Package Policy
A combination of two or more individual polices into a single policy. A householders policy, for example, is a package policy.

Partial Disability
The result of an illness or injury which prevents an insured from performing on or more of the functions of his/her regular job

Particular Average
A term meaning an accidental and usually a partial loss suffered by one interest and not chargeable against others

Peril
The event insured against; the cause of possible loss

Personal Injury
In law, a term used to embrace a broad range of torts that includes bodily injury, libel, slander, discrimination and similar offences. Also a standard insurance coverage that protects against a more limited group of torts (false arrest, detention or imprisonment, malicious prosecution, wrongful entry or eviction, and libel, slander, or defamation)

Physical Damage
Damage to or loss of an automobile resulting from a named peril

Physical Hazard
A condition of the subject of insurance which creates or increases the chance of loss, such as structural defects, occupancy, or similar conditions

Pilferage
Petty theft, especially theft of articles in less than package lots.

Policy
The legal document issued by the company to the policyholder, which outlines the conditions and terms of the insurance; also called the policy contract for the contract

Policyholder
The person (or persons) whose risk of financial loss from an insured peril is protected by the policy.

Policyholder's funds
Monies set aside by insurers to cover outstanding liabilities to Policyholders. Also known as technical reserves

Policy Period
The term for which insurance remains in force, sometimes definite, sometimes not Policyholder's surplus
Amount over and above liabilities available for an insurer to meet future obligations to its policyholders

Policy Term
The period for which an insurance policy provides coverage

Policyholder
A person who pays a premium to an insurance company in exchange for the insurance protection provided by a policy of insurance

Pool
A risk sharing mechanism in which the members of a group agree to be collectively responsible for losses

Premium
The sum paid by a policyholder to keep an insurance policy in force. It is the amount paid to secure an insurance policy

Premium Notice
Notice of a premium due, sent out by the company or one of its agencies to an insured. Synonym for " Renewal Notice".

Principal
The applicant for, or subject of, insurance; the one from whom an agent derives his or her authority

Pro Rata Cancellation
Cancellation with a return of premium charged for the period of time the policy was in force equal to the ratio of the total premium to the total policy period

Product Liability Insurance
Protection against financial loss arising out of the legal liability incurred by a manufacturer, merchant, or distributor because of injury or damage resulting from the use of a covered product

Professional Indemnity
It is a cover granted to professionals like Doctors covering their legal liability for any claims arising out of professional misconduct

Property Insurance
Insurance providing financial protection against the loss of, or damage to, real and personal property caused by such perils as fire, theft, windstorm, hail, explosion, riot, aircraft, motor vehicles, vandalism, malicious mischief, riot and civil commotion, and smoke

Proposal
A person interested in taking out insurance has to make an offer by means of a proposal. This is an application for the cover required, or for obtaining quotations of the premium chargeable

Proposal Form
It is a form which is to be completed for securing an insurance policy

Proposer
Proposer is a person who proposes the insurance policy

Prospectus
A form, which is often part of the proposal form, giving details of the cover available with particulars of extra benefits and rebates

Protection and Indemnity (P & I) Insurance
Liability insurance coverage in an ocean marine policy

Provision for unexpired risks
Amount set aside on the balance sheet in addition to unearned premiums with respect to risks to be borne by the insurance undertaking after the end of the financial year, in order to pro-vide for all claims and expenses in connection with insurance contracts in force in excess of the related unearned premiums and any premiums receivable on those contracts

Provisions
The terms or conditions of an insurance policy

Proximate Cause
The dominating cause of loss or damage; an unbroken chain of events between the occurrence and damage

Public Liability/Third Party Liability
The insured's liability at law (excluding liability to an employee arising out of employer/employee relationship) to pay compensation for death, injury or illness sustained by any person or damage to property caused by explosion or collapse of boiler and pressure plant or use of lilting and handling plant

Punitive Damages
Damages awarded separately and in addition to the compensatory damages, usually on account of malicious or wanton misconduct, to serve as a punishment for the wrongdoer and possibly as a deterrent to others

Pure Risk
A condition in which there is the possibility of loss or no loss only

Quota Share Reinsurance
It is an automatic reinsurance, whereby the ceding company is bound to cede a fixed percentage of every risk written by it irrespective of the size or quality of the risk.

