Accidental damage cover v

Cover under a policy that provides all the benefits of standard named perils policy plus accidental damage cover, e.g. spilling paint on a carpet or computer. Under a named peril policy a loss has to be matched to a named peril.

Ab initio v

Insurance policies are void or voidable ‘ab initio’, i.e. from the beginning, if there is a breach precedent to the policy.

Accountants’ clause v

A clause in a business interruption policy which indemnifies you in respect of the cost of an accountant’s fee in respect of preparing and submitting the claim. Without the clause, the cost would not be covered.

Act of God v

Natural occurrences (earthquake, typhoon, etc.) that no amount of human foresight could have avoided. It is a defence against strict liability in tort. An example of this is seen in Nichols v. Marsland (CA 1876) where the defendant was not liable when exceptionally violent storms caused his artificial lakes to flood his neighbour’s land, but the defence is of very restricted application.

Additional Increase in Cost of Working v

An optional extension under a business interruption insurance. It allows you to incur reasonable additional expenditure to avoid or diminish any further reduction in turnover following a loss even if the amount payable exceeds the saving made. Without this extension you would only be able to recovery additional expenses that are economic and agreed by the insurers i.e. they will only agree to spend £1 to save at least £1. The extra cover is for a specific sum.

Adjustable policies v

Policies where, at inception, the insured estimates the amounts of key variables such as turnover or wages. The premium is based on this estimate but adjusted up or down at the end of the year when the actual figure is declared by the insured. Any return made to the insured is subject to a minimum premium.

Advance profits insurance v

A form of business interruption insurance relating to a new business or a new activity for an existing business. It covers loss of gross profit following delay consequent upon damage insured under a contractor’s all risks or erection all risks policy.

The delay in starting the activity may be due to damage to: (a) the new works, extension or machinery; (b) suppliers’ premises; (c) machinery in transit. The indemnity period commences on the date production was intended to start and continues until it does actually start, but any increase in cost of working is calculated from the date of loss.

Aggregate limit of indemnity v

The maximum amount that the insurer will pay in respect of all insured losses that occur during the policy term. No further claim is payable once the limit has been exhausted unless it has been reinstated by policy condition or agreement. Aggregate limits are common to professional indemnity insurance and product liability insurance.

All other contents clause v

A phrase in the basic specification wording of the standard fire policy to extend cover to forms of property otherwise excluded. The term includes money and stamps, national insurance stamps, documents, manuscripts and business books, computer systems records, patterns, moulds, plans and designs, employees’ pedal cycles and personal effects. Monetary limits are usually applied to the majority of these items and cover in respect of plans, documents, etc., is limited to the cost of labour in writing them up and not their market values.

All risks v

A term describing a property insurance covering any fortuitous loss or damage that is not specifically excluded. This contrasts with a policy covering physical loss or damage caused by a named peril, e.g. fire. The ‘all risks’ exclusions relate to inevitable forms of loss, such as depreciation and wear and tear, and other losses due to gradually operating causes. ‘All risks’ cover is available for personal possessions, cameras, jewellery, industrial equipment and goods in transit, and applies to Institute Cargo Clauses A. Under household and commercial policies on buildings and contents, and cover on motor vehicles, the term has given way to ‘accidental loss or damage’ as a means of going beyond named perils cover.

All Risks – Business Machines v

Loss of or damage to the property insured (usually portable equipment that may be used away you’re your business premises) within the territorial limits specified (Premises only, anywhere in the UK or anywhere in the World), subject to the excess in respect of each and every loss, and any non-standard terms specified.

Alternative accommodation clause (loss of rent) v

A clause in both household buildings and contents insurances to cover the insured if his home becomes uninhabitable due to insured damage. The buildings insurer will pay the reasonable cost of: any necessary alternative accommodation, loss of rent due to the insured and a maximum of two years ground rent for which the insured is liable, subject to a maximum of 10 per cent of the amount insured. The contents insurer covers the cost of alternative accommodation and rent payable by the insured up to 20 per cent of the sum insured.

Annual turnover v

Defined in a business interruption policy as the turnover during the 12 months immediately before date of damage (where the indemnity period is for 12 months or less).

Arbitration clause v

A policy condition that commits the insured and the insurer to use arbitration as a means of settling disputes as to the amount of a claim liability otherwise being admitted. The clause does not appear in liability policies.

Architects’, surveyors’ and consulting engineers’ fees v

These fees are covered when relating to insured property damage either by making due allowance in the sum insured or by a special item. The fees are payable for plans, specifications, etc., and general supervision of rebuilding in the event of fire or other insured perils. Increasing the buildings sum insured by 12.5 per cent and the machinery sum insured by 7.5 per cent often provides cover, but insured’s with very large sums insured may insure the fees on a first loss basis.

Fees paid by the insured for preparing the claim are not covered.

Average v

In non-marine property insurance if a sum insured is ‘subject to average’, and the sum insured is less than the value at risk at the time of loss, the claim will be reduced in the same proportion. The measure combats under-insurance.

