Aggregate is a policy in which the level of cover you choose applies to the sum of all accumulated claims you make during one policy period. For example, if you choose an aggregate insurance policy that had £1m level cover, then £1m is the maximum amount your insurer would pay for all of the accumulated claims in one policy period.
Legal Costs of a claim are included in the level of cover and are counted as part of the sum.
It is the opposite of any one claim cover.
Any one claim
Sometimes any one claim can be called ‘each and every claim’.
Any one claim cover is a policy in which the level of cover you choose applies to each claim you make during one policy period. Legal costs of a claim are paid in addition to any damages and to the same level of cover.
It is the opposite of aggregate cover.
Applicable courts can also be known as jurisdiction. To enable the policy to protect you, a claim against you must be brought in the courts of / or be subject to the laws of a specific country or region. This is normally the EU, worldwide excluding USA and Canada or just worldwide.
Whichever applies to you will be noted on your policy schedule.
A broker is either a person or a company that will arrange customers’ insurance direct with an insurer.
A broker compares the best insurance products to provide to a customer, depending upon their needs; this is normally known as a comparison service.
Business Contents insurance cover protects your belongings that you have in and about your business premises. Business Contents insurance cover is an important factor to consider for all business insurance types.
If your business premises were damaged then the contents may well be damaged too. You would have to replace stock, equipment and business contents. Tailored cover can provide financial support, and peace of mind should this happen to you.
Business Interruption Insurance
Business Interruption Insurance will normally cover the loss of income for a specific period of time, for instance when a business is unable to operate due to an unplanned disaster such as fire or flooding.
If you have to cancel your insurance then within your business insurance policy there will be a clause setting out the conditions under which the policy may be cancelled by notice. A period of cancellation notice can be from 48 hours to 3 months. In most cases this will result in a return premium being paid by the insurer to the insured.
Cancellation therefore is termination of a policy before it is due to expire at the end of the full insurance policy term.
Commercial Business Insurance
Commercial Business Insurance is an insurance policy that a company or organisation will take out to cover their business activities, property and/or professional transactions.
Commission is the monies that is paid to a 3rd party. It is usually a broker, by which an insurer has matched a customer with the correct insurance providers.
Compulsory Excess is an amount of monies that is set by the insurers and is the amount of excess that is to be paid by the customer in the event of a claim.
Compulsory insurance is that which is required by law, for example Employers Liability.
Cooling off Period
A cooling off period is the amount of time that a customer has the right to cancel an insurance policy, usually without any charges being made to them.
An insurer can refuse to provide insurance or offer terms if a client does not meet certain standards or criteria. This is then known as a declined risk.
Most insurance policies have an excess attached to the policy. An excess will be the first portion of a loss or claim which the insured party pays. An excess can be a voluntary amount to reduce a premium cost/benefit or an excess can be imposed for underwriting purposes.
An ex-gratia payment is made by an insurance company that is outside the terms of the insurance policy.
Height depth and heat
Working with height depth and heat as a professional tradesman or a specialist in a particular trade, you may need to amend your policy to be more work specific to your business requirements.
For example working up to 50 meters in height, having over 75% of your work use heat, or working deeper than the standard 2-3 meters may need specialist cover.
You will need to let your insurance provider know and your policy can then be amended so that you are covered at all times.
As the value of money falls, the cost of living will rise and inflation is a % change in the cost of living over a period of time.
Insolvency means to have no access to any financial funds and therefore have no means to pay back any debts. It is essentially the inability of a debtor to pay their debt.
Insolvent relates to a person or a business that is declared as bankrupt and are therefore unable to pay their debts.
An insurance company is a business that creates an insurance product to take on the risks of another company in return for payment of premiums. The company may be mutually owned by a group of policy holders or owned by share holders.
An insurance company can also be known as an insurer or provider.
Key Facts (or Summary of Cover)
What is it? This document is provided by your insurer and summarises all available cover. This document should be used in conjunction with your policy schedule.
Why do I need to read it? You may have not selected all the avaliable covers, therefore you may find it useful to consider further sections to your current policy.
A Lapse policy is an insurance policy that has not been renewed. Non-renewal can be for any reason.
Legal Costs Insurance cover will protect you should there be costs incurred in issuing proceedings should a claim be made against you and you need to pursue or defend your claim.
