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Flashcards in Definitions Deck (70)
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1

Caveat emptor

Buyer beware

2

Uberrima fides

Utmost good faith

3

Risk registers

Type of documentation prepared by brokers for underwriters which would include individual exposures and claims experience, site inspection reports and preparation of health and safety reports; essentially a fact-finding tool used when talking to clients

4

Subjectivities

The term sometimes used to refer to terms and conditions, e.g. cover may be provided subject to a survey

5

Affinity routes to market

Tesco, M&S commoditising personal lines insurance

6

Lemonade

An online insurer for home insurance in the USA, promising a quotation within 90 seconds and payment of claims within 3 minutes

7

Subjectivity

A condition of a quotation that must be met

8

Rate per cent

The price in pounds for each hundred pounds of exposure (e.g. rate of 1.5% means the insurer charges £1.50 for every £100 of exposure)

9

Rate per mille

The price in pounds for each thousand pounds of exposure (e.g. 2.5 per mille means the insurer charges £2.50 for every £1,000)

10

Deposit premium

The initial premium that is charged based on an estimate of an adjustable premium where the exposure measure is unknown at the start of the period of insurance

11

Cover note

A document issued as evidence that insurance has been granted pending the issue of a policy or policy amendment documents/endorsements, which is temporary and superseded once the policy and certificate are issued

12

Parole evidence rule

Neither party can rely on any negotiations leading up to the contract, only the contract itself

13

Contra proferentem

The general rule of interpreting an ambiguous contract term against the party that drew it up gives the insurer a real incentive to be clear in their intentions - this term is applied by the courts

14

Recital clause

Preamble - the main purpose is to make the proposal form the basis of the contract

15

Market exclusions

Some general exclusions are common to all general insurance policies

16

Buy back

When you are charged an additional premium for something which is normally excluded

17

Suspensive

Insurers liability discharged from date of breach but resumes once remedied

18

Franchise

A fixed amount or period that acts as a threshold to determine whether claims are payable; once the period is exceeded the claim is payable in full and nothing deducted, whereas if it is not exceeded nothing is payable

19

Continental scale

For permanent partial disablements (PPD) insurers utilise a pre-set scale of benefits called continental scale to calculate lump sum payments

20

Theft

Theft Act 1968 definition; dishonestly appropriating the property belonging to another with the intention of permanently depriving the other of it

21

Flood Re

A reinsurance company owned and managed by insurers, funded by levies on member insurers (£180m), individual levies based on insurer's share of home insurance market, with costs passed on to policyholders based on their risk of flood and to ensure affordability the individual cost is based on council tax bandings so that properties at significant risk of flood can still benefit from access to affordable flood cover without punitive excesses and/or barriers to indemnity

22

Riot

The Public Order Act 1986 defines a riot as a group of 12 or more people, gathered for and carrying out a common purpose with intent and force if necessary, in such a way as to alarm a person of reasonable firmness and courage. Separate scheme in place for Northern Ireland.

23

Gap terrorism/'lone wolf' cover

Where a terrorist type incident occurs but does not meet the definitions of terrorism under an insurer's policy

24

Types of exclusions under an all risks commercial policy

- Absolute exclusions: war, pollution, contamination, consequential loss
- Gradually operating exclusions: corrosion/rust, wind/rain damage to property in the open
- Aspects of cover which can be written into the policy: money, glass, subsidence
- Property or risks more appropriate to another class of business: motor vehicles, aircraft

25

Negotiability of money

How easily it can be converted to cash

26

Escort warranty

Depending upon the amount of money being carried, a specified number of able-bodied persons may need to be present

27

Uninsured working expenses

Those costs which vary in direct proportion to the level of turnover (raw materials etc)

28

Contributory negligence

Reduction in damages to reflect a claimant's own negligence

29

Contractual liability

Agreements that the insured makes with third parties which are over and above the legal interpretation of 'legally liable'

30

Claims-made policy

Policy applies to claims made against the insured during the period of insurance rather than losses occurring during the period of insurance, so most PI policies will also contain a retroactive date. The claim attaches to the year it is made, not when the advice was given.