Our service to you

pic-quoteWe take the details needed to get you the best quote as soon as possible. Within the working week and within working hours of 9am to 5.30pm, we aim to get back in touch with you (as long as your phone number is valid) WITHIN
 – a service standard that is 95% accurate…

Read our blog

Our Blog Image Goods in Transit Direct are recognized as market leaders in GIT insurance. We’ve now created our own Goods in Transit blog in order to share our best deals and courier insurance news… > Find out more

Contact us

t – 0121 448 6914

e – info@goodsintransitdirect.co.uk

twitter   google

… more

Insurance Glossary Guide

Please quote this reference number when calling for a quote

Additional premium – a premium payable by the insured as a result of a change in policy cover or declaration adjustment to reflect increased exposure or sums insured.
Adjuster – a person who investigates claims on behalf of insurers (see loss adjuster).
Agent – one who introduces a business to an insurer for commission, but can continue to act as an intermediary between the insurers and the insured.
Aggregate limit of indemnity – the maximum amount an insurer will pay under a policy in respect of all accumulated claims arising within a specified period of insurance.
Arbitration – settlement of a dispute by an independent person, whose decision is to be accepted by both parties. It is an alternative to legal action.
Assurance – a term interchangeable with insurance but generally used in connection with life cover as assurance implies the certainty of an event and insurance the probability.

Broker – an intermediary who acts as an agent for insurers and on behalf of the insured, and who is regulated by a professional body and codes of practice.

Cancellation – termination of a policy before it is due to expire.
Certificate of employers’ liability insurance – document proving that you have a valid policy which must be displayed where employees can read it easily and kept for at least 40 years.
Certificate of motor insurance – document proving that compulsory third party insurance is in place in respect of use of the vehicle covered by the policy.
Claim – injury or loss to a claimant against the insured arising so as to cause liability under an arrangement policy.
Common law – ancient customs and precedents that have been recognised by the courts and given the force of law. It is in itself a complex system of both civil and criminal precedents, although it is greatly modified and extended by statute law and equity. It is unwritten and has come down over the centuries in the recorded judgments of courts.
Concealment – deliberate suppression by a proposer for insurance of a material fact relating to the risk, usually making the contract null and void.
Conditions – stipulations written in a policy, with which a policyholder must comply. Failure to do so may result in insurers refusing to pay a claim.
Contribution – when more than one policy covers the same risk, each insurer contributes by paying its rateable proportion of any loss.
Cover note – a document issued by the insurer or agent confirming details of the insurance cover placed. In motor insurance, a cover note acts as a temporary certificate of insurance and policy. See certificate of motor insurance.

Days of grace – number of days for which insurance cover continues beyond the actual expiry date of a renewable policy. If the renewal premium is not paid within this period, the policy lapses.
Declaration – a signed statement by the insured, usually at the foot of a proposal or claim form, certifying that the information given is accurate.
Declaration adjustment – sometimes the premium is calculated based on estimates of wageroll or turnover provided by the insured. In this case, the insured is required to maintain records to enable a declaration of actual wageroll or turnover to be made. The insurer may then adjust the premium for that period by making an additional or return premium.
Deductible – the specified amount which the insured will contribute to any claim, also called excess or Insured’s Contribution. As the insurer is dealing with the claim on the insured’s behalf, they may require payment of the deductible prior to settlement with the claimant.
Deferred premium – the part of a premium which, following agreement with the insurer, is payable by monthly, quarterly or half-yearly instalments.
Directors’ and officers’ liability insurance – insurance that indemnifies against any claims for compensation and legal fees for any actions on the part of the company directors or officers which is outside of their duties, responsibilities or powers.
Duty of disclosure – obligation placed on someone taking out insurance, to inform insurers of anything that could influence either their judgment on whether the risk is acceptable, or the terms to be offered.

Employers’ liability insurance – insurance for employers in respect of their liability to employees for injury or disease arising out of and in the course of their employment. With some exemptions this insurance is compulsory in England, Scotland, Wales and Northern Ireland and can only be provided by an authorised insurer.
Endorsement – an amendment or alteration to a policy, which becomes an integral part of that policy.
Ex gratia – payment made “as a favour” by an insurer, when there is no obligation under the policy terms.
Excess (or deductible) – specified initial amount of a claim that the insured has to contribute. If a claim is less than the excess stated in the policy, no payment is made by the insurers. Excesses do not apply to Employers’ Liability Compulsory Insurance, as the insurer is responsible for any payments due to the employee.
Exclusion (or exception) – an event or circumstances specifically excluded from the terms of a policy.
Extension – an addition to an existing policy to provide cover not previously considered or included, either temporarily or permanently.

Gross premium – a term normally applied to gross written premiums before deduction of brokerage fees or commission and expenses.

