The cession by the insured to the insurer of the remains of his property, and rights relating to it, when a total loss is claimed i e. any “salvage” remaining belongs to the insurers.
A policy covering the insured against loss resulting from the abandonment of an event as, for example, when a cricket match is cancelled by rain, or the cancellation of a pop concert due to many reasons (e.g. illness of star)
An unlooked-for mishap or an unforeseen event that is neither expected nor designed.
Accidental bodily injury
The phrase commonly used in liability policies in relation to claims for injury to the person as distinct from damage to property.
Words used in relation to an event giving rise to a claim under a policy to indicate that an event must be unexpected so far as the insured is concerned.
Concentration of risk, where an insurer may find that he has many policies on properties or liabilities that could result in losses occurring at one and the same time. For example many buildings in the same location, such as a business park.
A clauses (London)
This is an international set of clauses applicable around the world. Here in Cambodia we use these clauses to offer the widest “All Risks” terms possible.
Act of God
An event that is the result of natural forces, arising without human intervention, which no human foresight could have provided against and of which human prudence was not bound to recognize the possibility. Examples include storm, tempest, earthquake etc.
Actual total loss
There is an actual total loss (a) where the subject matter of insurance is completely destroyed; (b) where it ceases to be a thing of the kind insured; or (c) where the insured is irretrievably deprived of it. For example a very serious car crash.
A very well qualified person concerned with the application of probability and statistical theory to problems of insurance, investment and financial management. Actuaries are always part of the very senior management of an insurance company, especially in life insurance.
A benefit add to a policy beyond its standard cover. Usually found in the “extensions” section of a policy.
Perils added to a fire policy, such as damage by storm, tempest or flood, Riot, strike, civil, commotion ect.
A premium that is variable to correspond with the extent of the subject matter of insurance, for example, according to variations in the number of persons insured or the value of goods covered. A good example is a group personal accident policy where staff are deleted or added as needed incurring additional or refund of premium.
A risk that presents some unfavorable features from the point view of insurance. Examples include - not sufficient fire fighting equipment and/or training or poor removal of waste each day.
Aggregate limited of indemnity
The maximum amount that a liability insurer will pay under a liability policy in respect of all claims arising within a specified period of insurance.
Aircraft or aerial devices
Damage caused to property on the ground by aircraft or aerial devices or articles dropped therefrom (excluding damage by sonic booms) is an additional peril that can be covered by a fire policy.
All risks cover
The widest form of cover possible in insurance. There are always some exclusions such as normal wear and tear, depreciation etc. War risks can be covered if required, on sea or in the air but never on land.
A clause in a policy stating that any differences which may arise between insured and insurer shall be determined by the appointment of an arbitrator or panel of arbitrators. These are usually chosen by insurers in advance in case of a serious dispute. Arbitrators are usually quicker and less expensive than taking an issue to court.
Architects surveyors and consulting engineers fees
An item for such fees that may be incurred in the event of the loss under a property insurance may be included in the Insurance Schedule with a separate sum insured.
The risks that a person concerned with money eg. Carriers to or from a bank or actually in the bank during the time of a hold-up being assaulted in the course of their duties. This is insurable under a money policy.
A person appointed to assess and agree on the settlement of a claim under an insurance policy. In fire insurance the term refers to such a person appointed by the insured, the insurers’ appointee being called an adjuster.
A condition in a non-marine property insurance policy that if the property value is understated, the insured’s claim for a loss is reduced proportionately to the undervaluation.
Like Marine Insurance, aviation risks are divided into the hull itself, cargo, passengers and liability insurance.
One in temporary possession of the property of another. Examples are a watch repairer or car repairer etc.
One who entrusts his property to another. Example, the owner of the watch or car.
An act by the master or crew of a ship committed without the knowledge of the owner and against his interests. Example- theft of the cargo whilst in transit.
Bill of lading
A document used in shipping which contains a description of the goods to be shipped. Insurers would normally need this document, or a copy of it, to check as part of the claims process.
A policy in which a single sum insured covers a number of separate items such as buildings in a fire policy or employees in a fidelity guarantee policy, without being divided up among them or specifically named.
