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Accident

Any Unforeseen and unexpected event is considered an accident

Arial devices

Arial devices means satellites, aircrafts, balloons etc

Agent

An insurance company representative licensed by the state who solicits, negotiates or effects contracts of insurance, and provides service to the policyholder for the insurer.

Abandonment

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.

Absolute Acceptance

An absolute and unqualified assent to all the terms of an offer to form a contract.

Absolute Liability

Liability for damages even though fault or negligence cannot be proven.

Absolute Ownership

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.

Accident Insurance

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.

Accidental Death Benefit

A benefit in addition to the face amount of a life insurance policy, payable if the insured dies as the result of an accident. Sometimes referred to as "double indemnity."

Accidents Claim Journal

A Monthly journal published from Delhi reporting judgements(Indian as well as foreign) related to accidents and insurance claims, employees, state insurance claims, cases of negligence and compensation, claims against common carriers, motor and rail accidents claims ,workmen's compensation claim, arbitration cases arising out of insurance, criminal trial arising out of accidents etc.

Accompanied baggage

Baggage being taken by someone with his own person whilst travelling.

Accumulation

Percentage addition to policy benefits as a reward to the insured for continuous renewal.

Acquisition Costs

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.

Additional cover

An insurance policy extended to cover additional risk perils such as strikes. Riots and Civil commotion etc. on payment of extra premium.

Adjuster

A person who investigates and settles losses for an insurance buyer.

Adjusting

The process of settling losses with or by an insurance buyer.

Affidavit

A statement or declaration required when a claim is filed. In general, it contains the facts on which the claim is based.

Affreightment

A contract for the carriage of goods by sea for payment expressed in bill of lading.

Aggaravation of risk

To make the existing risk worse, more troublesome, etc.

Aggregate Deductible

Deductible in insurance contracts in which all covered losses during a year are added together and the insurer pays only when the aggregate deductible amount is exceeded.

Aggregate deductible- Marine

A maximum limit to the deductible amount for partial loss claims under a full fleet policy, irrespective of the number of vessels involved.

Aggregate Indemnity

The maximum amount that may be collected for any disability or period of disability under the policy.

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.

Agricultural pumpsets insurance

The policy applies to centrifugal pumpsets (electrical and diesel), deepwell pump, portable pump, turbine pumps as well as submersible pumpsets used for agricultural purposes and the scope of cover is against fire, lightning, burglary, theft, mechanical or electrical breakdown.

Airway bill

Airfreight consignment note.

Alien Insurer

An insurance company domiciled in another country.

All risk insurance

Insurance against loss of or damage to properly arising from any peril except those that are specifically excluded.

Allocated benefit

A provision under which certain expenses usually miscellaneous hospital and medical charges such as X-ray, dressings, drugs etc. will be paid at a rate for each as scheduled in the provision, Usually, there is also a maximum total that will be paid for all such expenses.

Ambulatory Care

Medical services that are provided on an outpatient (nonhospitalized) basis. Services may included diagnosis, treatment, and rehabilitation.

Arbitration

A form of alternative dispute resolution where an unbiased person or panel gives an opinion about quantum of loss.

Arranged total loss (Marine,Hull)

An agreement between a hull underwriter and the assured ship owner, whereby the underwriter is prepared to pay a compromised settlement on a total loss basis because although the estimated cost of repairs does not justify a constructive total loss, repairing the ship would be an uneconomical proposition in view of its market value and the high cost of repairing the damage. The settlement, usually allows the assured to retain the wreck. Refer:"Compromised total loss".

Arson

The wilful and malicious burning of, property, often with criminal intent.

Assessor

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.

Assets

All funds, property, goods, securities, rights of action, or resources of any kind owned by an individual or institution.

Association Captive

It is a type of captive insurer owned by members of a sponsoring organization or group, such as a trade association.

Assured

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,.

Automatic Reinsurance

An agreement that the insurer must cede and the reinsurer must accept all risks within certain explicitly defined limits. This is also called as treaty arrangement.

Automatic sprinkler

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.

Automobile fleet

A group of automobiles under the same ownership and management.

Average adjuster

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.

Aviation Insurance

Aircraft insurance including coverage of aircraft or their contents, the owner's liability, and accident insurance on the passengers.

Avoidance

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.

Award

The decision in arbitration.

Business Insurance

A policy which primarily provides coverage of benefits to a business as contrasted to an individual. It is issued to indemnify a business for the loss of services of a key employee or a partner who becomes disabled.

Bailee

One who has custody of the property of another. Bailees "for hire" have certain responsibilities to care for the property of others that is in their custody.

