PIF - Insurance Terminology

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Insurance Terminology


  1. Accident
    An unexpected event resulting in undesirable consequences, not intended or planned by the insured.
  2. Accident Frequency
    The measurement of the number of accidents occurring over a specific period.
  3. Accommodation Business
    Insurance business underwritten as a favor to a client, agent, or broker, despite its undesirable results, to retain better business.
  4. Account Agent
    An insurance agent authorized to produce business and collect premiums, with temporary credit before remittance.
  5. Accountants Clause
    A clause in business interruption policies allowing the insured’s accountants to prepare statements to support a claim.
  6. Accumulation
    The concentration of risks in one area, which could lead to significant losses if a single event strikes.
  7. Act Liability Only
    Motor third-party liability insurance covering only what is required by traffic law.
  8. Actual Total Loss
    A total loss where the insured property is destroyed, transformed, or rendered unusable.
  9. Actuary
    A professional applying probability, statistics, demography, and finance to insurance and pensions.
  10. Additional Damage Clause
    A clause in fishing vessel insurance making negligence claims subject to a deductible under machinery clauses.
  11. Additional Perils
    Extra perils covered beyond the standard list, such as flood or windstorm in fire insurance.
  12. Additional Premium – Reinsurance
    An extra premium charged by the reinsurer when the original insurer collects additional premiums.
  13. Adjuster
    A specialist who investigates claims, assesses damages, and determines compensation.
  14. Advance Premium
    An initial premium collected as a deposit, later adjusted to the actual premium.
  15. Aggregate Excess of Loss Reinsurance
    Marine reinsurance covering losses beyond the cedant’s retention, subject to an aggregate cap.
  16. Aggregate Stop Loss Reinsurance
    Reinsurance covering the cedant when total losses exceed a set amount for a portfolio.
  17. Aircraft Passenger Insurance
    Covers passenger injury or death in aviation, often regardless of legal liability.
  18. All Other Perils
    In marine insurance, perils similar in nature to those named in the policy.
  19. All Risks
    Insurance covering all risks except those specifically excluded.
  20. All Risks Whatsoever
    An extension of “All Risks” offering broader but still accidental/insurable coverage.
  21. Amount at Risk
    The actuarial difference between the sum insured and the reserve held.
  22. Arbitration
    A clause specifying dispute resolution outside court by arbitrators.
  23. Arrived Damaged Value
    The value of goods upon arrival at destination in damaged condition.
  24. Arrived Sound Value
    The value of goods at destination in undamaged condition.
  25. Assessmentism
    An estimation or speculative assessment in insurance.
  26. Assessor
    An expert appointed to evaluate a claim and compensation.
  27. Assignment
    The legal transfer of rights under an insurance contract.
  28. Assignor
    The party transferring rights under an insurance policy.
  29. Associated Company
    A company affiliated with or controlled by another.
  30. Assume
    To accept or undertake a risk.
  31. Assuming Company
    A reinsurer that accepts reinsurance risks.
  32. Assurance
    Term used in life/marine insurance, often British, instead of “insurance.”
  33. Assured
    The insured party, especially in life/marine/Lloyd’s.
  34. Assurer
    The insurer or insurance company.
  35. Automatic Cover Clause
    Automatically extends cover to new machinery/boilers purchased during the policy.
  36. Automatic Reinstatement
    Restores the sum insured automatically after a claim, usually with an extra premium.
  37. Automatic Reinsurance Treaty
    A treaty where the reinsurer automatically accepts a share of all risks of the cedant.
  38. Automatic Termination of Cover Clause
    Clause in war/strike ship insurance ending cover on major events like global war.
  39. Av. (Average)
    Marine: partial loss; General: proportional underinsurance clause.
  40. Average Adjuster
    Marine expert settling claims, esp. general average cases.
  41. Average Agent
    Agent inspecting damaged goods and proposing measures.
  42. Average Bond
    A bond signed by cargo owners agreeing to share general average expenses.
  43. Average Clause
    Provision reducing payouts if underinsurance exists.
  44. Average Condition
    Clause reducing claims proportionally when sum insured < actual value.
  45. Average Disbursement Clauses
    Allow shipowners to recover parts of general average or salvage expenses.
  46. Average Rate
    The average premium rate in fire insurance across multiple properties.
  47. Average Statement
    Detailed account by an adjuster showing general average expense distribution.
  48. Average Warranty
    Clause fixing a deductible percentage in partial marine losses.
  49. Back Letter
    Document where shipper indemnifies a carrier for issuing a non-clean bill of lading.
  50. Balance Statement
    Reinsurance statement showing premiums earned vs. claims paid.
  51. Balanced Portfolio
    A diversified portfolio minimizing large loss impact.
  52. Barratry
    Fraudulent acts by a ship’s master or crew harming the owner.
  53. Base Premium
    The standard premium used for underwriting/reinsurance calculations.
  54. Base Value
    Insured value of assets at policy inception.
  55. Basic Rate
    The base rate before surcharges or discounts.
  56. Basis of Evaluation
    Cargo valuation formula: cost + freight + insurance + profit margin.
  57. Benefit of Insurance
    Clause ensuring only the insured/assignee gets benefits, not third parties.
  58. Benefit of Salvage
    Clause giving insurers salvage rights after paying claims.
  59. Benefit Policy
    A policy paying fixed benefits instead of indemnity.
  60. Beyond Control of the Assured
    Goods under custody of third parties beyond the insured’s control.
  61. Bill of Exchange
    A financial instrument for deferred/future payment.
  62. Bill of Lading
    Shipping document acknowledging receipt and transport terms.
  63. Bill of Lading Clause
    Old clause protecting cargo owners when carrier liability was limited.
  64. Bill of Lading Freight
    Freight charges often included in insured cargo value.
  65. Blanket Insurance Policy
    Covers multiple risks/properties under one sum insured.
  66. Block Limit
    Maximum value underwritten for all risks in one block/building.
  67. Bottomry
    Old maritime loan secured against a ship, repayable only if voyage is safe.