This is a special class of insurance which covers horses. Livestock covers cattle, pigs etc but bloodstock is more popular, as many horses can be worth millions of dollars, especially Race Horses. The cover is like a human’s life Insurance covering death by accident or illness. Bloodstock insurers can also cover more exotic animals, especially on film sets: elephants, tigers, lions, snakes, camels, rhinos, hippos, birds of prey etc. Quite a specialized (and expensive) form of insurance.
Insurance of boilers against damage by explosion or collapse and sudden and specified unforeseen events, such as overheating.
A bond is a guarantee to pay a sum or to perform a contract. Some insurers are willing to do this kind of guarantee in certain circumstances, for example where a contractor gives an understanding to perform the contract as per the terms contained in the contract, insurers can guarantee their performance. Usually the Bond Insurance requirement is for around 10 percent of the total guarantee and the premium rate depends on the country risk where it is requested from.
Engineering insurance covers the breakdown of mechanical and electrical plant defined as actual breaking or burning out of any part of the plant whilst in use from either mechanical or electrical defect causing sudden stoppage and necessitating immediate repair or replacement. The resultant loss of profits can also be insured.
Business interruption insurance
Business interruption insurance is the same as consequential loss insurance. For a detailed description of our policy, check our Fire and Business Interruption policy information.
A clause in policy setting out the conditions under which the policy may be cancelled by notice from either the insurer or the insured.
Capital additions clause
A provision in a fire policy to cover new buildings or machinery added by the insured during the period of insurance. Usually a limit in the sum insured is stated for this extension.
Captive insurance company
An insurance company formed by a trading company, a trade association or the like, primarily for the insurance of the founder’s own risks. Very often these “captives” are arranged in off-shore Tax Havens such as Labuan, Hong kong etc.
Clams made basis
The basis of a policy which confines the liability of an insurer to claims made during the currency of the policy as opposed to a policy wording of an “occurrence” basis i e. possibly from previous years.
Claims surveyors/Claims setting agents
Someone instructed on behalf of on insurer both to assess a loss and lodge claims against the shippers where necessary. Most insurers have an agreed network of these claims surveyors in every main port in the world.
A single policy containing a Wrap-A-Round number of separate insurance classes all in one policy. A good example of this is a Business Comprehensive Policy containing fire and perils cover, business interruption, burglary, money (in safe or in transit), third party liability cover etc. In other words all the basic insurance covers a business may need. Usually Motor is covered separately to this policy.
Consequential loss insurance
Insurance against financial loss, other than material damage, resulting from an insurable peril. Can also be called a business interruption policy.
Insurance against relatively remote possibilities e.g., loss arising through the reappearance of a missing beneficiary in a will. Also policies that cover “hole in one” events in a golf tournament or even having twins (where not medically forecast).
Contractors’ all risks
Insurance in respect of contract works covering damage to property on the site however caused and third party liability. There are always a list of exclusions which make the cover clearer - if its not excluded it is covered.
A basic principle of Insurance. This is a clause providing that the insurer shall not be liable for more than a rateable proportion of a claim if there is more than one policy in force covering the same risk. A good example is a person who insurers his car with 2 different Insurers, has a claim then expects two equal payments so he would make a profit on the claim. This clause stops that!
Cost insurance freight (CIF)
A term of sale for goods in transit whereby the price paid by the buyer includes the insurance premiums and the shipping charges. Very often in Cambodia the buyers will allow the seller from overseas to arrange the insurance from their country. In fact it is usually much better to insure in Cambodia with PPI, as we offer better terms (door to door) and a cheaper premium.
An interim document evidencing the grant of insurance cover. A policy will be issued in due course.
Credit card insurance
Insurance of liability of a credit card holder for the misuse by a third party of his card.
Insurance for farmers against failure or reduced yield of a crop resulting from either a specified peril e.g hailstorm or more general perils such as flood, adverse weather, pests, or damage by animals or birds.
Where a liability policy indemnifies two or more persons it is possible that one of the insureds may incur a liability to another. A cross-liabilities clause makes it clear that each insured is separately indemnified so that such a liability is covered. A good example is golf insurance for a private club-each member is considered a separate insured if another club member causes the injury.
Custody and control
Public liability policies often exclude liability for damage to property in the insured’s care custody and control but the exclusion maybe modified or deleted, e.g., in the case of an insured who provides car parks or cloakrooms or a repairer of, say, watches or cars.
