Jargon Buster
Buildings Insurance
Buildings insurance covers damage to buildings including fixed glass, sanitary ware and signs, landlords' fixtures and fittings, small outside buildings, extensions, annexes and gangways. Buildings insurance can often be included as part of other insurance policies such as Hotels, Shops and Offices.Business Interruption Insurance
Business Interruption Insurance (BI) covers your business against those losses that occur following another insured loss, for example, a fire. Imagine if your business suffered a major fire and you couldn't trade for 6 months whilst the damage is repaired - Business Interruption insurance could pay for your lost earnings or additional costs whilst you cannot trade helping to pay your bills, staff, suppliers etc. There are different levels and types of BI cover available depending on the type of policy you have.Certificate of Insurance
A piece of paper that proves you have a certain type of insurance cover. It is issued mainly to comply with certain statutory requirements. The two main insurance certificates you may see are motor certificates and employers’ liability certificates, both of which are mandatory forms of insurance as set out by government legislation.Comprehensive Insurance
Comprehensive insurance relates to motor insurance and adds accidental loss or damage to the vehicle as well as your third party liability.Contractor’s All Risks (CAR)
A policy which covers contract works, such as new buildings in the course of construction, usually on an ‘All Risks’ basis. Sometimes referred to as ‘Contract Works Insurance’. This type of insurance is especially useful for builders and similar tradesmen and is often purchased along with Public Liability insurance.Due Diligence
This often relates to investigations of a business or person, or the undertaking of work, e.g. professional work with a certain standard of care. It can be a legal obligation, but the term will more often apply to voluntary investigations.Effective Date
The date upon which cover under an insurance policy becomes effective. Usually this will not be until an insurer has accepted the cover/cover change and confirmed cover in writing or over the telephone. In contract law a contract does not come in to force until there has been offer, acceptance and consideration. In terms of insurance the offer would be a quote, acceptance would be your acceptance of the premium and terms and consideration would be payment of the premium or your agreement to pay the premium.Employers’ Liability
A compulsory class of insurance that all employers must have to cover them against claims by employees who are injured at work. A valid Employers’ Liability certificate must be displayed at all locations where employees work.Endorsements
An endorsement is an amendment to the policy either mid term or at inception. Mid term endorsements are usually issued at the request of the Insured. An example of an endorsement would be noting a temporary cover extension to the policy, this would usually be printed on the policy schedule and a new copy sent to the policyholder.Excess
An amount paid by the policyholder towards a claim. For example, the first £250 of each claim. Often referred to as the Insured’s contribution or policyholder’s contribution.Exclusion
This refers to those events or circumstances that are not insured.Fire and Theft
A limited form of cover for motor vehicles offered as an extension to a basic third party only policy which indemnifies the policyholder for damage caused to other people’s property and injury that may be caused to others. The additional ‘fire’ and ‘theft’ offers compensation to the policyholder if the insured vehicle is destroyed or damaged by fire and/or theft.Full Theft Cover
Generally, theft policies cover theft only if it involves forcible or violent entry or exit to/from the premises. Full theft cover extends this cover to include theft if it does not involve forcible or violent entry or exit, for example it would cover someone walking into an office, taking a laptop computer and walking out with it. Full theft cover is not normally available to shops or hotels, which are more susceptible to casual theft. More Th>n Business offers full theft cover as standard on our Office policies.Inception Date
The date from which cover starts, some policies also specify a start time.Indemnity
Indemnity is one of the basic principles of insurance. It states that the Insured should not profit by any claim, but should be put in the same financial position after a loss as they were immediately before it.Many policies now offer “reinstatement” or “new for old” covers which may put the Insured in a better financial position. Household and some commercial policies are usually on a ‘reinstatement’ basis.
Insurance Premium Tax (IPT)
A government imposed tax on most classes of insurance in the UK.Legal Expenses
Cover is provided for the costs incurred in pursuing or defending the legal rights of the business for certain insured incidents. Examples may be legal costs in bringing an action against a third party relating to a contract that has not been fully met, for example a supplier did not supply goods to the insured to the required standard and refuses to rectify the situation. Another example may be costs in defending an action brought against the insured by the tax authorities relating to VAT returns. Costs covered would include solicitors and other legal fees, excluding damages, fines or penalties.Liability Insurance
Covers Legal Liability to third parties. Examples include Employers Liability and Public Liability.Limits of Liability or Indemnity
Insurance policies normally contain a limit stating the maximum amount insurers will pay. This could be for any single event, or for all events occurring in a single policy period depending on the type of policy wording. Limits of liability/indemnity should be checked carefully to ensure they are high enough for your requirements.Loss of Profits
See Business Interruption Insurance.Maximum Indemnity Period
The Maximum Indemnity Period is a limit under a business interruption policy relating to the maximum period over which the insurer will pay for loss of profit/revenue. It is the policyholder’s responsibility to decide upon the Maximum Indemnity Period and to ensure that it is adequate for the business.No Claims Bonus
A premium discount where no claims have been made in previous years, usually on motor policies and usually up to a maximum discount period of five years, although this varies from Insurer to Insurer.Policy
The document(s) describing the cover provided by the insurer, usually includes a policy wording and policy schedule.Policyholder
The insured customer, i.e. a person or company who has bought an insurance policy. Also known as the Insured.Premium
The amount paid by the policyholder to the insurer.Reinstatement
Policies on a “reinstatement” basis offer cover on a “new for old” basis. This generally puts the Insured in a better financial position than before the loss, but this is justified by the fact that second-hand replacement items may not be readily available.RTA
The minimum vehicle insurance cover provided by the Road Traffic Act.Third Party Only
Indemnifies the policyholder for damage caused to other people’s property and injury that may be caused to others, this is the basic requirement by law. It covers your responsibility to any other person or property involved in an accident with your vehicle.Please note: the above terms may not apply to MORE TH>N BUSINESS policies and you should always read your policy documents carefully.
