Insurance terminology
Commonly used insurance terms include:
- Party: an individual or company.
- Third party: an individual or company that does not have a direct connection with an insurance policy but may be affected by it.
- Insurer: The company providing the insurance cover in the form of a policy.
- Insured: the beneficiary of any financial recompense or benefit that may be paid out under the terms of the insurance policy. The insured is usually liable to pay the insurance premium at the start of the policy and at renewal – if renewal is applicable.
- Policy: the set of clauses which taken together constitute the insurance cover and includes the duration of cover and the terms and conditions as applied to the project.
- Cover: the items, situations and events that the policy provides insurance for e.g cover against theft and damage.
- Period of insurance: the period of time over which the insurance policy provides cover.
- Premium: the amount payable (usually on an annual basis) for the benefit of insurance cover.
- Excess: the amount of any loss that the insured must pay before receiving any benefits under the insurance policy. If a policy has an excess of £200 and the insured claims £500 for a loss suffered, the insured party must pay the first £200 of the loss and so will ultimately receive £300.
- Indemnity: security against hurt, loss or damage.
- Policy limit: the total amount the insurer has to pay under a policy.
- Primary layer/excess layer: the cover provided by a particular policy when arranged in layers. Once the primary layer is consumed, the next layer is triggered…and so on.
See also:
- Building Users' Insurance Against Latent Defects.
- Collateral warranties.
- Contract works insurance.
- Contractors' all-risk insurance.
- Directors and officers insurance
- Employer's liability insurance.
- Excepted risk.
- Flood insurance.
- Indemnity to principals.
- Integrated project insurance.
- JCT Clause 6.5.1 Insurance.
- Joint names policy.
- Latent defects insurance
- Legal expenses insurance
- Legal indemnity insurance.
- Non-negligent liability insurance.
- Office combined/contents/buildings insurance
- Performance bond
- Professional Indemnity Insurance.
- Public liability insurance.
- Residual value insurance.
- Reverse premium.
- Specified perils.
- Subcontractor default insurance (SDI).
- Terrorism insurance
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