An extension of a property insurance policy to cover customers’ goods in the insured’s custody, often subject to the proviso that the insured is responsible for them.
The sum awarded by a court as compensation for loss, damage, injury or breach of contract. Liability policies cover this amount of money awarded plus usually the cost of defending against the court case.
Debris removal clause
A clause in a fire insurance policy providing for payment of the cost of removing debris after a loss. Sometimes this can be a huge cost, depending on the extant of damage. Eg. the total collapse of a building.
Deductible (or excess)
This is an amount being the first part of the cost of a claim which the insured has agreed to bear. For example, on a policy with a deductible (or excess) of 100 dollars on a claim of 1000 dollars- the insurer only pays 900 dollars. The insured bears the 100 dollar deductible.
Benefit payment under a personal accident, sickness or permanent health insurance in respect of a period during which the insured is unable to follow in respect his occupation in whole or, in some cases, in part.
Dread disease cover
Health insurance payment only for specified diseases such as certain types of cancer, heart disease, strokes or kidney failure.
Duty of disclosure
A common law duty on the part of a proposer for insurance to disclose to the insurer all material facts, i e., all facts that would influence a prudent insurer in deciding whether to grant the insurance and, if so, on what terms. For example an insured may have had many big claims in the past but does not advise the new insurer.
Any information on a policy in addition to its normal wording which supplements or modifies its terms. It may be added when the policy is prepared, or afterwards.
The insurance of various perils arising out of plant and machinery, such as explosion or collapse of boilers, breakdown of electrical or mechanical plant and lifts and cranes, and resultant damage to the insured’s surrounding property and liability to third parties.
Engineering interruption insurance
Insurance covering the insured’s financial loss resulting from interruption to or interference with the insured’s business caused by an accident to machinery or a failure in public supply (e.g., of water or electricity).
Erection all risks
See Contractors’ All Risks.
Errors and omissions insurance
Insurance against losses due to errors or unintentional omissions. This is a special liability policy for 'professionals' eg. Lawyers, Accountants, Engineers, Architects etc.
Express – warranty
A promise by the insured, set out in a policy, that a given thing shall or shall not be done or that a state of affairs will or will not exist. Breaking this 'warranty' could mean cancellation of the policy or turning down a claim.
An insurance policy for the owner of s business against the possible dishonesty of his employees.
This is a special of insurance which covers works of art, statues, carvings etc in private or public collections, such as Art Galleries, Museums etc.
This is a plaque affixed to the wall of a building bearing the name and/or logo of the insurance company to show that the building is insured by the company. These were very common in the 17th and 18th century in the UK when the only fire brigades belonged to each individual fire insurance Company. So no plaque, no fire put out! These fire marks died out when local governments started national fire brigades. They are now real collectors’ items. Many of them were cast in lead, and indeed, melted when there was a fire! Others were cast in bronze so more of these types survived.
First loss insurance
Property 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 any deduction for 'average'.
Free on board shipments (F.O.B)
When goods are sold F.O.B the seller is only responsible for the goods until they are loaded into a carrying vessel at a port-thus they only arrange insurance up to this point-the buyer must make his own insurance arrangements from then on. To be sure of good coverage on the goods shipped from Cambodia to the world, it is cheaper and more effective to ship them CIF- as above definition and then charge the overseas buyer a CIF rate. PPI can arrange this as part of our Marine Cargo Insurance cover.
Insurance of the contents of deep freezers against damage caused by an accidental change of temperature.
The insurance of glass used commercially in shops or offices etc., against breakage due to an accident or malicious damage.
Insurance of golf clubs or resorts with often an addition of personal accident benefits, third party liability, and a cash benefit to cover hospitality costs if the insured makes a 'hole in one'.
The insurance of goods in transit domestically or international other than purely by sea. The insurance may cover either the goods or the carrier’s liability for them.
Insurance against damage to crops or glass breakage, motor vehicles etc., caused by hailstorm.
A package of insurances for private householders, including the insurance of contents against fire, theft and other perils and the liability of the householder as occupier. Sometimes insured as a single policy.
The care, cleanliness and maintenance of premises, including the systematic collection and disposal of waste. This is a very important check for insurers to make when they do a survey of the risk.
The date on which an insurance begins to operate.
