Our Glossary of Insurance Terms

BEDROOM
A bedroom is generally defined as a room either originally designed for sleeping in (even if now used for other purposes), or later converted for sleeping in.

BODILY INJURY
Physical harm or damage to someone’s body including death or disease.

BUILDINGS
Any permanent structure, including the foundations, walls and roof, as well as items that are fixed to and form part of such structure e.g. kitchen cupboards, built-in bookshelves, fitted wardrobes, fixed fuel tanks, underground service pipes, cables, drains and sewers, driveways, patios, garages, sheds and fences within the grounds of your property, which belong to you or for which you are legally responsible.

BUSINESS INSURANCE
Insurance for business firms, governmental units or non-profit organisations to protect against losses through unforeseen circumstances in return for the payment of a premium.

BUSINESS INTERRUPTION INSURANCE
Cover that pays out expenses and lost earnings caused by an event, such as flood or fire, which forces your business to close temporarily or relocate.

BUY-TO-LET
Residential properties typically bought with a Buy-to-Let mortgage to let, or rent out, to tenants. BUY-TO-LET insurance is a specific type of Property Owners insurance which covers the Building owner against loss or damage to the property and protects them against certain liabilities.

CANCELLATION
Termination of a policy before it is due to expire. There may be a cancellation clause in a policy setting out the conditions under which the policy may be cancelled by notice.

CANNABIS FACTORY
The illegal cultivation of cannabis plants in disused industrial / warehouse buildings, or very commonly, in rented residential properties often in respectable neighbourhoods. Typically linked to organised crime gangs, these ‘factories’ cause enormous damage to buildings.

CONTENTS
Household goods, clothing and personal property, all of which belong to you or for which you are legally responsible.

CERTIFICATE
A document issued by an insurer as evidence that insurance is in force. Certain certificates (e.g. motor, employer’s liability) are required by law.

CLAIMS
Injury or loss to the insured arising so as to cause liability to the insurer under a policy it has issued.

CLAIMS HISTORY
Claims history is the record of an Insured’s use of Insurance. When you experience a loss and make a claim, the details of that claim become part of your claims history. The subject of the claim, what caused the claim, the amount paid by Insurers and other such details all make up the claims history, that would need to be declared to Insurers.

COMMERCIAL COMBINED INSURANCE
A number of different commercial insurances put together as a single package.

COMMERCIAL INSURANCE
Insurance for business firms, governmental units or non-profit organisations to protect against losses through unforeseen circumstances in return for the payment of a premium.

COMMON LAW
The common law consists of the ancient customs and usages of the land, which have been recognised by the courts and given the force of law. It is in itself a complex system of law, both civil and criminal, although it is greatly modified and extended by statute law and equity. It is unwritten, and has come down in the recorded judgements of judges who for hundreds of years have interpreted it.

CONCEALMENT
Deliberate suppression by you for insurance of a material fact relating to the risk, usually making the contract null and void.

CONSEQUENTIAL LOSS
Insurance of loss following direct damage e.g. loss of profits; loss of use insurance.

COVER NOTE
A temporary insurance document provided by the insurer or broker to the insured, confirming details of the cover that is in place before the actual policy documents are provided. In the case of Motor Insurance it also acts as a temporary Certificate.

DECLARED VALUE (DV)
On most Property Owners’ policies or other policies which include commercial property, this is the amount which you confirm to the insurer, at inception and at annual renewal, as being sufficient to rebuild the property should the worst insured peril occur. It is typically uplifted by a percentage factor to arrive at the Sum Insured to protect against build cost inflation during the claim. See also REBUILD COST

DEDUCTIBLE
The specified amount a loss must exceed before a claim is payable. Only the amount which is in excess of the deductible is recoverable.

DEPRECIATION
If you file an insurance claim, you may receive less from the insurance company that you were expecting due to depreciation – a deduction for wear and tear of your possessions.

