The per unit cost of insurance. (See also Premium). Usually expressed as a percentage which will be applied to the sum insured to calculate the premium.

A policy issued with an extra premium charge

Money received by an insurer in respect of a loss, thus reducing the loss, by way of subrogation, salvage or reinsurance.

A clause printed in red on marine cargo policies and certificates. Its purpose is to remind the Insured of the measures that need to be taken when goods are delivered damaged or are not delivered.

Payment of an amount of money related to the amount of the loss to or on behalf of the Insured, upon the occurrence of a defined loss.

(1) Restoring a lapsed policy and putting it back in force. The reinstatement may be effective after the cancellation date, creating a lapse of coverage. Some companies require evidence of insurability and payment of past due premiums plus interest.
(2) A practice whereby the amount which has been the subject of a claim is reinstated in the policy on payment of an additional premium, thus reverting the amount of cover which was reduced by the claim to the original sum insured.

(1) A contract of indemnity against liability by which the Insurance Company procures another insurance to insure it against loss or liability by reason of the original insurance. (2) Insurance by one Insurance Company of all or part of a risk accepted by it, with another Insurance Company which agrees to reimburse the Insurance Company for the portion of the claim reinsured. The Insurance Company obtaining the reinsurance is called the “ceding Insurance Company;” the Insurance Company issuing the reinsurance is called the “Reinsurer.” A Reinsurer may in turn seek reinsurance on some portion of the risk it has Reinsured, a process known as “retrocession.”

An Insurer who has reinsured his liability with another Insurer who then becomes the Reinsurer.

An Insurer who agrees to reimburse another Insurer in respect of claims on the latter’s liability.

A remote cause is one which contributed to the loss but was not the proximate cause of the loss. In the absence of any special provision in the policy, a loss must be proximately caused by an insured peril to be recoverable under the policy.

A vessel sunk in a harbour or some other place where it is a danger to shipping, may be marked, lighted or destroyed by the Authorities, and the cost of so doing charged to the owner of the vessel. Where a marine hull policy covers P&I risks, the Insurer will reimburse expenses for removal of wreck.

The continuation, in full force and effect, of something that is about to expire. With an insurance policy it is made either by the issuance of a new policy or renewal receipt or certificate, to take effect upon the expiration of the old policy.

In cargo insurance covering machinery, this clause provides that, in respect of damage, the Insurer’s liability is limited to replacing and fitting the broken part.

The total cost of labor, materials and services necessary to replace property in its entirety, with materials of like kind and quality, without deduction for depreciation.

A statement of fact, belief or expectation made by the Insured and/or his broker, to the Insurer when placing the insurance.

An amount held back or not released; in reinsurance, it is the proportion of the line written by the original Insurer that is not ceded to the reinsurer.

Usually known as an endorsement, a rider is an amendment to the policy which is used to add or delete coverage.

A circumstance where twelve or more persons use or threaten violence for some common purpose.

(1) A chance of loss; or (2) A person or thing Insured. (Impaired or substandard risk: An applicant whose physical condition or moral habits do not meet the standard on which the rate is based).

Management of the pure risks to which a Company might be subject. It involves analyzing all exposures for the possibility of loss, and determining how to handle these exposures through such practices as avoiding the risk, retaining the risk, reducing the risk, or transferring the risk, usually by insurance.

The felonious taking, either by force or by fear of force, of the personal property of another, commonly known as “hold-up.”