This is a basic Principle of Insurance. It is the way that most insurance policies operate to make good a loss by paying money as compensation. The Principle is that an insured is put in the same position after a loss as they were before it. This is not always possible of course but the principle is that the insured should not make a profit on the loss- just an indemnity.
A policy covering a jeweller’s stock and goods entrusted to the jeweller against all risks, with certain exceptions (as in 'all Risks' policies).
A clause in a policy that specifies what country’s courts shall have jurisdiction in the event of a dispute under the policy or, in liability insurances, that excludes liability for third party claims brought in other than domestic courts. Most insurer charge much more for 'worldwide' jurisdiction, especially for USA and Canada.
Legal expense insurance
Insurance of the legal costs and expenses incurred by the insured in (a) pursuing a civil claim against a third party, (b) defending a civil action brought by a third party and (c) defending criminal proceedings where the office alleged was not a deliberate wrongful act. This is a common addition to many Household Policies in Europe.
Insurance against the death of livestock (cattle, pigs etc.)
The omission to do something which a reasonable person, guided upon those considerations which ordinary regulate the conduct of human affairs, would do something which a prudent and reasonable person would not do. It consists of a failure to exercise due care in a case in which duty to take good care exists. It is a tort giving rise to civil liability. This is the most common cause for third party liability claims.
Normal international Clauses
In addition to the London “A” clauses there are other international Trade Clauses which are used for special goods being transported (Frozen Foods, Oil and Gas, Food Grains shipped, etc.). PPI will advise and apply these on such special shipments.
A policy is said to be on an 'occurrence' basis if it covers the consequences of events occurring during a period of insurance even though claims may not arise until later (see claims Made Basis).
Open cover agreement
Most cargo insurance around the world is effected by means of an open cover agreement between client and insurer, whether a broker is involved or not. This is a simple agreement that the Insured agrees to declare all shipments to the Insurer who in turn agrees to insure them all on the terms set out in the agreement. Thus, for example, if the Insured accidentally forgets to send in the shipment declaration to the Insurer, it is still covered. This is a very good arrangement for the client insured.
Indemnity against claims arising out of the failure of a product to fulfil its intended function. Insurers are usually very reluctant to quote for this. They do not usually give 'guarantees'.
Products liability insurance
Insurance against the liability of the producer, supplier, tester or servicer of goods for injury to third parties or loss of or damage to their property caused by the goods. This is the normal products protection insurance given by insurers.
Indemnity to a professional person or firm against legal liability injury, loss or damage through breach of duty. This is also called errors and omissions liability.
Profits insurance (also see consequential loss insurance)
Insurance against the loss of profits resulting from the occurrence of an accidental event such as a fire or machinery breakdown.
Protection and indemnity risks
Certain risks have not always been readily insurable in the normal marine insurance market and ship-owners have formed mutual associations (clubs) to cover them. Protection risks include quarantine expenses, liabilities to crews, and collision and impact damage, wreck removal expenses, liability under towage contacts, and liability for damage to other vessels apart from collision. Indemnity risks include ship owners’ liability or customs offences.
Most events are the outcome of a chain of previous events. This immediate or effective cause, not necessarily that closest in time to the event, is termed the proximate cause- it is one of the basic principles of insurance.
In these troubled times, Trade Sanctions on certain countries can lead the international insurers and reinsurers to decline to cover shipments to these countries. For any 'Sanctioned' country, companies making shipments to these countries should always check with their insurer if cover can be arranged or not.
The right of one such as an insurer, who has indemnified another in respect of a loss, to be put in the place of that other person with regard to all other means of recouping the loss. For example if a contractor causes a fire which burns down a building, the main insurers will pay the loss, then sue against the contractors in the insured’s name.
System of check
The precautions taken by an employer to reduce or eliminate the possibility of loss through the dishonesty of an employee. Insurers will need this as a 'material fact' in fidelity guarantee insurance.
Utmost Good faith
One of the basic principles of insurance. The insured must disclose all 'Material facts' to the risk. Whilst the insurer must explain the terms of cover in a clear way.
These are standard London clauses attached by insurers to cover shipments affected by war check at a very low additional premium. However, in countries where war is already a serious risk, the insurer will check the London War Risk Committee to verify if cover can be given, and if so, at what premium increase.
Insurance of yachts, usually comprising accidental loss or damage to the craft, salvage charges and sue and labor charges, and liability to third parties including passengers if carried.