For example if a tenant or guarantor fails in their obligations set out in the tenancy agreement, it will cover you for costs incurred in legal proceedings against unpaid rent, removal of squatters and a tenant including eviction.
Lloyds of London
Lloyds of London, more generally known simply as Lloyd’s, is the UK’s largest insurance and re-insurance market located in London’s primary financial district.
Loss is another term used for the word claim.
A loss is the injury or damage that has been caused to an insured property or person as a result of an accident or misfortune, and is the amount paid out in such instances under the insurance contract.
Loss adjusters are independently employed by insurance companies for their expertise in carrying out detailed investigations into large insurance claims. Loss adjusters will investigate the losses and usually the adjusters’ fees are paid for by the insurers as they are an impartial person.
A loss adjuster will make a decision on an amount to be paid in settlement solely on a basis of market practice guidelines. Settlement of a claim are on the terms of the policy which is fair to both the insurer and the insured persons.
A loss assessor is an independent person who looks at and evaluates/negotiates claims on behalf of a policy holder, often employed in the event of a substantial or complex claim. Their fees are paid by the policy holder.
The market value of a property is the value of the said property whether commercial or residential. A surveyor will value the property and this price would be the expected price you would get if your property was placed on the market.
It is essentially the highest estimated price that a buyer would pay and a seller would accept for an item in a competitive market.
It is important to keep insurers up to date about facts or circumstances that could affect your policy, even things you may have forgotten to mention at point of sale e.g. previous directorships ending in receivership/liquidation, past or ongoing IVAs (Individual voluntary arrangements), additional policies in place covering the same risk, even an incident which did not result in claim against the policy should be reported to your insurer.
If you are unsure what constitutes as a material fact please contact us on 0161 9682030.
A national broker is an intermediary who will work on a national level, as opposed to regional brokers who will work locally.
A national broker will usually specialise in offering a service in many different sectors of an insurance market, rather than in one particular type of insurance.
A national broker will have clients that are usually corporate bodies.
Negligence is the failure to take proper care in doing something, which can result in damage or injury to you or someone else.
New for Old
New for old is where an insurer agrees to pay the cost of items which have been lost, damaged or destroyed without deduction for depreciation.
No Claims Bonus
No claims bonus or a discount is applied to a premium and is given as a result of no claims being made during the previous year(s) period of insurance. (There are no monies given for this discount applied).
No claims bonus is a common term used with motor insurance and can also be know as no claims discount.
Peril is an event that could happen in the future, such as a problem, emergency or an unexpected happening (including earthquake, fire or theft) which exposes a person or property to the risk of damage, injury or loss.
The peril may or may not be excluded by an insurance policy. A peril can be defined as that which gives rise to a loss.
Period of Risk
A risk period is an agreed period of time that an insurer can incur liability under the terms of an insurance policy.
A policy is the insurance documents detailing the terms and conditions relevant to the insurance contract and representing the legal evidence of the agreement of insurance.
A policy is issued by an insurer or a representative of the insurer once the insurance has been agreed with the policy holder.
A policy holder is the name of the person or business that is insured and that the policy is issued to.
>What is it? This document specifically relates to you and your business. It contains information about what cover you have and the levels that you have chosen, including: excesses, conditions and endorsements/exclusions applicable to the policy.
Why do I need to read it? If the levels of cover are incorrect or we are missing cover which you require, your policy will not activate in the event of a claim. It is also important to read through your endorsements/exclusions to check that you can comply with them and to ensure all of your business activites are covered.
>What is it? This document details FULL terms and conditions the insurer has set out.
Why do I need to read it? All of the applicable insurer warranties can be found in this document. A warranty can be described as a promise made by the you to the insurer relating to a fact or the performance of a business. These warranties must be strictly adhered to, therefore you MUST read this document to understand what warranties and promises you have with insurer.
A premium is the cost of the insurance policy.
Products Liability Insurance
Products Liability insurance provides cover in the event that a product you make or supply causes damage or injury to a person or property.
Products liability is required if you have manufactured a product (including food and drink) or are selling a product that has been manufactured by another company if the company cannot be clearly identified. You will also be responsible for any products that you sell, change or repair.
The proposal form is required for gathering the information required to allow an insurer to decide if they want to take on the risk of a person or business and what terms and conditions of the policy they want to apply to the risk.
