This page is designed to explain in plain English commonly used terms, insurance jargon and other abbreviations. Produced alphabetically, use the menu below to find your chosen word.
If the particular abbreviation is not listed, please email us.

Air Compressor A machine that increases the pressure of air frequently having an associated reservoir in the form of an air receiver.
Air Receiver Any vessel used for storing compressed air, or any vessel in which oil is stored and from which it is forced by compressed air.
All Risks Term commonly used to explain an insurance policy that provides cover for not only certain standard causes such as a fire, storm, and theft but also from Accidental Damage.
Average Term applied in connection with under-insurance in respect of the values at risk. If insurance is arranged based upon only a proportion of true value at risk, then the insurers will only be receiving a premium for a proportion of the entire value at risk. In the event of a claim, the insurers will only pay a proportion of the amount claimed using the following formula: The sum insured divided by the full value at risk multiplied by the loss. It is therefore very important that the full value is insured.
BIBA British Insurance Brokers Association. A trade body that acts on behalf of its members encouraging independence, quality of service and high standards throughout its broker members.
Bona-Fide Sub-Contractors Whilst it is difficult to provide an accurate definition it is generally accepted that these types of contractors comprise of 'proper' firms with their own Public and Employers Liability insurances, who supply not only labour but also materials to the contract and control the manner in which they perform this part of the contract.
Business Interruption Covers the loss of any gross profit following an insured claim under the property section of the insurance policy, such as a fire.
Claims When it comes to claims, the onus is on the policyholder to prove the loss. Almost all policies require the policyholder to notify the insurer immediately of any event which could give rise to a claim under the policy and to provide details usually within 30 days. If claims are not reported within this time, the insurers may refuse to deal with the claim.
Consequential Loss Same as Business Interruption. See Above.
Conditions All policies have conditions whether implied or expressed. It is important that they are fully complied with as failure to do so could make the policy invalid. As an example, the policy may require you to set and make fully operational any alarm system you have whenever the premises are unattended.

CORGI Confederation for the Registration of Gas Installers.
COSHH Control Of Substances Hazardous To Health 1994. Legislation which deals with hazardous substances. The HSE web site can provide information www.hse.gov.uk .
Cover Note A document issued as evidence that insurance has been granted pending the issue of the policy. For motor insurance the cover note includes a certificate of insurance to comply with the Road Traffic Act requirements and there is usually a time limit of 15 or 30 days.
Credit Insurance A policy to cover losses due to insolvency or failure of customers to pay accounts due for work carried out.

Days Of Grace There are no days of grace under a motor policy where the renewal premium must be paid on or before the renewal date for full cover to apply.
Declaration A statement signed by the policyholder at the foot of a proposal form, certifying the accuracy of the information given to the best of his knowledge.
Defective Products A liability policy will generally cover the consequences of defective construction but not the costs involved in repairing, replacing or re-instating any defects in the construction or anything installed or erected by the insured. This specialist cover may be available under a products guarantee policy.
Disclosure The duty of the insured and his broker to tell the underwriter every material fact before acceptance of the risk.
Directors and Officers Liability A policy to protect the interests of company directors or officers from possible personal liability claims in respect of their actions. For example: employees claiming for breaches of employment conditions, competitors claim for libel or slander, liquidators or receivers claiming for wrongful trading, regulators claiming for breaching trading standards, creditors if they feel they could recover monies owed more easy from you than from the company, the police for criminal actions. If you are successfully prosecuted you could be made to pay for damages, fined, sent to prison, disqualified from being a director for up to fifteen years. This policy will provide you with necessary cover to protect and defend your interests.
Employers Liability This provides cover for any sums, which you shall become legally liable to pay in respect of claims made against you by third parties arising from accidental bodily injury or disease to employees arising out of their employment caused during the period of insurance.
Endorsements An addition to the printed wording which changes or varies the terms of, or parties to the contract.
EPOS Electronic Point Of Sale. Computer linked system usually integrated to warehousing.
Efficacy Efficacy or failure to perform risk as it is commonly called, refers to the possibility of a particular product not working as it should do i.e. a fire alarm failing to go off when activated or a sprinkler system failing to work. Generally excluded from standard liability contracts, this cover is available for certain trades through specialised policies.

Excess The amount you are responsible to pay towards any claim.
Fidelity Guarantee Theft of money or contents belonging to you resulting from an act of fraud or dishonesty committed by an employee and occurring during the period of insurance.
GISC General Insurance Standards Council is a watchdog established to monitor and enforce standards in all areas of general insurance, including the fair treatment of customers. GISC members are monitored independently to make sure they follow the codes.

Heath & Safety At Work Act 1974 This legislation covers all aspects of health & safety in the workplace covering training, supervision, work methods and so on. Employers with more than 5 employees must have an up to date written health and safety policy to comply with the legislation. See our Heath & Safety pages for additional information.
Health & Safety Policy It is a legal requirement under the Health & Safety At Work Act 1974, that all employers must have a statement stating their policy on health and safety issues at work. If you have 5 or more employees, it must be in writing and issued to all. Further information may be obtained from the HSE web site www.hse.gov.uk .
Health Insurance A policy that will pay specific sums for medical expenses or treatments. Health policies can offer many options and benefits available.
Indemnity Indemnity is the legal principle that ensures that a policyholder is restored to the same financial position after the loss as he was in immediately prior to the loss.
Indemnity To Principal Clause Where any contract entered into with a principal so requires, the benefits of the insurance policy apply jointly to the insured and the principal, and the insurers will indemnify the principal for claims arising out of work done by the insured.
Inching & Crawling Death or bodily injury sustained by any employee of the Insured as a result of a machine being Inched or Crawled as defined in the policy.
Insurable Interest It can be defined as the legal right to insure arising out of a financial relationship, recognised at law between the insured and the subject matter of insurance. It must exist in order for cover to apply.
ISDN Integrated Service Digital Network.
IEE Institution Of Electrical Engineers.
JCT Joint Contracts Tribunal.
Latent Defects Insurance This is an essential precaution for every new building, which should be considered by construction companies. Defects can arise at any time during the design or construction process and more often that not they only become evident once the building has been handed over and that usually signals the onset of costly and uncertain litigation against a contractor or supplier, with no guarantee of success. This policy provides cover against damage which has not been discovered at practical completion, caused by e.g. errors in the design or construction of eliminates essential to the suitability or strength to the building, defects in the materials used in the construction, ingress or water through the buildings external walls and roofing, collapse, subsidence.
Legal Expenses A policy to provide legal advice and expenses in defending or mounting an action.
Lloyds Syndicate A member or a group of members for whose account a managing agent accepts insurance business at Lloyd's.

