Insurance Glossary of Terms

A

▶ Accounts Receivable – Uncollected debts due to loss or damage to accounting records.
▶ Act of God – Natural disasters like earthquakes or floods beyond human control.
▶ Adjustment Premium – Final premium determined after policy expiration.
▶ Advance Business Interruption – Covers loss of revenue due to delayed business operations.
▶ Aggregate Limit – The maximum amount an insurer will pay for claims during a policy period.
▶ All-Risk Policy – Covers all perils except those specifically excluded.
▶ Annual Premium – The yearly cost of an insurance policy.
▶ Assurance – Used to distinguish life "assurance" from general insurance.
▶ Aviation Hull and Liability – Covers aircraft damage and liability.
▶ Average or Co-Insurance Clause – Requires policyholders to bear part of a loss if underinsured.

B

▶ Bankers’ Blanket Bond – A package policy for financial institutions.
▶ Beneficiary – The person or entity receiving insurance benefits.
▶ Bloodstock or Livestock Insurance – Covers loss of valuable animals due to accident, sickness, or disease.
▶ Boiler and Pressure Vessel Explosion – Covers damage due to explosion or collapse of boilers.
▶ Bonds – A guarantee contract ensuring contractual performance.
▶ Burglary and Theft – Covers theft following a break-in or by persons concealed on the premises.
▶ Business Interruption – Covers loss of profit due to property loss or damage.

C

▶ Cancellation and Abandonment – Covers financial losses from event cancellations.
▶ Capacity – The maximum coverage available from insurers in a market.
▶ Caravan and Trailer Insurance – Covers loss or damage to caravans and trailers.
▶ Catastrophe Insurance – Covers large-scale disasters like hurricanes and wildfires.
▶ Claim – A request made for insurance payment after a loss.
▶ Claimant – The person making a claim.
▶ Claims Incurred But Not Reported (IBNR) – Claims that have occurred but haven’t been reported yet.
▶ Compulsory Third Party (CTP) – Insurance covering third-party injuries from road accidents.
▶ Construction Risks / Liability – Covers damage to construction sites and legal liability.
▶ Corporate Travel Insurance – Covers business travel risks like medical expenses and lost baggage.
▶ Cover Note – Temporary coverage before a policy is issued.
▶ Crop Insurance – Covers loss of crops due to natural disasters.
▶ Customs and Payment Bonds – Covers liability under the Customs and Excise Act.

D

▶ Deductible – The portion of a loss the insured must pay before insurance applies.
▶ Deposit Premium – An initial payment for insurance, adjusted later based on risk.
▶ Directors’ and Officers’ Liability – Protects company directors against personal losses due to wrongful acts.
▶ Disability Insurance – Covers income loss due to injury or illness.
▶ Disclosure – The obligation to provide relevant information to an insurer.
▶ Dual Basis Payroll – Provides payroll protection over two periods after business interruption.

E

▶ Economic Loss – Covers financial losses unrelated to injury or property damage.
▶ Electronic Equipment Insurance – Covers IT and electronic equipment.
▶ Employee Benefits – Includes superannuation, disability, and life insurance.
▶ Employers’ Liability – Protects businesses from claims related to employee injuries.
▶ Employment Practices Liability – Covers claims of wrongful termination, discrimination, or harassment.
▶ Environmental Impairment Liability – Covers liability for pollution-related damages.
▶ Extended Warranty – Covers breakdowns after a manufacturer’s warranty expires.
▶ Extra Territorial Workers’ Compensation – Covers employees working outside their home state or country.

F

▶ Fidelity Guarantee – Covers loss due to employee fraud or dishonesty.
▶ Film / Film Producers Guarantee – Covers financial risks in film production.
▶ Fine Arts Insurance – Covers valuable artwork in exhibitions or transit.
▶ Fire and Extraneous Perils – Covers fire, lightning, storms, and riots.
▶ Fire Services Levies – Premium loadings to fund fire brigades.
▶ Forged Share Transfer – Covers liability from fraudulent stock transfers.
▶ Franchise Clause – Requires claims to exceed a certain amount before being paid.

G

▶ General Liability Insurance – Protects businesses from third-party claims of injury or damage.
▶ Glass Insurance – Covers breakage of glass in commercial and residential properties.

H

▶ Hazard – A condition that increases the chance of a loss.
▶ Homeowners Insurance – Covers damage to a home and personal belongings.

I

▶ Indemnity – Restores the insured to their financial position before a loss.
▶ Industrial Special Risks Insurance – Covers large commercial properties against multiple risks.
▶ Insurance Certificate – Proof that a policy is active.

J

▶ Joint Policy – A policy covering two or more insured parties.
▶ Judgment Bond – A bond guaranteeing payment of a legal judgment.

K

▶ Key Person Insurance – Protects businesses from financial loss due to the death or disability of key employees.

L

▶ Legal Expenses Insurance – Covers legal costs.
▶ Loss Adjuster – A professional assessing insurance claims.
▶ Loss of Hire Insurance – Covers income loss when an insured asset is unavailable.

M

▶ Machinery Breakdown Insurance – Covers sudden mechanical failures.
▶ Marine Insurance – Covers cargo and ships against losses at sea.
▶ Motor Vehicle Insurance – Covers vehicles for damage and liability.

N

▶ Named Perils – Covers only specified risks in a policy.
▶ Negligence – Failure to take proper care, resulting in damage or injury.

O

▶ Occupational Accident Insurance – Covers work-related injuries for independent contractors.
▶ Occurrence Policy – Covers claims occurring during the policy period, regardless of when reported.

P

▶ Personal Accident and Illness – Provides benefits for injuries or illness.
▶ Political Risk Insurance – Covers losses due to political instability.
▶ Premium – The cost of an insurance policy.
▶ Product Liability – Covers legal liability for defective products.
▶ Professional Indemnity Insurance – Covers professionals for negligence claims.

Q

▶ Quote – An estimate of insurance costs based on risk assessment.

R

▶ Reinsurance – Insurance purchased by insurers to reduce risk exposure.
▶ Renewal – The continuation of an insurance policy for another term.
▶ Risk Management – The process of identifying and mitigating risks.

S

▶ Subrogation – The insurer’s right to recover costs from a third party.
▶ Sum Insured – The maximum payout under a policy.

T

▶ Term Life Insurance – Life insurance for a specified period.
▶ Third-Party Liability – Covers damage to others caused by the insured.

U

▶ Umbrella Liability Insurance – Provides additional coverage beyond primary policies.
▶ Underwriting – Assessing risk to determine policy terms and premiums.

V

▶ Valuation Clause – Defines how the insured value of property is determined.
▶ Vehicle Fleet Insurance – Covers multiple company-owned vehicles under one policy.

W

▶ Workers’ Compensation – Covers employees’ medical expenses and lost wages due to work injuries.
▶ Warranty – A policy condition that must be met for coverage to apply.

X, Y, Z

▶ Yield Protection – Covers farmers against low crop yields.
▶ Zero Depreciation Policy – Covers the full cost of replacing damaged parts without depreciation deductions.