An insurer will send a proposal form to a person or business requiring insurance to help fully assess a person or a business and the work they do. Questions on this form should be answered as fully as possible and any details which may be pertinent to the future insurance contract should be declared.
See also Statement of Facts.
If you are a proposer you are the individual or a company who is applying for insurance cover.
A quote is a statement that the insurer puts together for the premium they will require for a particular insurance policy. It’s essentially an estimate of what your rate could be with a potential insurance carrier.
A rebuild valuation is given to you via a surveyor and is the figure that it would cost you to rebuild your property, whether commercial or residential, if it was damaged beyond repair or a was deemed a Total Loss. The majority of building insurance policies are based on a rebuild value rather than a property’s sale price or market value.
Reinstatement is the restoration of a policy which has lapsed because of non-payment of premiums after the grace period has expired. It allows a previously terminated policy to resume active coverage.
Renewal is the action of continuing the insurance policy into the next period of risk.
A renewal notice is a letter or notice that is sent to a customer advising them of their renewal date and inviting them to renew their business insurance policy.
Rent Guarantee Insurance cover will protect you as landlord of a property in the event that a tenant or tenants fail to pay their rent. Your Rent Guarantee policy also includes Legal Costs Insurance to assist you in recovering your lost rent payments.
Retroactive date is the date from which your work will be covered, regardless of the inception date of the policy.
Cover is effectively extended backwards to a specified date, before the start date of the policy. This will ensure that you are covered for work carried out in the past.
Run-off cover is where an insurance company pays claims made against a business which has stopped trading and ceased operations but wishes to maintain cover for past work.
Run-off cover usually lasts for six years but other periods of time can be specified if wished.
Statement of Fact
What is it? This document confirms all the details we captured over the phone/email, this is the information we have used to present your risk to insurers and they in turn offer policy cover. This document should be used in conjunction with your policy schedule.
Why do I need to read it? This is the docuement you read to see if all the details we have captured reflect your business and its activities correctly. If the information is incorrect you should inform us, as failure to do so could invalidate your insurance.
Subsidence cover can be added or removed, as required, from your business insurance policy.
Subsidence usually happens when the soil – which is usually clay based – on which a building is built, shrinks or swells causing damage to a property. Subsidence cover should protect you from your property suffering structural damage which is classified as landslip, ground heave and ground movement.
– Subsidence is a downward movement of the ground supporting the building
– Heave is an upward movement of the ground supporting the building
– Landslip is the movement of land down a slope
The sum insured is the amount payable in the event of an insurance claim whilst under a contract of insurance. The amount is the maximum payable.
Terms of Business
What is it? These are provided by us, and will document our business practices amongst other information, it will also state our fees and any applicable cancellation fees.
Why do I need to read it? You should familiarise yourself with these procedures and contact us if you have any queries.
Third Party Liability
Third Party Liability is an insurance policy purchased for protection against the actions of another (a third) party who are not party to the contract of insurance and are not employees of the insured.
It is purchased by the insured (the first party) from an insurance company (the second party) for protection against damage from the actions of another party (a third party).
Tools cover provides comprehensive cover so that you can replace any damaged, lost or stolen items and keep your business running.
The tools of your trade are an expensive investment and they should be insured and protected.
If you are stated as having underinsurance, then the sums that have been insured do not reflect the actual value of the property or item(s) being insured to effectively provide cover. The amount being covered is less than the actual value of the property or item(s).
If a building has underpinning, then its foundations have been strengthened or deepened to manage or reduce the risk of subsidence and any subsequent damage occurring.
An underwriter will write and accept business on behalf of the insurer.
An uninsurable risk is where an insurer declines to take on a policy because there is either a high likelihood of loss, or in which the insurance would be considered against the law.
To void a policy means the policy has never existed. Another term for void is cancelled.
A warranty is a guarantee or condition in an insurance policy which in put in place by the insurer. This will entitle the insurer to deny any liability.
An insurer warranty can be described as a promise made by the policyholder to the insurer relating to facts and/or performance of the business. Any warranties must be strictly complied with.
Wear and Tear
Wear and tear is taken into consideration when a claim payment is made. The depreciation of what’s insured is deducted from the claim amount.
A weather claim is an insurance claim arising from adverse weather conditions such as freezing temperatures, storm or tempest lightning damage.