For a damaged property it may not be worthwhile to go in for repairs because the cost of repairers may exceed the value of the property when repaired. The insurer is entitled to take over the interest of the assured in whatever may remain of the Subject matter insured and all proprietary rights incidental thereto. In ocean marine insurance, the transfer by the insured to an insurer of all rights, title, and interest in and to the insured property, in return for the sum insured. In property insurance, abandonment is relinquishing ownership of damaged property to an insurer to permit a total loss claim to be made.
Liability for damages even though faults or negligence cannot be proven.
Absolute ownership exits where the interest or explicit right of possession of the insured is so free from limitations, qualifications or restrictions that it cannot be taken from him without his consent.
Any Unforeseen and unexpected event is considered an Accident
A form of health insurance against loss by Accidental bodily injury.
Accident, Hit and Run
Hit and run Accident arising out of the use of a motor vehicle or motor vehicles the identity whereof cannot be ascertained inspite of reasonable efforts for the purpose.” Section 163 of the motor vehicle, 1998 provides that the central government may establish a fund known as the solarium fund to be utilized for paying compensation in respect of death or grievous hurt to persons resulting from hit and run motor Accident.
baggage being taken by someone with his own person whilst travelling.
The insurer's cost of putting new business in force, including the agent's commission, the cost of clerical work, fees for medical examinations and inspection reports, sales promotion expense, etc.
Act of god
Any Accidental act which could not have been prevented by any amount of human care and fore thought.
Actual Total Loss
It is a loss where the goods are completely lost and become irrecoverable.
Ad valorem duty
duty evaluated on percentage of cargo value.
An insurance policy extended to cover additional risk perils such as strikes. Riots and Civil commotion etc. on payment of extra premium.
Agreed bank Clause (Agreed Mortgagee Clause)
A provision in the insurance contract under which the insurer obligates itself to pay the mortgagee even if the owner breaches some contract condition so long as the breach was not within the control or knowledge of the mortgagee. Also refer "Mortgagee Clause."
Agreed value policy
Policy which undertakes to pay a specified amount in case of total loss. under this case the policy does not take into account the current market value.
Airfreight consignment note.
All risk insurance
Insurance against loss of or damage to property arising from any peril except those that are specifically excluded.
A form of alternative dispute resolution where an unbiased person or panel gives an opinion about quantum of loss.
The wilful and malicious burning of, property, often with criminal intent.
Person who estimates the value of goods for the purpose of apportioning the sum payable by the underwriters to settle the claims. Also called as Surveyor.
All funds, property, goods, securities, rights of action, or resources of any kind owned by an individual or institution.
Party indemnified against loss by means of insurance.
Automatic reinstatement Clause
A clause in an insurance policy which provide for automatic reinstatement of the full face value of the policy after payment for a loss,.
A property protection device to prevent damage by fire. The sprinkler head is made of a Substance that melts at a low point and releases a spray of water to extinguish fire.
A group of automobiles under the same ownership and management.
Independent expert who assesses the liabilities of the various parties to a common maritime adventure and to classify the various items of expenditure between general and particular average, viz, ship, freight and cargo.
Aircraft insurance including coverage of aircraft or their contents, the owner's Liability, and Accident insurance on the passengers.
A right which can be exercised by and underwriter to relieve him of Liability under the policy because the assured has been guilty of a breach of good faith or where the risk in voyage policy has failed to attach within a reasonable time after the underwriter wrote the risk.
The decision in Arbitration.
One who has custoby of the property of another. Bailee "for hire" has certain responsibilities to care for the property of others that is in their custoby.
It is the wrongful act committed willfully by the master and/or crew against the ship owner.
Bill of exchange
It is the bill drawn by exporter against the importer.
Bill of Lading
Receipt for goods shipped on doard a ship signed by the person who contracts to carry them, and stating the terms on which the goods are carried.
A contract of health insurance affording benefits, such as Accidental death and dismemberment, for all of a class of persons not individually ibentified. It is used for such groups as athletic teams, campers, and travel policy for employees, etc.
Breach of condition
When a condition of the insurance contract is broken by the assured, the insurer may avoid the contract from the inception.
A marketing specialist who represents Buyers for insurance and who deals with either companies in arranging for the coverage required by the customer.