DIRECTORS AND OFFICERS LIABILITY INSURANCE
Directors’ and Officers’ liability insurance – also known as D&O insurance – covers the cost of compensation claims made against the directors and key managers (officers) of a business including unpaid Directors of management company for alleged wrongful acts, including:

breach of trust
breach of duty
neglect
error
misleading statements
wrongful trading

This insurance helps protect Directors’ and Officers’ personal assets if someone sues them claiming wrongful acts carried out in their capacity as Directors or Officers.

DUAL INSURANCE
A situation where you have two or more active policies that are covering the same insured risks. Can be an issue with many insurance policies.

DUTY OF FAIR PRESENTATION
A legal obligation under the Insurance Act 2015 on insureds to

A) disclose every material circumstance that they know or ought to know (or, failing that, provide the insurer with sufficient information to put a prudent insurer on notice that it needs to make further enquiries for the purposes of revealing those material circumstances); and

B) present the disclosure in a manner which would be ‘reasonably clear and accessible to a prudent insurer’; and

C) not misrepresent the position (i.e., every material representation as to a matter of fact should be substantially correct and every material representation as to a matter of expectation or belief should be made in good faith)

EMPLOYERS’ LIABILITY INSURANCE
This Insurance is used to covers the costs of employee claims for illness or injury caused by their work due to negligence of the Employer.

EMPLOYERS’ REFERENCE NUMBER (ERN)
The Employer reference number (ERN), is a unique combination of letters and numbers that HMRC uses to identify your business when calculating tax for your employees.

From the 1st April 2012 it became mandatory for Insurers for new and renewal policies to capture the ERN’s for your business and all subsidiary companies.

The Employers Liability Database (ELD) ability to provide enquirers with successful trace results is supported by establishing a unique identifier for employers.

ENDORSEMENT
A policy wording that extends or restricts the cover provided, or that requires compliance with stated conditions. Appears on a Policy Schedule.

ERN EXEMPTIONS
There are very few ERN exemptions. A minority of employers do not have an ERN, including those that:
Pay all employees below the Lower Earnings Limit, none of the employees has another job, and none of the employees is in receipt of a state or occupational pension or other employee benefits, or; Are registered in the Isle of Man, or the Channel Islands (these have no tax presence in the UK)

ERN FORMAT
ERNs will normally begin with three numbers (representing the tax office whose catchment area the employer falls into), followed by a forward slash and then a combination of letters and numbers. e.g 123/AB12345.

ESCAPE OF WATER
This is damage that has occurred from water escaping the mains’ supply. A few different causes of water escape can be from burst pipes or various sources like washing machines, sinks, toilets, radiators, showers, and baths.

EVENT INSURANCE
Cover for one-off events, such as fete, sport days, wedding and concerts.

EXCESS
The first portion of a loss or claim which is paid by the insured. An excess can be either voluntary to obtain premium benefit or imposed for underwriting reasons.

EXCLUSION
A provision in a policy that excludes the insurer’s liability in certain circumstances or for specified types of loss.

EXPIRY DATE
The expiry date is the date the insurance coverage ends.

EX-GRATIA PAYMENT
A payment made by an insurer to you where there is no legal liability to pay.

FINANCIAL OMBUDSMAN SERVICE (FOS)
The Financial Ombudsman Service is an independent public body set up by Parliament to sort out complaints between financial businesses and their customers in a fair and impartial way. The FOS is able to review complaints from members of the public if the member of the public is not satisfied with the way the company they are unhappy with has dealt with their complaint. The decision of the Ombudsman is binding on the Insurer, although insureds may appeal to the court if they wish. https://www.financial-ombudsman.org.uk/

FINANCIAL CONDUCT AUTHORITY (FCA)
The Financial Conduct Authority is a financial regulatory body in the United Kingdom which operates independently of the UK Government to regulate financial services firms and financial markets in the UK.

FINE ART
Individual items, collections and sets that are of particular value due to their historical age, style, artistic merit or collectability for which you are legally responsible.