Inception date – the date from which, under the terms of a policy, an insurer is deemed to be at risk.
Indemnity – insurance principle by which a policyholder is placed in the same financial position after a loss, as they were immediately before it.
Insurable interest – the principle that the insured must have an interest, usually financial, in the risk for which the policy is to be issued.
Insurance broker/agent – an insurance intermediary who advises their clients and arranges their insurances. Although they act as an agent for their client, they will normally be remunerated by a commission (brokerage) from the insurer. An insurance broker is a full-time specialist in handling insurance business who belongs to a professional body and complies with their code of practice.
Insurance Ombudsman – official body, financed by participating insurers, to whom unresolved complaints can be referred.
Insurance premium tax – the Finance Act 1994 introduced this new tax on most general insurance risks located in the UK. All amounts stated on documentation should make clear the amount of tax payable. Insurance premium tax is currently 5%.
Insured – the person, firm or company insured under the policy.
Insurer – an insurance company or Lloyd’s underwriter who, in return for a premium, agrees to provide indemnity in the event of a specified loss suffered by the person paying the premium as a result of some accident or occurrence.

Lapse – the non-renewal of a policy for any reason.
Latent (gradually developing) disease – an illness that lies dormant for some years before manifesting itself.
Liability – legal responsibility for injury to other persons or damage to their property.
Limit of indemnity – maximum sum an insurer can be expected to pay under a policy or section of a policy. May be expressed as “per accident”, “per event”, “per occurrence”, “per annum”, etc.
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 for a wide variety of services, administrative staff and other facilities to enable the Lloyds market to carry on insurance business efficiently.
Loss adjuster – an independent professional claims expert, who is engaged by insurers to impartially check and arrange settlement of claims in accordance with policy terms.
Loss assessor – person specialising in compiling and negotiating settlement of claims on behalf of the insured, by whom they are paid.
Loss – another term for a claim.

Material fact – any fact that could influence an underwriter in their acceptance of the risk, or calculating the premium.

Name – an underwriting member of Lloyd’s.
Negligence – a form of tort or breach of a legal duty of care where the victim is entitled to some form of compensation, e.g. damages for harm suffered.
Net premiums – a term variously used to mean gross premiums net of expenses, commission taxes, or any combination of these.
Non-disclosure – the failure by the insured or their agent to disclose a material fact or circumstance to the insurer before acceptance or renewal of the risk.

Period of risk/insurance – the period during which the insurer can incur liability under the terms of the policy.
Policyholder – the person in whose name the policy is issued. See also insured.
Policy – a document detailing the terms and conditions applicable to an insurance contract and constituting legal evidence of the agreement to insure. It is issued by an insurer or their representatives for the first period of risk. On renewal a new policy may not be issued although the same conditions would apply, and the current wording would be evidence by the renewal receipt.
Premium – the consideration paid for a contract of insurance, often paid monthly, quarterly or annually.
Premium tax – see Insurance premium tax.
Product liability insurance – insurance that covers against any claims for compensation for injury or damage caused by your products.
Professional indemnity insurance – insurance that indemnifies a professional against their legal liability towards third parties for loss arising from their professional negligence or that of their employees.
Proposal form – document completed by a prospective insured, giving details required by insurers to enable them to decide whether to accept the risk and on what premium terms and conditions. Once agreed by both parties, it forms the basis of the insurance contract.
Pro-rata premium – charge for a number of days a risk is covered, calculated as a precise fraction of the annual premium.
Public liability insurance – insurance that indemnifies against any claims for injury or damage by members of the public to their property by you or your business.

Quote – a statement by an insurer of the premium terms and conditions they will require for a particular insurance.

Renewal – continuation of a policy for a further term, on payment of a fresh premium.
Return premium – a premium payable back to the insured as a result of a change in policy cover or declaration adjustment to reflect reduced exposure or sums insured.
Risk management – the identification, measurement and economic control of risks that threaten the assets of a business or other enterprise.
Risk – in insurance, this is the probability of an insured loss occurring.

Schedule – policy section setting out the main details of the insured, their business activities, the period of cover the application of any special terms or restrictions, together with other details specific to the particular insurance and premium.
Statute law – otherwise known as Acts of Parliament, which may create entirely new law, over-rule, modify, or extend existing principles of common law or repeal or modify existing statute law.
Subject to survey – phrase used by an insurer to signify provisional acceptance of a risk pending inspection by a surveyor whose report is then part of the assessment of that risk. The insurer reserves the right to vary or withdraw any offer as a result of the survey. The insurer may also impose specific requirements or make recommendations for risk improvement.
Subrogation – insurer’s right to pursue action in the insured’s name against the party considered legally liable for the loss or damage.

Third party liability – liability of the insured to a person or persons who are not directly involved in the insurance contract.
Third party – person who is injured or whose property is damaged by the policyholder (the first party). The second party is the insurer.

Underwriter – a person who accepts business on behalf of an insurer.
Utmost good faith – duty placed on both parties to an insurance contract. The insured has to disclose material facts while insurers have to act reasonably and communicate clearly.

Warranty – a condition which goes with a policy and must be strictly complied with for a claim to be paid under the policy for example, use of a hot work permit.