Jargon Buster - Most common insurance terms explained
Insurance agents can often leave you puzzled when using common industry buzzwords. If you find yourself struggling to keep up with insurance terminology, Plan have put together a list of the most common insurance jargon to help polish your industry knowledge.
ACT OF GOD - Nugent v Smith (1876) “Natural causes directly and exclusively without human intervention and that could not have been prevented by any amount of foresight and pains and care reasonably to have been expected”.
Additional Premium - The term is used to describe a further premium payable by the insured as a result of a policy amendment, that may have increased the risk than proposed at the inception of the policy.
Adjuster - One who investigates claims on behalf of insurers (claims adjuster or loss adjuster).
All Risks - This is used to protect policyholders against any loss or damage to property arising from unexpected causes, except those that are specifically excluded.
Business Interruption -Covers a policyholder for the loss their business endures during a tragedy. This can be related to a closure of the business or works needed to be carried out in the event of a disaster.
Cancellation - Early termination of a policy. Some insurers have a notice period in which a policy may be cancelled. In most common cases, a return premium will be issued to the insured by the insurer. Broker fees are always retained in an event of cancellation.
Commercial Combined Insurance - A number of different commercial insurances put together in a single policy.
Declarations - Can be found at the start of an insurance policy document; it is used to summarise the most important information specific to the policy taken out.
Deferred Premium - The part of a premium, following an arrangement with insurers, is payable by installments.
Employers Liability Insurance - Protects employers against the cost of compensation claims which derive from an employee injury or disease, sustained during the course of their employment.
Ex-Gratia Payments - A payment made by an employer where there is no contractual obligation to do so. It is a Latin word, which means “out of kindness”.
Financial Ombudsman Service (FOS) - A bureau created by major insurance companies to manage the interests of policyholders whose complaints remain unresolved through normal company methods of communication. The service is accessible to all those holding personal cover with the insurers under the scheme. The decision of the Ombudsman is binding on the insurer, although the insured may appeal to the court if necessary.
Gross Premium - This describes the value of gross written premiums before deduction of brokerage and discounts.
Inception Date - Refers to the date that a policy begins. Also known as the start date or effective date, a policyholder has coverage in accordance with the terms of their insurance provider.
Insurance professional - An agent, broker or consultant.
Lapse - The non-renewal of a policy
Legal Cover - Provides assistance to recover uninsured losses (such as excess), medical losses or loss of earnings.
Product Liability Insurance - Is designed to protect your business against the cost of compensation claims if someone is injured by a product your business has manufactured, distributed or supplied.
Professional Indemnity Insurance - Will protect you against the cost of legal fees and compensation in case a claim is made against your business – for providing incorrect advice, losing important documentation or breaking an agreement.
Public Liability Insurance - Designed to cover your business against the cost of compensation and legal claims if a member of the public is caused injury (including death) or their property has been damaged during your work.
Risk Management - is a discipline that intends to minimise the unforeseen circumstances that threaten the assets and earnings of a business.
Underwriting - The process that concludes whether cover will be offered, what is included in the policy provision and at what price.
Wear and Tear - A phrase that explains the amount deducted from claims payments on the basis of gradual deterioration of the property you own, due to age and usage.
Without Prejudice - is applied to statements or discussions that cannot be used as evidence in a court case. These statements are used in the course of genuine negotiations for a settlement.