An agreement between an Insurer and another, termed a ‘policyholder’, whereby the policyholder is authorized to accept proposals for insurance contracts from third parties and to bind the Insurer to such contracts.
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Occurs when the subject matter insured or part thereof is not exposed to risk. For example, a policy is effected to cover a marine shipment of 100 boxes but only 80 boxes are sent. The Insured is entitled to a refund of premium on the 20 boxes that were not exposed to risk.