An unplanned event, unexpected and undesigned, which occurs suddenly and may be insured against.
If you are found to be under-insured, the insurer’s liability will be limited to that proportion where the amount of cover is compared to the value at risk. This ratio is then applied to your loss. In simple terms, if you have bought only half the cover you should have, your insurers will only pay you half your assessed loss.
Beyond Economic Repair
Goods are deemed to be beyond economic repair where the cost of repairing the insured property exceeds the value of that property. In such cases the insurance company may pay the claimant the market value of the insured property at the date of loss, subject to the terms of the policy.
This insurance covers a business in the event of the loss rendering the business inoperable or hindered by an event such as a fire or a breakdown of machinery. The policy will define the gross profit and uninsured working expenses within the policy wording, which will be subject to increased costs of working and savings.
Certificate of Insurance
A document explaining the insurance cover purchased by the insured. A Certificate of Insurance does not always detail all its terms, which are contained in a separate insurance policy.
An insured party who has undergone a loss, which they believe to entitle them for compensation under the terms of their insurance policy.
Degree of Under-insurance
The amount of compensation you are entitled to depends on the circumstances and on your particular contract of insurance. Business insurance policies may differ from residential policies where instead of applying average, different degrees of compensation may be awarded depending on how under-insured you are.
Insurers will pay up to – but not beyond – the minimum necessary to place you back in the same position as previous to the loss.
Employers’ Liability Insurance
A compulsory for all employers. Employers liability insurance is required in case any employees pursue their employer for compensation in case of (for example) unfair dismissal, sexual discrimination, or injury in the workplace.
The agreed amount of some or all losses arising under an insurance contract that must be borne by the insured.
A term in an insurance contract, which excludes the insurer from liability for specified types of loss. An exclusion may apply throughout a policy or it may be limited to specific sections of it.
Defined within an insurance policy. In simple terms: sales, less purchases, adjusted for opening and closing stock.
Increased Cost of Working
Insurers are happy to spend a “pound” to save a “pound and a penny” – subject to the economic limit.
The principle under which a claimant is restored (so far as possible) to the same financial position that they were in immediately prior to the insured loss. As account is taken for age, wear, tear, and depreciation, this differs from “New for Old”.
A contract whereby an insurer promises to pay the insured after uncertain events in exchange for the payment of a premium payment by the insured.
The company who has undertaken to cover the risk of the policyholder, so that, in the event of any loss as stated in the contract, the insured party is recompensed for their loss. The insurance company effectively bets the insured party that the risk will not happen.
A legal contract, which states the terms of the agreement between the insured party and the insurance company. This document will contain exclusions of warranties and other clauses, which may require to be interpreted by professionals.
A person who is insured under a contract of insurance. This person is also referred to as the policyholder.