Quote
An estimate of the cost of insurance, based on information supplied to the insurance company by the applicant.

 

Rate
The pricing factor upon which the insurance buyer's premium is based

Recurring Clause
A provision in some health insurance policies, which specifies an period of time during which the recurrence of a condition is considered a continuation of a prior period of disability or hospital confinement

Reimbursement
The payment of the expenses actually incurred as a result of a accident or sickness, but not to exceed any amount specified in the policy

Reinstatement
The restoration of a lapsed policy

Reinsurance
Insurance placed by an underwriter in another company to cut down the amount of the risk assumed under the original insurance

Renewal
Continuance of coverage under a policy beyond its original term by the insurer's acceptance of the premium for a new policy term

Renewal Notice
The notice sent to the policyholder to remind him that an insurance is due for renewal by insurers

Renewal Receipt
The written evidence that a renewal premium has been paid

Repatriation Expenses
(Under Overseas Mediclaim Policy) Expenses incurred to travel back to home country following sickness abroad

Replacement Cost
The cost to repair or replace property at construction costs prevailing at time of loss; the cost to repair or rebuild property without any depreciation

Representation
Statements made by an applicant in the application that he represents as being substantially true to the best of his or her knowledge and belief, but which are not warranted as exact in every detail

Rescission
Termination of an insurance contract by the insurer on the grounds of material misstatement on the application for insurance

Reserve
Liability set up for particular purposes

Respondentia
An early form of marine insurance on cargo; similar to bottomry, the equivalent on hulls

Restoration
Reinstatement, as the amount of coverage after a loss

Retention
The act of retaining an exposure to loss: also that part of the exposure that is retained

Retrocession
The amount of risk that a reinsurance company reinsures; the amount of a cession which the reinsurer passes on

Retrospective Date
The first date for which claims will be paid under a claims-made policy of liability insurance

Return Premium
An amount due the insured upon cancellation of a policy

Revocable Beneficiary
A beneficiary designation that may be changed by the policy owner without the consent of the existing beneficiary

Rider
Usually known as an endorsement, a rider is an amendment to the policy used to add or delete coverage

Risk
It can be a potential source of loss or the subject matter of insurance itself

Risk Management
A scientific approach to the problem of dealing with the pure risks facing an individual or an organization in which insurance is viewed as simply one of several approaches for dealing with such risks

Robbery
The unlawful taking of property by violence or threat of violence

Running Down Clause
Additional coverage, which can be added to, an Ocean Marine Hull policy to provide protection for damage to another ship caused by collision

Salvage
Recovery made by an insurance company by the sale of property which has been taken over from that insured as a part of loss settlement. The remains of damaged vehicle or any other property

Schedule
A list of coverages or amounts concerning things or persons insured

Self-Insurance
A form of risk financing through which a firm assumes all or a part of its own losses

Settlement
A policy benefit of claim payment

Short period rates
Percentage of annual premiums charged for short period policies

Short Rate Cancellation
Cancellation with a less than proportionate return of premium: also known as Pro Rata Cancellation.

Social Insurance
Compulsory insurance, in which the benefits are prescribed by law and in which the primary emphasis is on social adequacy rather than equity

Solvency margin
Surplus of assets over liabilities

Special Damages
Amount awarded in litigation to compensate for specific identifiable economic loss

Speculative Risk
A condition in which there is a possibility of loss or gain

Sprinkler Leakage Insurance
Insurance against loss from accidental leakage or discharge from a sprinkler system due to some cause other than a hostile fire or certain other specified causes

Standing Charges
Expenses which still have to be met even if a business cannot earn its full income owing to fire or other damage. These expenses do not diminish proportionately as a result of the damage

Statutory Inspections
Plant inspections which are required by law to be carried out at stipulated intervals by a competent person who must also prepare a report in a prescribed form detailing the condition of the plant

Strict Liability
Liability for damages even though fault or negligence cannot be proven

Subrogation
It is defined as the transfer of rights and remedies of the insured to insurers who have indemnified the insured in respect of the loss

Subsidence
Occurs when the ground under a building moves downwards, often as a result of drying out too much