Barratry

It is the wrongful act committed willfully by the master and/or crew against the ship owner.

Beaching

Voluntary stranding of a vessel.

Berth

Area allocated at quayside to a particular shipping service or company for berthing or a point to which a chartered ship is ordered to load or discharge or operating a service.

Bill of Exchange

It is the bill drawn by exporter against the importer.

Bill of Lading

Receipt for goods shipped on board a ship signed by the person who contracts to carry them, and stating the terms on which the goods are carried.

Binding Receipt

A receipt given for a premium payment accompanying the application for insurance. If the policy is approved, this binds the company to make the policy effective from the date of the receipt.

Blanket Contract

A contract of health insurance affording benefits, such as accidental death and dismemberment, for all of a class of persons not individually identified. It is used for such groups as athletic teams, campers, travel policy for employees, etc.

Bonded goods

Goods on which duty has not been paid ,are held in a bond by the customs in a bonded warehouse. Bonded value means the value of the goods whilst in bond and may be used in place of gross value where bonded goods are damaged and are the subject of a claim.

Bordereau

An itemized statement of transcations, commonly used in reinsurance.

Breach of condition

When a condition of the insurance contract is broken by the assured, the insurer may avoid the contract from the inception.

Broker

A marketing specialist who represents buyers for insurance and who deals with either companies in arranging for the coverage required by the customer.

Bulk Cargo

Cargo, usually a homogenous material shipped in bulk i.e, complete shipments.

Bulk Carrier

Purpose built vessel specialising in the shipment of bulk cargoes i.e, iron,ore,grain.

Burglary

It is a theft committed by breaking into or out of the premises. Evidence of breaking 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.

Cancelable

A contract of health insurance that may be cancelled during the policy term by the insurer or insured.

Coverage

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.

C.A.D.

Cash against documents.

C.K.D.

completely knocked down consignments, which are assembled at destination as being distinct from being transported as complete unit.

C.O.D.

Cash on Delivery

Calendar-year Deductible

Amount to be payable by a member during a calendar year before a group or individual health insurance policy begins to pay for medical expenses.

Claims Adjustor

Person who assesses and settles the Claims: Person can be company adjustor, independent adjustor,.

Cancellation

The discontinuing of an insurance policy before its normal expiry date, either by the insured of the Insurance company.

Capacity

The amount of capital with an insurance company as a whole for underwriting general insurance coverage.

Capital sum insured

It is the sum insured for which cover is required under a Personal Accident Policy.

Capitation

A method of payment in which a Doctor or hospital is paid a fixed, per person amount for each patient served regardless of the actual number of services provided to each person.

Captive Insurance Company

A company owned by one or more non-insurance Industry for the main purpose of providing insurance covers to the owner or owners.

Captive Insurer

Insurance company established and owned by a parent firm in order to insure its physical risks while reducing premium costs, and perhaps easing tax burdens.

Cargo insurance

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 boat.

Cargo Manifest

Inventory of cargo shipped.

Cargo Plan

Plan depicting space in a ship occupied by cargo.

Catastrophe

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.

Cede

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.

Cession

Amount of the insurance ceded to a reinsurer by risk underwriting Co. in a reinsurance operation.

Charter Party

A contract whereby a ship owner agrees to place the ship or part of it at the disposal of a merchant or other person for the carriage of goods from one place to another. On being paid freight or to let his ship for a specified period.

Charterer

Person who hires a vessel either on voyage or time basis.

CIF--cost, insurance and freight

This refers to a common term in a sales contract that may be encountered in international trading when ocean marine travel is used. CIF means cost, insurance and freight. In this type of contract it is the sellers responsibility to arrange insurance before insurance premium is added in the invoice. In this type of contract, the selling price includes the cost of the goods, all shipping charges and the cost of marine insurance. Although the seller is obligated to purchase marine insurance, the seller's responsibility for the goods ends when the goods have been delivered to the marine carrier or have been delivered on board the shipping vessel depending upon the terms of the contract.

Claim

The formal request by a policyholder or a claimant for payment of loss under an insurance policy.

Claim Settling agents

Policy issuing offices generally appoint their claim settling agents abroad for settlement of claims arising out of policy issued in the home country. Overseas mediclaim, marine insurance policies are serviced by them

Class Rating

Rate-making method in which similar insureds are placed in the same underwriting class and each is charged the same rate. Also called manual rating.

Claused bill of Lading

Bill of Lading, which has been endorsed by the ship owner, as the goods described thereon do not conform to what is offered for shipment e.g., package missing, inadequately packed.