FIRST LOSS INSURANCE
Insurance where the sum insured is accepted to be less than the value of the property but the insurer undertakes to pay claims up to the sum insured, without application of average.

FLEA COVER
FLEA stands for ‘fire, lightning, explosion and aircraft impact’. This covers your home from these elements only. FLEAA stands for ‘fire, lightning, explosion, earthquake and aircraft impact’. This is a variation of FLEA insurance.

FLOODING
Flood damage is caused by a rapid build-up or sudden release of a large volume of water outside the insured premises, affecting the insured premises. For example a river or stream bursting its banks, seawater coming over coastal defences, heavy rain leading to surface water flooding. If your property is in an area with a history of flooding, you might find it harder to find an insurance policy. Alternatively, they might be more expensive as a result.

FINANCIAL OMBUDSMAN SERVICE
A bureau established by major insurance companies to oversee the interests of policyholders whose complaints remain unsolved through normal company channels of communication. The service is available to all those holding personal cover with the insurers who have joined the scheme. The decision of the Ombudsman is binding on the insurer, although the insured may appeal to the court if he so wishes.

GOOD STATE OF REPAIR
Items that are in a good condition or well looked after.

GROSS PREMIUM
A term normally applied to the gross premium or total charge to the Insured, before the deduction of Insurance Premium Tax, brokerage commission, fees and discounts.

HAZARD
Hazard is a condition or situation that increases the chance of loss in an insured risk. There are two elements to hazard that an insurer needs to carefully consider:
Physical hazard relates to the physical circumstances of the insured property which can be seen, assessed and rated accordingly.

Moral Hazards are not visible and cannot be assessed. They are concerned with the attitude and conduct of people. They indicate those dangers which relate to the character, integrity and mental attitude of the insured.

HEAVE
This is when the ground beneath your home moves upward, causing potential structural damage to your property.

HIGH NET WORTH INSURANCE
A Household Insurance policy tailored for individuals with high value assets.

HIGH-RISK ITEMS
High Risk Items are particularly exposed to risk of theft as they are more attractive to thieves. These include Jewellery, Watches, Computer Equipment, Mobile Phones, Furs/Antiques/Paintings, Bicycles, Stamps, coins and Medal Collections.

HOME
The property insured under a policy, including any outbuildings and garages.

HOME BUSINESS
Office work which you and your employees carry out in your home. Office work means clerical and administrative work only. It does not include any kind of manual work or the use of any machinery other than office equipment.

HOME EMERGENCY COVER
This is usually an optional cover that can be added to your insurance policy, which provides 24-hour access to tradespeople for emergency repairs due to a failure or damage to main services, pipes, drains or sewers, making the home secure following a break-in, or removal of pests.

INCEPTION DATE
The date from which, under the terms of a policy, an insurer is deemed to be at risk. Or – an insurance policy is deemed to start cover

INCREASE IN COST OF WORKING
Under a business interruption policy some cover is provided for additional expenditure incurred by you solely for the purpose of reducing the shortage in production following an insured event.

INDEMNITY
A principle whereby the insurer seeks to place you in the same position after a loss as you occupied immediately before the loss (as far as possible).

INDEMNITY PERIOD
The length of time the insurance company is obligated to make payments to cover the losses insured under the policy.
Under a business interruption insurance the period during which cover is provided for disruption to the business following the occurrence of an insured peril.

INSURABLE INTEREST
For a contract of insurance to be valid the policyholder must have an interest in the insured item that is recognised at law whereby he benefits from its safety, well being or freedom from liability and would be prejudiced by its damage or the existence of liability. This is called the insurable interest and must exist at the time the policy is taken out and at the time of the loss.

INSURABLE VALUE
The value of the insurable interest which you have in the insured occurrence or event. It is the amount to be paid out by the insurer (assuming full insurance) in the event of total loss or destruction of the item insured.

