Glossary of Terms

General Insurance Terms

Agent
A person authorised to carry on business or affairs for another person.

Benefits

The amount payable by the insurance company to a claimant, assignee or beneficiary under each coverage.

Broker

Represents you or your company to determine the your insurance needs and places the insurance at the best terms commensurate with security.

Cancellation

Discontinuation of an insurance policy before its normal expiration date, either by you or by the insurance company.

Certificate of insurance

A statement of coverage issued to you by the insurer.

Claim

A request for payment of a loss which may be covered under the terms of an insurance contract.

Claims adjuster / Loss adjuster

An independent person appointed by the insurer to investigate a loss, report to the insurer, and authorise repairs where appropriate.

Compulsory insurance

Any form of insurance which is required by law.

Conditions

Provisions inserted in an insurance contract that qualify or place limitations on the insurer's promise to perform.

Contract

A legally binding agreement between two or more parties for doing, or not doing, certain things; a contract of insurance is embodied in a written document called the policy.

Cover

The scope of protection provided under a contract of insurance; any of several risks covered by a policy of insurance.

Depreciation

A decrease in the value of property over a period of time due to wear and tear.

Effective date

The date on which the cover provided by a policy of insurance commences.

Excess/Deductible

The first portion of any claim that you are required to pay.

Exclusions

Items, events or circumstances which an insurance company will not pay for.

Lapse

The termination or discontinuance of an insurance policy from the renewal date.

Loss

The happening of an event that results in a claim.

Minimum premium

The lowest premium a company is prepared to accept to underwrite a risk.

Policy

The printed legal document which states the terms of the insurance contract that is issued to you by the insurer.

Policy term

The period covered by the insurance policy.

Premium

The payment, or one of the periodic payments you make to keep an insurance policy in force.

Premium funding

A service that allows you to spread insurance payments.

Reinstatement

The resumption of coverage under a policy which has been lapsed or cancelled.

Re-insurance

An arrangement between an insurer and a reinsurer to “reinsure” all or part of the risk insured by the original policy as issued by the insurer to you.

Renewal

Continuation of coverage provided by a policy, beyond its original term, by the insurer accepting a premium for a further policy term.

Risk management

Any conscious action or procedure intended to reduce the likelihood or severity of a loss (whether insured or not).

Time limit

The period of time during which a notice of claim, or proof of loss, must be submitted.

Underwriting

The technical process of identifying the probability of and exposure to risk for insurance purposes and calculating the terms and conditions under which company will accept the business.

Valuation

A certificate issued by a competent authority to confirm the value of an item.

Commercial Insurance Terms

Fidelity Guarantee insurance

Covers against theft/misappropriation of cash, goods, and services by employees.

Indemnity

A legal term that specifies that an insured should not collect more than the actual cash value of a loss, but should be restored as near as possible to the same financial position as before the loss

Liability

Any legally enforceable obligation.

Public Liability insurance

Insurance covering your legal liability arising from third party injury or property damage. Includes legal defence costs incurred. Also known as General Liability insurance.

Professional Indemnity insurance

A policy designed to protect the professional against claims arising from their negligent advice, act, error or omission.

Marine Hull Terms

Ex Works (EXW )

This is where the Seller fulfils his obligation to deliver when the goods are made available at his premises to the buyer.

The seller is not responsible for loading the goods on the vehicle provided by the buyer or clearing the goods for export.

The buyer bears from this point all costs and risks involved, including marine insurance, in the transit of the goods to the buyers premises,

Free Alongside Ship (FAS)

This is the named port of shipment where the Seller fulfils their obligation to delivery when the goods have been placed alongside the vessel on the quay. The buyer bears from this point all costs and risks involved, including marine insurance in the transit of the goods to the buyers premises

Free on Board (FOB)

This is the named port of shipment where the Seller fulfils their obligations to deliver when the goods have passed over the ships rail at the port of shipment The buyer bears from this point all costs and risk involved including marine insurance, in the transit of the goods to the buyers premises

Cost and Freight (formerly C&F) (CFR)

The Seller must pay the cost and freight necessary to bring the goods to the named port of destination. The risk of loss or damage to the goods is transferred from the seller to the buyer when the goods pass over the ships rail at port of shipment.

Cost Insurance and Freight (CIF)

The seller has the same obligations as under CFR above. This is that the seller must pay the cost and freight to bring the goods to the named port of destination, and in addition the seller must purchase marine insurance against the buyer’s risk of loss or damage to the goods.

Pleasurecraft policy and Commercial Hull policy

A comprehensive policy for boat owners which covers physical damage to the vessel insured along with liability insurance. The policy also covers sailboards, jet-skis and canoes.

Marine Cargo insurance

Designed to cover goods whilst in transit – local sendings, imports, exports.

Personal Insurance Terms

(House Contents Motor Vehicle)

Accident

An unforeseen and unintended event which results in injury or damage.

Arson

The criminal or fraudulent intention of burning, or attempting to burn, any structure or other property

Burglary

Forcible and/or violent entry into another person’s property with the intention of stealing.

Comprehensive Motor Vehicle insurance

A policy designed to protect the owner of a motor vehicle against a comprehensive range of risks including theft, and damage to their own car (including windscreen breakage) as well as third party property damage and/or bodily injury. This type of policy is sometimes known as “full cover”.

Catastrophe

An event, such as a hurricane or earthquake, which causes a loss of extraordinary magnitude.

Fire insurance

Coverage for loss caused by fire and lightning and resultant damage caused by smoke and water.

Glass

Protection for loss or damage to glass and such other items as sign writing and security tapes.

Market value

The price at which an item can be bought or sold at any particular time. This will generally include any allowance for wear, tear and depreciation.

Replacement cost

The cost to repair or replace property at costs prevailing at the time of loss.

Theft

Any act of stealing property (including forcible entry of a motor vehicle).

Third Party

A claimant against your insurance policy (so called because they are not one of the two parties (the insured and the insurer) who entered into the insurance contract).

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