proposer may entitle the insurer to repudiate liability.

WARRANTY

A very strict condition in a policy imposed by an insurer. A breach entitles the insurer to deny liability.

WEATHER INSURANCE

Insurance for the promoter of an outside event, e.g. outdoor play, that depends on specific weather conditions. The policy pays if, for example, a preset rainfall level is exceeded leading to cancellation or reduced attendance.

WEAR AND TEAR

This is the amount deducted from claims payments to allow for any depreciation in the property insured which is caused by its usage.

WITHOUT PREJUDICE

1. Term used in discussion and correspondence. Where there is a dispute or negotiations for a settlement and terms are offered 'without prejudice' an offer so made or a letter so marked and subsequent correspondence cannot be admitted in evidence without the consent of both parties concerned.
2. Term also used by an underwriter when paying a claim which he feels may not attach to the policy.
This payment must not be treated as a precedent for future similar claims.