INSURANCE BROKER/INTERMEDIARY
An insurance intermediary who advises his clients and arranges their insurances. Although he typically acts as the agent of his client, he is normally remunerated by a commission (brokerage) from the insurer. An insurance broker is a full-time specialist with professional skills in handling insurance business.

INVENTORY
A room-by-room list of your home contents. These are useful for policyholders when deciding on a Contents Sum Insured.

INSURANCE PREMIUM TAX
A government tax which is included in the price of your insurance. The standard rate is 12% with a higher rate of 20% for travel insurance.

INSURED
An insurance company or Lloyd’s underwriter who, in return for a consideration (a premium), agrees to make good, in a manner laid down in the policy, any loss or damage suffered by the Insured as a result of some accident or occurrence. Or – you Or – The Entity listed as the Insured on the policy documentation

INSURER
Many packaged policies like home insurance or property owners insurance will include cover which is underwritten by more than one insurer. E.g. Buildings and Contents may be insured by one insurer and Legal Expenses by another. So sometimes the term Insurers, in the plural, is used to describe the companies who underwrite one policy where at first glance the insured may not realise that there is more than one insurer.

LANDSLIP
Sloping ground with a downward movement. Can cause considerable damage to buildings and their contents.

LAPSE
The non-renewal of a policy for any reason.

LATENT DISEASE
An illness which lies dormant for some years before manifesting itself.

LEGAL EXPENSES INSURANCE
Legal expenses insurance covers legal costs which an insured might incur while pursuing or responding to a dispute, for example:

personal injury
contracts for goods or services
property
Employment

Although it is possible to buy standalone legal expenses insurance, most policies are added to home or property insurance as an optional extra.
These policies are bought ‘before the event’ to protect policyholders in case legal action has to be fought or defended in the future.

Policies bought ‘after the event ’ insure the policyholder when they have already decided to take or defend a legal action and provide cover against paying the other side’s costs. These are usually standalone policies.

LIMIT
The insurer’s maximum liability under an insurance policy, which may be expressed ‘per accident’, ‘per event’, ‘per occurrence’, ‘per annum’, etc

LISTED BUILDING
Under the Planning (Listed Buildings and Conservation Areas) Act 1990 the Secretary of State lists buildings and monuments etc. for historical significance or their unique architectural qualities. These buildings of national value are seen as worth protecting and are protected for this reason. Due to the special materials and architectural features of such a property, listed status is an important underwriting factor which must be accurately disclosed to a prospective insurer.

LLOYD’S (OF LONDON)
A Society, incorporated under Act of Parliament of 1871 and known as the Corporation of Lloyd’s, which provides the premises a wide variety of services, administrative staff and other facilities to enable the Lloyds market to carry on insurance business efficiently.

LLOYD’S BROKER
A broker approved by the Council of Lloyd’s and thereby entitled to enter the underwriting room at Lloyd’s and place business direct with underwriters. Lloyd’s brokers must meet the Council of Lloyd’s stringent requirements as to integrity and financial stability. They have to file annually with the Council of Lloyd’s a special accountant’s report concerning their financial position.

LOCKS
A mechanism used to secure windows and doors. The type and number of locks on your property may affect your policy.

LONG TERM AGREEMENT
Is an agreement offered to you by an insurer that provides you with a discounted premium at your next renewal, in return for committing to renew your insurance with that provider for a fixed number of years.

LOSS
Another term for a claim.

LOSS ADJUSTER
Independent qualified loss adjusters are used by Insurers for their experience and expertise necessary to carry out detailed investigations of insured losses. A loss adjuster negotiates a settlement which is within the terms of the policy and equitable to both insured and insurer. Should he himself not be an expert in a particular discipline which is necessary or desirable to pursue his negotiations, he will consult or employ such an expert.

LOSS ASSESSOR
You can choose to appoint a Loss Assessor to represent your interest in making a claim against an insurance company. This makes the most sense with large and /or complex claims where there is greater scope for negotiation and/or if you have little time to devote to a potentially time-consuming claim.