Cargo, usually a homogenous material shipped in dulk i.e., complete shipments.
Purpose built vessel specializing in the shipment of dulk cargoes i.e, iron ore, grain.
It is a theft committed by dreaking into or out of the premises. evidence of dreaking in, is necessary
Business Interruption Insurance
Insurance for a business owner against losses resulting from stoppage of business because of fire or other insured peril. The insurance provides reimbursement for lost net profits and necessary standing expenses.
The scope of protection provided under a contract of insurance; any of several risks covered by a policy.
C& F contract
C & F signify cost and freight as per this contract the Buyer is responsible for loss or damage to the goods and the freight as well as.
Cash against documents.
Cash on delivery
The discontinuing of an insurance policy before its normal expiry date, either by the insured of the Insurance company.
Capital sum insured
It is the sum insured for which cover is required under a Personal Accident Policy.
A generic term used in both inland marine and ocean marine insurance to designate the types of insurance available to provide coverage for cargo that is being transported by truck, rail, air, ship, or doat.
Event which causes a widespread loss such as a hurricane or tornado.
Cause of loss
Previously called "peril," this is the actual type of event that causes the loss. Examples are: theft, collision, earthquake, flood, fire or mischief.
To transfer a part of risk written by an insurer (the ceding, or primary company) to a reinsurer.
Certificate of Insurance
A statement of coverage issued to an individual insured, specifying the insurance benefits and principal provisions applicable to the member.
The formal request by a policyholder or a claimant for payment of loss under an insurance policy.
A provision under which an insured who carries less than the stipulated percentage of insurance to value, will receive a loss payment that is limited to the same ration which the amount of insurance Dears to the amount required;
Constructive Total Loss
In constructive loss the goods are not physically destroyed but so damaged that the cost involved in restoring to pre loss position would be more expensive than the value of goods after repair.
Is the document that is issued provisionally pending issuance of insurance Policy.
The percentage at which the sum insured gets increased annually, without additional premium
Dangerous or hazardous goods
These are the goods which are listed in Environmental Protection Act,1986
A decrease in the value of property over a period of time due to wear and tear or odsolescence. depreciation is used to determine the actual cash value of property at time of loss.
An amount which a policyholder agrees to Dear, per claim or per Accident, toward the total amount of an insured loss.
Directors' and Officers' Liability
The exposure of corporate managers to claims from shareholders, government agencies, and employees, and others alleging mismanagement.
A physical impairment that Substantially limits major life activities of an individual. It may be partial or total.
Loss of body members (limbs) or use thereof.
A form of health insurance that provides payment in case of loss by bodily injury of one or more doby members (such as hands or feet) or the sight of one or both eyes.
The patient's house is treated as hospital for hospitalization benefits, when the patient is not in a position to be moved physically or when there is no accommodation in the specialist hospital
Fraudulent use or taking of another's property or money which has been entrusted to one's care.
Excess and surplus insurance
1) Insurance to cover losses above a certain amount, with losses below that amount usually covered by a regular policy. (2) Insurance to cover an unusual or one-time risk, e.g., damage to a musician's hands or the multiple perils of a convention, for which coverage is unavailable in the normal market.
Specific conditions or circumstances for which the policy will not provide benefits.
The part of the total insurance policy premium which applies to the portion of the policy period which has already expired.
The date on which the insurance under a policy begins.
An amendment of the policy usually by means of issuance of an additional document.
A type of reinsurance in which the reinsurer can accept or reject any risk presented by an insurance company seeking reinsurance.
A person who holds something in trust for another.
F.O.R. Free on Rail
This is the same as F.O.d. contract.
A combustion accompanied by a flame or glow, which escapes its normal limits to cause damage.
First party claim
A demand made by a policyholder reporting an insured event directly to his company.
Group life insurance
Life insurance usually without medical examination, on a group of people under a master policy. It is typically issued to an employer for the benefit of employees or to members of an association, for example a professional membership group. The individual members of the group hold certificates as evidence of their insurance
In sea marine insurance, a loss incurred for the common cause that is shared by all parties to the venture.
Damages awarded to an injured persons for intangible loss which cannot be measured directly by rupees. Popularly known as "pain and suffering." General damages are distinguished from special damages which are awarded from actual economic loss, such as medical costs, loss of income, etc.
