The insurance industry uses a number of technical terms, often chosen for their precise meanings, which might not be as clear to the general public as they are to members of the industry. This glossary aims to provide explanations for some of the core words and phrases commonly encountered in insurance documents.
Natural events solely caused by uncontrollable forces, devoid of human interference and impossible to prevent even with reasonable foresight and precautions.”
An additional document outlining agreed-upon modifications to an insurance contract, often referred to as an “endorsement.”
Signifies an extra payment by the insured due to policy changes that may have increased risk, altered conditions, or modified the sum insured.
An individual appointed by insurers to investigate and evaluate claims, commonly known as a claims adjuster or loss adjuster.
Denotes the maximum sum an insurer will pay for all accumulated claims within a specific insurance period.
Refers to insurance covering property loss or damage caused by any unforeseen event except those explicitly excluded.
Although interchangeable with insurance, is typically used in life cover, implying certainty of an event compared to the probability implied by insurance.
Clause in insurance policies restricts the claim payout proportionally to the under-insurance compared to the total value of the insured item in the event of a loss.
Covers expenses and lost earnings due to events like fire or flood, forcing temporary closure or relocation.
Is a document issued by insurers as proof of active insurance coverage, some of which, like motor or employer’s liability certificates, are legally required.
Signify injury or loss leading to the insured’s liability under a policy issued by the insurer.
Bundles various commercial insurances into a single package.
Refers to the deliberate suppression of a material fact by an insurance proposer, often rendering the contract null and void.
Involves insurance coverage for losses following direct damage, such as loss of profits or use insurance.
Differs from typical policies by not requiring renewal; it remains in force until canceled by either the insured or the insurer.
Protects businesses from data breaches, cyber attacks, and associated costs like theft or employee fraud.
Shields companies against prosecutions or lawsuits for managerial mistakes or negligence in areas like health and safety or tax compliance.
Is the amount the client must contribute to an insured claim, such as a policy having an excess of £250.
Is legally mandatory for businesses employing people, protecting against employee lawsuits for work-related injuries or illnesses.
Defends a company’s managers against claims of discrimination, wrongful dismissal, or unfair redundancy from employees or former employees.
Safeguards professionals against legal claims alleging negligence in their work, also known as Professional Indemnity (PI) insurance.
Is the insurer’s principle aiming to restore the insured to the pre-loss position as closely as possible.
In business interruption insurance covers the duration of disruption after an insured peril.
Necessitates the policyholder’s recognized interest in the insured item, benefiting from its safety or freedom from liability.
Is the amount payable by the insurer in case of total loss, based on the insured’s interest in the occurrence or event.
Provides a lump sum if a vital person in a business cannot work due to illness or injury.
Is the financial cap of coverage within a policy, either per claim (“any one claim”) or overall (“aggregate”) during the policy period.
Is an approved broker by Lloyd’s Council, authorized to transact business directly with underwriters at Lloyd’s.
Evaluates claim sizes for insurance firms and assists in recovery after an insurance claim.
Negotiates claims for a fee, typically a percentage of the claimed amount, acting on behalf of the claimant.
Refers to an underwriting member of Lloyd’s.
Compensates without deducting for depreciation for lost or destroyed property.
Protects business buildings, contents, and may include business interruption, liabilities, and legal expenses coverage.
Indicates the duration of an insurance contract, specified in the policy documents.
Compensates for injuries preventing work, temporarily or permanently, for the insured or an employee.
Is a document issued by an insurer outlining terms and conditions, serving as legal evidence of the insurance agreement.
Is the individual to whom the policy is issued, also referred to as insured or assured.
Is a document detailing specific information regarding a particular risk within an insurance contract.
Is the price paid to purchase an insurance policy, calculated based on the risk of a claim occurring.
Protects against claims from customers or third parties alleging mistakes or breaches.
Covers businesses against injury or property damage claims from third parties.
Involves restoring or rebuilding damaged insured property instead of settling through a monetary sum.
Is the process of extending insurance from one period to the next.
Within a policy contains unique information related to a particular risk.
Is the maximum payout an insurer will make in the event of a claim.
Occurs when the sum insured in an insurance policy is insufficient to cover the risk, potentially leaving the insured out of pocket during a claim.
Refers to primary insurance as opposed to excess insurance.
Is an individual who accepts business on behalf of an insurer.
Represents the depreciation in insured property due to usage, deducted from claims payments.
Indicates discussions or correspondences during disputes or negotiations, prohibiting their use as evidence without both parties’ consent. It’s also used by an underwriter when paying a claim that might not strictly apply to the policy, ensuring it’s not considered a precedent for similar claims in the future.
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