Clean Bill of Lading

A bill of Lading, which has no superimposed clause expressly declaring a defective condition of the packaging or of goods.

Coinsurance

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 bears to the amount required;

Collateral Source Rule

Under this rule, the defendant cannot introduce any evidence that show the injured party has received compensation from other collateral sources.

Combined Ratio

The sum of the ratio of losses incurred to premiums earned and the ratio of commissions and expenses incurred to premiums written. A ratio above 100 mean that for every rupee premium taken in, more than a rupee went for losses, expenses, and commission.

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.

Cover Note

Is the document that is issued provisionally pending issuance of insurance Policy?

Cumulative Bonus

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

Depreciation

A decrease in the value of property over a period of time due to wear and tear or obsolescence. Depreciation is used to determine the actual cash value of property at time of loss.

Deductible

An amount which a policyholder agrees to bear, per claim or per accident, toward the total amount of an insured loss.

Direct Loss

Financial loss that results directly from an insured risk covered.

Direct Writer

The industry term for a company, which uses its own sales employees to write its policies. Sometimes refers to Companies, which contract with exclusive agents.

Directors' and Officers' Liability

The exposure of corporate managers to claims from shareholders, government agencies, and employees, and others alleging mismanagement.

Disability

A physical impairment that substantially limits major life activities of an individual. It may be partial or total.

Disability Income Insurance

A form of health insurance that provides periodic payments to replace income when an insured person is unable to work as a result of illness, injury, or disease.

Disappearing Deductible

Deductible in an insurance contract that provides for a decreasing deductible amount as the size of the loss increases, so that small claims are not paid but large losses are paid in full.

Dismemberment

Loss of body members (limbs), or use thereof.

Dismemberment Insurance

A form of health insurance that provides payment in case of loss by bodily injury of one or more body members (such as hands or feet) or the sight of one or both eyes.

Domiciliary Hospitalization

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

Embezzlement

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.

Exclusions

Specific conditions or circumstances for which the policy will not provide benefits.

Earned Premium

The part of the total insurance policy premium which applies to the portion of the policy period which has already expired.

Economic Loss

The estimated total cost, both insured and uninsured, of accidents (such as motor vehicle accidents, and fires); includes such factors as property damage, funeral expenses, wage loss, insurance administration costs, and medical, hospital and legal costs.

Effective Date

The date on which the insurance under a policy begins.

Elimination Period

A period of time between the period of disability and the start of disability income insurance benefits, during which no benefits are payable. (See Waiting Period.)

Endorsement

An amendment of the policy usually by means of issuance of an additional document.

Facultative reinsurance

A type of reinsurance in which the reinsurer can accept or reject any risk presented by an insurance company seeking reinsurance.

Fiduciary

A person who holds something in trust for another.

F.O.R. Free on Rail

This is the same as F.O.B. contract.

Facility

A pooling mechanism for insureds' not able to obtain insurance in the voluntary market. Insurers write and issue policies but cede premium and losses on those policies to a central pool in which all insurers share.

Facility of Payment

A contractual provision that allows the insurer, under stated conditions, to pay insurance benefits of up to a specified limit to a person or persons other than the insured, the designated beneficiary, or the insured's estate.

Factory Mutual

Mutual insurance company insuring only properties that meet high underwriting standards. Emphasizes is on loss prevention.

Fire

A combustion accompanied by a flame or glow, which escapes its normal limits to cause damage.

First Part Coverage

An insurance coverage under which the policyholder collects compensation for losses from the insured's own insurer rather that from the insurer of the person who caused the accident.

First party claim

A demand made by a policyholder reporting an insured event directly to his company.

Flat Schedule

A type of schedule in group insurance under which everyone is insured for the same benefits regardless of salary, position, or other circumstances.

Guaranteed Insurance Sum (GIS)

A lump sum purchase price is given to purchase future pensions under the Jeevan Akshay Plan of Life Insurance Corporation of India. This amount is referred to as GIS. The monthly pension that is payable one month after payment of first premium is calculated on the basis of the age at entry.

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

General Average

In sea marine insurance, a loss incurred for the common cause that is shared by all parties to the venture.

General Damages

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 NationalisationAct, 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. B) 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.

Generally Accepted Accounting Principles (GAAP)

Principles of accounting and reporting business results developed by the American Institute of Public Accountants.

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.

Graded commission Scale

A commission scale providing for payment of high first-year commission and lower renewal commissions.

Gross Negligence

The intentional failure to perform a manifest duty is reckless disregard of the consequences as affecting the life or property of another.

Gross Premium

The premium paid by the policyholder.

Gross Rate

The sum of the pure premium and a loading element.

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