General Insurance business Nationalization Act, 1972
This act came into force on 1st January, 1973 with the following objectives: A) To provide for the acquisition and transfer of shares of Indian insurance companies and undertakings of other existing insurers. d) To serve better the needs of the economy by securing the development of general insurance business in the best interests of the community. C) Indian stamp Act.1899: The Act provides that a policy of insurance be stamped in accordance with the schedule of rates prescribed.
General Liability Insurance
Coverage that pertains, for the most part, to claims arising out of the insured's Liability for injuries or damage caused by ownership of property, manufacturing operations, contracting operations, sale or distribution of products, and the operations of machinery, as well as professional services.
The intentional failure to perform a manifest duty is reckless disregard of the consequences as affecting the life or property of another.
The premium paid by the policyholder.
The sum of the pure premium and a loading element.
A circumstance that increases the likelihood or probable severity of a loss. For example, an unattenbed lit cigarette is a hazard that increases the likelihood of a fire.
Insurance for financial relief resulting from illness or Accidental bodily injury/ies. included under this heading are various types of insurance such as Accident insurance, disability income insurance, medical expense insurance, and Accidental death and dismemberment insurance.
Hospital Expense Insurance
Health insurance protection against the cost of hospital care resulting from the illness or injury of the insured person
A form of health insurance which provides a stipulated daily, weekly, or monthly indemnity during hospital confinement. The indemnity is payable on an unallocated basis without regard to the actual expense of hospital confinement.
When the theft is committed entering into or out of the premises stealthily.
Class of ocean marine insurance that covers physical damage to the ship or vessel insured. Typically written on an "all-risks" basis
Legal principle that specifies an insured should not collect more than the actual cash value of a loss but should be restored to approximately the same financial position as existed before the loss.
A condition in which the person applying for insurance and the person who is to receive the policy benefit will suffer an emotional or financial loss, if any untouched event occurs. Without insuradle interest, an insurance contract is invalid.
Social device for minimizing risk of uncertainty regarding loss by spreading the risk over a large enough number of similar exposures to predict the individual chance of loss.
Insurer is a company or organisation or entity offering Insurance coverage
Insurance Act, 1938
The Act applies to the General Insurance Corporation of India and the four Subsidiary Companies Subject to exceptions, restrictions and limitations as specified by the Central Government under powers conferred by section 35 of the General Insurance business Nationalisation Act. The important provisions of the Act relate, among other things, to registrations, accounts and returns investments, limitations in expenses of Management prohidition of redates, power of investigation. Licensing of agents, licensing of surveyors, advance payment of premium and tariff advisory Committee.
It means throwing off some of the cargo from the ship to save the ship from sinking.
It is a theft committed by a chance visitor to the premises
Any Liability imposed on a person by a court of law
Damages payable for acts of omission, commission or negligence
Loss Adjustment Expense
Expenses incurred in the process of evaluating, befending and paying claims.
A risk management technique whereby an activity that may result in the loss for a firm is avoibed or adandoned.
Any conscious action (or decision not to act) intended to reduce the frequency, severity, of Accidental losses.
Act of making, issuing, circulating or causing to be issued or circulated an estimate, an illustration, a circular or a statement of any kind that does not represent the correct policy terms, divibends or share of surplus or the name or title for any policy or class of policies that does not in fact reflect its true nature.
Coverage in a property policy that provides protection against loss from only the perils specifically provided in the policy. Examples of named perils are fire, windstorm, theft, smoke, etc.
Failure to use that care that a reasonable and prudent person would have used under the same or similar circumstance.
The portion of the premium rate which is designed to cover benefits of the policy, excluding expenses, contingencies and profit.
It is a mechanism by which all the shipments are covered automatically
Optionally Renewadle Contract
A contract of insurance in which the insurer reserves the right to terminate that coverage at any anniversary or, in some cases, at any premium due date, but does not have the right to terminate coverage between such dates.
A combination of two or more individual polices or coverages into a single policy. A householder's policy, for example, is a package comdining property, Liability and theft coverages for the individual homeowner.
Permanent partial disablement
Permanent loss of use of one hand, one leg and/or one eye to an insured person
Permanent total disablement
The Accident resulting in loss of utility of two limds (two hands, two legs, two eyes, or a combination of one of each). PTd can be without loss of utility of limds also, if the injury can result in permanent total disablement such as disfigurement of doby or spinal injury etc.