Sum Insured
The limit of liability of the insurers under a policy

Surety Bond
An agreement providing for monetary compensation should there be a failure to perform certain specified acts within a stated period: the surety company, for example, becomes responsible for fulfillment of a contract if the contractor defaults

Surplus
An amount by which the value of an insurer's assets exceeds their liabilities

Surrender Value
Surrender value is the amount payable to the policy holder on his surrendering his right under a policy and terminating the contract of insurance

Surrounding Property
Property belonging to the insured or in his custody or control except for the plant causing the damage or property being lifted

Surveyor
The company official who inspects property proposed and makes recommendations as to rating and loss reduction

Tail coverage
An extended reporting period extension under claims-made liability policies that provides coverage for losses that are reported after termination of the policy

Technical provision
Amount set aside on the balance sheet to meet liabilities arising out of insurance contracts, including claims provision (whether reported or not), provision for unearned premiums, provision for unexpired risks

Tenants Liability
Cover for damage to rented buildings

Theft
The unlawful taking of property of another: the term includes such crimes as burglary, larceny and robbery.

Third party
Someone other than the insured and insurance company

Third party claim
A demand made by a person against a policyholder and any payment that will be made by that company

Third Party Liability
Liability incurred by the insured to another party but excluding contractual liability

Tornado
A whirling wind over land, accompanied by a funnel-shaped cloud. It is usually very violent and destructive in a narrow path, often for many miles

Tort
A civil wrong, other than a breach of contract, for which a court of law will afford legal relied

Total Disability
An illness or injury which prevents an insured person from continuously performing every duty pertaining to his/her occupation or engaging in any other type of work

Total Loss
The complete loss or destruction of all the property insured under a particular policy

Treaty
A reinsurance contract under which the reinsured company agrees to cede and the reinsurer agrees to assume risks of a particular class or classes of business

Turnover
The money earned for goods supplied or services rendered in the course of the business at the premises specified in the policy

Uberrimae Fidei
Means "Utmost Good Faith'. The basis of all insurance contracts - both parties to the contract are bound to exercise good faith and do so by a full disclosure of all information material to the proposed contract.

Umbrella Liability
Insures losses in excess of amounts covered by other liability insurance policies; also protects the insured in many situations not covered by the usual liability policies

Under-insurance
The situation where the Sum Insured is less than the total value of property at risk.

Underwriter
The company receiving premiums and accepting to cover the risk. Also, the person employed by the company who decides whether the company should accept a particular proposal for insurance or application for revival

Underwriting
The process of selecting risks for insurance and determining in what amounts and on what terms the insurance company will accept the risk.

Underwriting Profit or Loss
The amount of money, which an insurance company gains or loses as a result of its insurance operations

Unearned premium
That portion of the original premium for which protection has not yet been provided because the policy still has some time to run before expiration.

Unenforceable Contract
This is one, which lacks some evidential features. The contract is a valid one otherwise, but could not be enforced in a court of law

Uninsurable Risk
Risks not acceptable for insurance due to excessive risk

Utmost Good Faith
A duty imposed on both parties to an insurance contract. The legal duty implies full disclosure of all facts material to the contract during negotiations of the contract

Valuation
Estimation of the value of an item, usually by appraisal

Valued Policy
An insurance contract in which the value of the thing insured and the amount to be paid in case of total loss is settled at the time of making the policy

Vicarious Liability
In law, liability arising out of imputed negligence

Void
Of no force or effect: null

Void Contract
A contract obtained by fraud is a void contract

Voidable Contract
A contract, which is valid until it is treated as void by the aggrieved party, is a voidable contract

Warranty
A statement concerning the condition of the item to be insured which is made for the purpose of permitting the underwriter to evaluate the risk; if found to be false, it provides the basis for void of the policy

Weekly benefits (for Personal Accident Insurance)
They are paid for the period of temporary total disablement following an injury which is admissible under the policy

Workers Compensation
A system of providing for the cost of medical care and weekly payments to injured employees or to dependants of those killed in the course of or arising out of their employment in industry in which Absolute Liability is imposed on the employer, requiring him or her to pay benefits prescribed by law

Written Premiums
The premiums on all policies which a company has issued in some period of time