Associate of the Chartered Insurance Institute. A professional qualification awarded by the Chartered Insurance Institute to successful examinees.

A condition precedent to a constructive total loss in marine insurance. The Insurer usually rejects the ‘notice of abandonment’ and agrees to place the Insured in a position as though a writ had been issued against the insurer.

An unexpected event which happens by chance and is not expected in the normal course of events.

Physical Injury to a person, accidentally sustained directly and independently of all other causes.

The costs incurred by an Insurer in obtaining business. These may include commissions paid to agents and brokers, taxes, etc.

Events caused by forces of nature, without human intervention, and not preventable by reasonable precautions. Examples: flood, hurricane, earthquake.

The current cost of replacing an article with a similar one in the same condition. Any item has three basic values: original cost, actual cash value, and replacement value. For example, if you originally paid $400 for your living room couch, its actual cash value might be $175, but if it’s destroyed in a fire, replacing it will cost you $800.

An actual total loss can occur in four ways: (1) Where the subject matter Insured is completely destroyed; (2) Where the subject matter Insured ceases to be a thing of the kind Insured (This is termed ‘loss of specie’); (3) Where the assured is irretrievably deprived of the subject matter Insured, although it has retained its specie; or (4) In marine insurance, where a missing ship is deemed an actual loss when it has been posted as “missing” at Lloyd’s.

Another person or Company who has an insurable interest and has been named as an Additional Insured under the policy.

An extra charge for an alteration, during the policy period, which increases the hazard or the Company’s liability.

Where a basic or deposit premium is paid at inception, the premium is adjustable at the expiry of the policy on the basis set out in the policy document.

An independent person of competent skill and experience, appointed by the Insurer following a loss, who investigates and reports on the cause and quantum of the loss.

One who acts on behalf of another. One whose actions can “bind” his principal. Specifically, a representative of an Insurance Company with authority to solicit coverage contracts.

Coverage against loss or damage from all perils except those specifically excluded.

The Insurance Company’s total liability at a specific location.

This does not replace the normal policy claim deductible and is supplementary thereto. When a loss occurs, the normal policy deductible is applied. If a balance remains after applying the policy deductible, this net amount is applied to the AAD. If it is less than the AAD no payment is made to the Insured and the item is held in suspense until the next claim arises, if any. This procedure continues until the aggregate of the items held in suspense reach the AAD. Thereafter, the policy reverts to a contract without an AAD; subsequent claims being subject only to the normal policy deductible and being settled for the amount by which they exceed the policy deductible.

A form on which the prospective Insured states facts requested by the Insurance Company and on the basis of which (together with any information from other sources) the Insurance Company decides whether or not to accept the risk, modify the coverage offered, or decline the risk.

A valuation of property made for determining its insurable value or the amount of loss sustained.

Buildings or structures other than the Insured’s residential dwelling. (i.e., garage, shed, etc.)

The willful and malicious burning of property.

1.Transfer of a right. 2. The document making the transfer of a right. The right transferred may be an interest in the subject-matter of insurance, in the contract of insurance, or in policy moneys due to the insured.

Liability which would not rest upon a person except that he has accepted responsibility by contract, expressed or implied. This is also known as contractual liability.

Same as “insurance”.

Same as “Insured”.

Same as “Insurer” (Insurance Company).

The power or right to act on behalf of another.

(1) The arithmetic mean; (2) In marine insurance, loss or damage; or 3) In non-marine property insurance, where average is said to apply and there has been under-insurance, the insured’s claim is reduced in proportion to the under-insurance.

In maritime law, on the occurrence of a general average act the carrier has a lien on the cargo. To secure release of cargo, the cargo owner has to pay a deposit (usually a percentage of the value of his cargo) or alternatively produces an Insurer’s Guarantee of the eventual calculated contribution amount due by the cargo owner. At the time of payment of the deposit or production of the guarantee the consignee or cargo owner will be required to sign an Average Bond or “General Average Agreement” by which he agrees to the procedure for calculation of the general average adjustment and to pay his rateable proportion thereof. It is customary for the average bond or agreement to be countersigned by a guarantor or the consignee’s or cargo owner’s bankers.

Taking steps to remove a hazard, engage in an alternative activity, or otherwise end a specific exposure.