Loss Assessors fees are met by you, since the insurance company is paying a loss adjuster to deal with the claim for them and thus the insurance policy excludes loss assessors’ fees, referring to them as fees for the ‘preparation of a claim’.

LOSS OF RENT COVER
Loss of rent cover protects a property owner’s income in the event that tenants have to move out after an insured event such as a flood or fire. Loss of rent cover can protect loss of income and the additional costs of arranging alternative accommodation for tenants.

MALICIOUS DAMAGE
Malicious damage is when someone intentionally causes damage to your property and/or belongings

MANAGEMENT LIABILITY INSURANCE
Traditionally known as Directors & Officers Insurance, Management Liability Insurance protects company directors, senior managers and officers of charities, boards and committees if a negligence claim is brought against them in court or at an employment tribunal
See also DIRECTORS AND OFFICERS LIABILITY INSURANCE

MATCHING SETS
If part of a matching set or suite is damaged and can’t be repaired, the whole matching set will be replaced. This is not included in all policies but some policies include it to a lesser or greater extent.

E.g. One chair as part of a suite is irreparably damaged, but with full matching sets cover, the whole suite would be replaced under the Contents insurance .

Or 1 of 15 kitchen cupboards is irreparably damaged, but with full matching sets cover, all 15 cupboards would be replaced under the Buildings insurance.

MATERIAL DAMAGE WARRANTY
A warranty in a business interruption insurance policy stipulating that for the interruption insurance to become effective there must be a policy in force in respect of the material damage and a claim paid or admitted thereunder for such damage caused by an insured peril.

MATERIAL FACT
Any fact which would influence the insurer in accepting or declining a risk or in fixing the premium or terms and conditions of the contract is material and must be disclosed by a proposer, or by the insurer to the insured.

MORAL HAZARD
See HAZARD

MTA – MID-TERM ADJUSTMENT
A mid-term adjustment is where you can amend your policy before the expiration of the agreement. For example, if you purchased a bike and would like it covered under your insurance, you can change the policy to fit your needs rather than cancelling and taking out a new one.

NEGLIGENCE
The omission to do something which a reasonable man guided by those considerations which ordinarily regulate the conduct of human affairs would do, or doing something which a prudent and reasonable man would not do’. Gives rise to civil liability.

NET PREMIUMS
Term variously used to mean gross premiums net of reinsurance premiums payable, or commission, brokerage, taxes, or any combination of these.

NEW FOR OLD
Where insurers agree to pay the cost of property lost or destroyed without deduction for depreciation.

NO CLAIMS BONUS (OR DISCOUNT)
A rebate of premium given to you by an insurer where no claims have been made by you. Very common in motor insurance.

NON-STANDARD CONSTRUCTION
Buildings that don’t have standard brick walls and a slate or tile roof are typically considered non-standard construction. This is the case for properties with a thatched roof or buildings with a large flat roof area.

NON-DISCLOSURE
The failure by you or your broker to disclose a material fact or circumstance to the underwriter before acceptance of the risk.

OCCUPIED
Occupied means that someone is permanently living in the property and that the property is furnished to allow for normal living. Most standard property insurance policies will allow the property to be empty (or unoccupied) for up to 30, 45 or 60 days before applying additional terms to the policy.

Typically for insurance purposes, someone popping in or staying the occasional night or weekend does qualify the property as Occupied.

For non-residential premises, OCCUPIED means premises used for their normal use, in line with what insurers have been told about the usage of the premises.

PERIL
A contingency, of fortuitous happening, which may be covered or excluded by a policy of insurance.

PERIOD OF RISK
The period during which the insurer can incur liability under the terms of the policy.

PERIOD OF COVER
The amount of time that you are insured for, as confirmed on your policy schedule and your policy documents.

PERSONAL POSSESSIONS
These are items of belongings like mobiles, jewellery, glasses, cameras, watches, tablets, bags, wallets, and things you use in daily life.