Material Facts Material information is information, which may influence the acceptance or assessment of the Insurance by your Insurers.

Examples of material facts are change of: title, occupation / business activities, address, vehicle details, areas of work, driver convictions, driver changes, premises changes, plant & machinery increases, occupancy of premises, alarm changes, exports, use of heat equipment, work above 10 metres, work at high risk areas.

It is your responsibility to provide complete and accurate information to Insurers when you take out your Insurance Policy, throughout the life of your policy and when you renew your Insurance.

It is important that you ensure that all statements you make on proposal forms, claim forms and other documents are full and accurate. Please note that if you fail to disclose any material information to your Insurers as and when they occur, it could invalidate your Insurance cover and mean that part or all of a claim may not be paid.

If you are in any doubt as to which information is material, you should disclose it.
Minimum & Deposit Premium Many liability policies are now subject to a minimum and deposit premium. This means that the premium charged will not be subject to any return premium in the event of cancellation during the period of insurance. If the premium is based upon estimated figures such as annual turnover and/or wages, the insurers will require you to supply the actual figures for the period of insurance in question. If the actual figures are higher than those estimated an additional premium will be payable but if the figures are less, no return premium will be allowed. Should the premium be paid monthly to a finance company such as Close Premium Finance, all outstanding instalments must be paid even if the policy is cancelled during the term.
Minimum Standards Of Security

Majority of insurers will require you to meet certain levels of security when taking out property insurance. The standard wording is as follows:

The policy will exclude claims arising from theft unless the premises are secured in accordance with the below minimum standards of security:

i. final exit doors must be secured as follows:

a. timber doors - by mortice deadlocks having five or more levers or conforming to BS3621 with matching boxed striking plate
b. aluminium doors - by cylinder mortice lock operating a swinging lock bolt
c. UPVC doors - by key operated multi-point locking devices having three or more locking points
d. the first closing leaf of double leaf doors must be fitted internally with bolts top and bottom

ii. all other external doors and internal doors leading to common areas or other premises, must be secured:

a. by the means set out in i., or
b. by key operated security bolts fitted top and bottom or
c. by a permanent key operated locking mechanism comprising hasp, locking bar or staple and padlock. If fitted externally, the padlock must be close shackled.


iii. all opening windows or rooflights accessible from the ground or via roofs, fire escapes, pipework or other structures must be secured by key operated locking devices or screwed permanently shut.

iv. any security measures stipulated or agreed by us in writing.

Any door or window officially designated a fire exit by the Fire Authority is excluded from these requirements.
Negligence The omission to do something, which a reasonable man, guided by those considerations, which originally regulate the conduct of human affairs, would do, or doing something, which a prudent and reasonable man would not do.
NACOSS Nacoss is a scheme run by the certification body the National Security Inspectorate (NSI) and is responsible for the regulation of electronic security systems installers. Nacoss approves companies in the electronic security sector across the British Isles. Nacoss is not a trade body. Nacoss works to ensure that security systems are of the highest quality and reliability. There are no members so firms cannot simply join by paying a fee. All Nacoss Recognised firms comply with relevant British Standards.
NHBC National House Building Council.
Non-Ferrous Metal Metals other than alloys of iron. i.e. brass and aluminium.

Packaging Protective covering generally made from paper, plastic film, metal or wood.
Performance Bond Surety put up by a contractor for satisfactory completion of a contract. Often arranged by the clients bankers.
Products Guarantee An insurance policy to provide an indemnity arising from the failure of the product supplied to fulfil its intended function.
Products Liability Usually part of a public liability policy, this covers you for any sums you shall be legally liable to pay in respect of claims made against you by third parties arising from accidental bodily injury, disease or accidental loss of or damage to property arising from goods supplied or sold.
Professional Indemnity A policy to provide cover against claims arising from negligent design or advice given in the course of the business usually for a specific fee.
Public Liability This provides cover for any sums that you shall become legally liable to pay in respect of claims made against you by third parties arising from accidental bodily injury, disease or accidental loss of or damage to property arising out of your business activities.

This includes all labour only subcontractors, irrespective of whether they have their own public liability insurance
Shrink Wrapping Plastic film, heat sealed or self adhesive, stretched over goods to hold in position during transportation.
Statutory Inspection Services In order to comply with your statutory obligations certain items of plant must be inspected by an authorised body. This would include for example, forklift trucks and air receivers.
Underwriter It is the underwriter's responsibility to assess each risk and decide a suitable price, or premium, for accepting the risk.
Warranties These are imposed by insurers and are fundamental conditions which if not absolutely complied with, will allow the insurer to repudiate the policy. An example would be a waste warranty, requiring that trade waste is swept up and removed from the premises daily.
WRULD Work related upper limb disorder.

 
 
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