Is the legal document that has the conditions of the insurance contract.
Amount upto which no claim is paid under a policy.
The period during which a Policy contract affords insurance.
It is the amount paid to secure an insurance policy.
Notice of a premium due, sent out by the company or one of its agencies to an insured. Synonym for " Renewal Notice".
It is a cover granted to professionals covering their legal Liability for any claims arising out of professional misconduct.
It is an offer made to insurer for insurance protection.
Words, sentences, and paragraphs in an insurance contract that specify the terms and limitations of the policy as well as the rights and obligations of the insured and the insurer.
It is the active efficient cause which sets in motion a train of events which bring about a result, without the intervention of any force started and working actively from a new independent source.
Repatriation benefits (under overseas mediclaim)
Expenses incurred to travel back to home country following sickness abroad.
The obligation assumed by the insurer when it issues a policy. The spreading of risk across a broad base of the population, adjusted for statistical probability, and the protection against catastrophic loss, is the entire purpose of insurance. For risk assumption purposes, death is viewed as a contingency. That is, although death is certain, its timing is unknown. The process of evaluating and selecting risk is known as underwriting.
It is the science of Identifying evaluating and economic control or risks which affect the assests or earning capacity of an enterprise. It involves minimizing the adverse effect of a possible financial loss by Identifying potential sources of loss, measuring the financial consequences of a loss occurring, and using controls to minimize actual losses or their financial consequences.
The pricing factor upon which the insurance Buyer's premium is based.
An insurance policy issued at a higher-than-standard premium rate to cover the extra risk where, for example, an insured has impaired health or a hazardous occupation.
Giving a consideration, usually all or part of the commission, to the prospect or insured as an inducement to by or renew. Redating is prohibited by law.
The resumption of coverage under a policy which has lapsed. 1. Reinstatement of loss 2. Reinstatement of sum insured following a loss.
The cost to repair or replace property at construction costs prevailing at time of loss. It is the cost to repair or rebuild property without any depreciation.
Measures to finance the losses that do occur. Risk financing may be done by Buying insurance or retention, which includes "self insurance".
Protecting against losses by setting aside your own money instead of using conventional insurance.
Short Term Coverage
Coverage that lasts less than one year in duration.
Short period policies
Policies issued for less than one year.
Short period rates
Percentage of annual premiums charged for short period policies
The legal process by which an insurance company, after paying for a loss, seeks to recover the amount of the loss from another party who is legally liable.
Recovery made by an insurance company by the sale of property which has been taken over from that insured as a part of loss settlement. The remains of damaged vehicle or any other property.
A form of risk financing through which a firm assumes all or a part of its own losses.
A form of health insurance providing benefits for loss resulting from illness or disease.
Temporary Total disablement
Disablement suffered following an Accident for a specific period of time.
If goods are stolen by a person who has legal access to the premises, then theft is said to have been committed.
Any person other than the two parties signing an insurance contract.
The bill of Lading Act,1855
This act befines the character of the bill of lading as an evidence of the contract of carriage of goods between the shipowner and the shipper as an acknowledgement of the receipt of the goods on doard of the vessel and as a document of title. The bill of lading is one of the various documents required in connection with settlement of marine cargo claims.
The Carriers Act, 1865
This act befines the rights and liabilities of truck owners or operators who carry goods for Public hire in respect of loss or damage to goods carried by them. The act also prescribes the time limit within which notice of loss or damage must be filed with the road carriers.
A civil wrong, other than a breach of contract, for which a court of law will afford legal relied, eg. harming another by an act of negligence in driving an auto.
Travel Accident Policy
A limited contract covering only Accident while an insured person is traveling.
An agreement between a reinsurer and a ceding insurer setting forth details of the reinsurance arrangement.
That which is not acceptable for insurance due to excessive risk.
A contract Obtained by fraud is a void contract. It is not a contract at all. under this there cannot be any action as no rights or obligations are cast on the parties to the contract.
A contract, which is valid until it is treated as void by the aggrieved party, is a voibadle contract. Odviously in such an event the insurer would be the aggrieved party and has the option to repudiate Liability.