PERSONAL ACCIDENT AND SICKNESS INSURANCE
Insurance for fixed benefits in the event of death or loss of limbs or sight by accident and/or disablement by accident or sickness. Accident and sickness may be insured together or separately.

PHYSICAL HAZARD
See HAZARD

POLICY
A document issued by an insurer detailing the terms and conditions applicable to an insurance contract, and constituting legal evidence of the agreement to insure. Issued together with a Policy Schedule, which shows any variation to the terms and conditions, and a Statement of Fact which reflects the information upon which the insurer has agreed to in entering the contract.

POLICY HOLDER
The person or entity in whose name the policy is issued. (See also Insured).

POLICY SCHEDULE
A document issued by an insurer which forms part of the contract of insurance, and provides information including the period of insurance, the sections of the policy that apply and information relating to any applicable excesses/endorsements.

POLICY SUMMARY (ALSO KNOWN AS INSURANCE PRODUCT INFORMATION DOCUMENT)
A brief document issued by an insurer to provide a summary of the policy provisions and any significant benefits or significant exclusions/limitations that apply.

POLICY WORDING
See POLICY

PREMIUM
This is the amount you pay for your insurance policy monthly or annually.

PRODUCTS LIABILITY INSURANCE
These policies cover your legal liability for bodily injury to persons, or loss of or damage to property caused by defects in goods (including containers) sold, supplied, erected, installed, repaired, treated, manufactured, and/or tested by you.

PROFESSIONAL INDEMNITY INSURANCE
Professional indemnity (PI) insurance is a commercial policy designed to protect business owners, freelancers and the self-employed if clients claim a service is inadequate.
Any organisation which provides a professional service or gives advice could be sued if the recipient is unhappy with their work. A customer might say you were negligent, delivered the wrong training or made a mistake which cost them money.

PUBLIC LIABILITY INSURANCE
This type of insurance covers businesses of all sizes, across a variety of industries. It covers you if a client or member of the public claims they have been injured, or their property damaged, because of your business activities.

This type of insurance is designed to protect business owners against claims that result in legal proceedings. If a claim does become a legal matter, a policy will cover the cost of these expenses, including any compensation you are required to pay.

Public liability claims can arise from several circumstances, but negligence is the main trigger.

PROPOSAL FORM
The document completed by an applicant for insurance coverage that provides the details of the risk to be insured.

QUANTUM
The actual amount the Insurer pays as a settled claim.

QUOTE/QUOTATION
Issued by an insurer or broker to provide details of the premium and terms based on the details disclosed about the risk.

QUOTE SUMMARY
Issued by an insurer or broker to a proposer in response to a request for a quotation, to provide the premium they are prepared to offer, any excesses that apply and assumptions that have been made and details of any significant exclusions/limitations or significant benefits.

REBUILD COST
The Rebuild Cost is used as the Buildings Sum Insured for home insurance, or as the Declared Value on a commercial Buildings policy.

The rebuild cost is the amount it would cost to rebuild a building excluding the cost of land but including the cost of demolition and debris removal, professional fees and VAT where payable. The rebuild cost of the property will not be the same as the market value and should be calculated by a suitably qualified buildings professional.

REINSTATEMENT
The making good or repair of property. Where insured property is damaged, Indemnity can be achieved through reinstatement or the payment of a sum of money. An insurance policy will give either the insured or insurer the option to indemnify through one of these methods.

RENEWAL
The process of continuing an insurance from one period of risk to a succeeding one.

RENEWAL NOTICE/INVITATION
A notice sent by an insurer or broker to a policyholder reminding them that their insurance is due for renewal and including details of the premium for the next period of insurance.

RISK
The peril insured against or an individual exposure.

RISK MANAGEMENT
The identification, measurement and economic control of risks that threaten the assets and earnings of a business, other enterprise or individual.

SCHEDULE
See POLICY SCHEDULE

SETTLEMENT
Downward movement as a result of the soil being compressed by the weight of the buildings within ten years of construction.

SINGLE ITEM LIMIT
A single item limit, also called a single article limit, is the maximum cover available on your contents insurance for any one item that is damaged or stolen, unless it is specified on the policy.

SPECIFIED ITEMS
Items which are specifically named on your policy and normally exceed the value of the policy’s single article limit.

STATEMENT OF FACT
A document that provides information about the policyholder or the risk being insured, and which the insurer uses to assess the risk and determine the premium.

SUBJECT TO SURVEY
Phrase used by an insurer to signify provisional acceptance of an insurance proposal pending inspection by a surveyor whose report may be necessary to determine the final rate and conditions applicable, or to report more generally on the management of risks at the insured premises.

SUBJECTIVITY
A subjectivity or subjectivities is an outstanding issue which must be resolved to an insurance underwriter’s satisfaction before they can confirm that the terms and conditions of their quotation are valid and can be accepted. This will normally be a question about the risk information seen or a request for more information.

SUBROGATION RIGHTS
Subrogation rights is where the insurer has the legal right to recover its loss from a third party.  An example would be when a sub contractor causes a loss when working for a larger client. Your insurance company would pay the claim and then seek recovery of their payment from the third party who caused the loss.

SUBSIDENCE
Downward movement of the ground beneath the buildings other than by settlement.

SUM(S) INSURED
The amounts shown against each section, limit and/or item on your schedule and/or in your policy

TERRITORIAL AND JURISDICTION LIMITS
These terms specify regions of the world where the insurer will provide cover, for example UK and EU

THIRD PARTY
A person claiming against an insured. In insurance terminology the first party is the insurer and the second party is the insured.

THIRD PARTY LIABILITY
Liability of the insured to persons who are not parties to the contract of insurance and are not employees of the insured.

UNDERINSURANCE
Inadequate insurance cover. In the event of a claim, underinsurance may result in not having enough to replace all of your items. Being intentionally or recklessly under-insured can have negative implications for an insurer’s acceptance and/or settlement of a claim. Insureds must be careful to insure for full value, to insure that sums insured remain up-to-date and to avoid underinsurance.

UNDERPINNING
To try and combat subsidence, the foundations of buildings can be strengthened. This is known as underpinning.

UNDERWRITER
A person who works for or on behalf of an insurer to assess the risk being proposed to the insurer and decide the terms upon which to accept business. (See also Lloyd’s underwriter).

UNOCCUPIED
When the premises are not occupied (See OCCUPIED). Note that insurance policies differ in their definitions of Unoccupancy, as well as with their requirements and conditions. You should always check the Policy.

UTMOST GOOD FAITH
Insurance contracts are contracts of utmost good faith, which means that both parties to the contract have a duty to disclose, clearly and accurately, all material facts relating to the proposed insurance. Any breach of this duty by the proposer may entitle the insurer to repudiate liability.

VALUABLES
Precious possessions that are regarded as high-risk, usually of an expensive nature. These can include collections, jewellery, watches, clocks, expensive clothing, medals, and precious metals.

VOLUNTARY EXCESS
To make your premiums cheaper, you often have the option to select a voluntary excess. This is where you opt to pay more of your own money in case of a claim. If there is a set excess by the insurer, then this will be added on top of the voluntary excess.

WARRANTY
A very strict condition in a policy imposed by an insurer. A breach entitles the insurer to deny liability.

WATER DAMAGE
Damage caused by water to your property or your contents. This can sometimes leave policyholders without a home, such as with flooding. Alternatively, it can damage possessions, needing them to be replaced.

WEAR AND TEAR
This is the amount deducted from claims payments to allow for any depreciation in the property insured which is caused by its usage.

WITHOUT PREJUDICE
Term used in discussion and correspondence. Where there is a dispute or negotiations for a settlement and terms are offered ‘without prejudice’ an offer so made or a letter so marked and subsequent correspondence cannot be admitted in evidence without the consent of both parties concerned.
Term also used by an underwriter when paying a claim which he feels may not attach to the policy.
This payment must not be treated as a precedent for future similar claims.