Agricultural products and ecclesiastical property are subject to the special condition of average (the 75 per cent condition) as values fluctuate or are difficult to assess. If the sum insured is 75 per cent or more than the value at the time of loss no deduction is made for partial losses. The two conditions of average applies where property (e.g. A) is insured under both a specific policy and a more general policy covering property that includes additional property (e.g. A, B and C) under an inclusive sum insured. The first condition is pro rata average while the second is initially ‘non-contribution’, i.e. the more specific insurance pays first, leaving only any uninsured balance to be recovered under the general policy on the basis of pro rata average.

Average Condition v

Most insurance policies include an Average Condition which means that if your sum insured is found to be inadequate following a loss, then your claim payment may be proportionately reduced. For example, if the sum insured is only 50% of the ‘true’ value, then only 50% of the amount claimed will be paid. You should remember that the onus for setting adequate sums insured falls on you as the policyholder.

Betterment v

The amount of the increase in the value of property after it has been reinstated or repaired by the insurer under a contract of indemnity. Insurers make a deduction from the claims payment as the insured’s contribution to ‘betterment’.

Blanket motor insurance certificate v

A certificate that sets out a general description of vehicles rather than identifying the vehicles covered by their registration numbers. Particularly useful for fleet insurances, it obviates the need for fresh certificates when a fleet owner buys or sells vehicles.

Bodily injury v

Injury, sickness or disease sustained by a person, including death resulting therefrom. Personal accident policies cover bodily injury caused ‘by accidental, violent and visible means solely resulting in death or disablement’. Post traumatic stress disorder may amount to bodily injury, particularly where bodily harm has also occurred or where the policyholder has been in an accident. Public liability insurers cover legal liability for bodily injury but some use the term personal injury and define it as including ‘illness’. ‘Injury to feelings’ is clearly contemplated by insurers covering liability due to wrongful arrest or false imprisonment or similarly specified events.

Book Debts v

Book Debts covers your books and accounting documents if they are lost or destroyed. The cover includes the cost of tracing and establishing how much customers owe you, the amount of any unpaid debit balances which cannot be traced and professional fees incurred in production of information relating to the claim.

Buildings and/or Tenants Improvements v

Cover is on a Reinstatement basis and you should insure for the full rebuilding cost, not the market value. This should take into account any possible increase in cost due to delays in rebuilding and/or alterations in rebuilding design. The sum insured should also include the cost of clearing the site, fees for lawyers, architects, surveyors and consulting engineers (as a guide, this is usually 10-15% of the rebuilding cost), walls, gates, fences, outbuildings and annexes, and any signs and nameplates.

The most effective way of achieving an accurate sum insured is to obtain a professional re-building valuation.

Business Interruption v

Cover for loss of profit or revenue including additional expenditure incurred to maintain your business following insured loss or damage at the premises.

If the Basis of Cover is Increased Cost of Working only, this provides cover for additional expenditure incurred to maintain your business following insured loss or damage at the premises only.

Liability under this basis of cover is limited to 50% of the sum insured during the first 3 months of the indemnity period, the balance being payable in equal amounts over the remaining months.

Cancellation clause v

A general insurance clause permitting the insurer to terminate insurance cover during the policy term. The clause sets out the notice procedure the insurer must follow, and the basis for refunding the unexpired premium. Some policies also give the insured the right of cancellation.

Caveat emptor v

Common law rule meaning ‘let the buyer beware’. The principle is that the buyer of goods had the opportunity to satisfy himself as to the suitability of the article and therefore no liability attaches to the vendor. However, the Sale of Goods Act 1979 provides a measure of ‘buyer’ protection and the Defective Premises Act 1972, s.3, abolishes caveat emptor in claims based on a vendor’s negligence in certain building work done pre-sale or pre-letting of property. Insurance contracts are subject to utmost good faith and not caveat emptor. The FCA calls upon the seller of financial products to give ‘best advice’.

Certificate of insurance v

Document evidencing the existence of insurance. Certificates are legally required in the following classes: employers’ liability insurance; motor insurance (Road Traffic Act cover); oil carrying vessels (pollution liability cover).

Claims condition v

A condition setting out what the insured has to do in the event of a claim. It covers notice of loss, assistance to the insurer and proofs of loss, and in the case of liability policies there is a conduct of proceedings clause and a non-admission of liability clause.

Collusion v

Deception perpetrated by two or more parties. Theft insurers exclude theft by collusion when a member of staff is involved. Such a theft has little to do with the security of the premises. Cover may be available under fidelity guarantee insurance.

Commission disclosure v

ICOB Rules require insurance intermediaries dealing with general commercial customers to disclose, if requested to do so, their commission plus any commission received by any affiliated companies.

Common duty of care v

Under s.2 , Occupiers’ Liability Act 1957, the occupier owes a duty to all lawful visitors to ‘take such care as in all the circumstances of the case is reasonable to see that the visitor will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier to be there’. The occupier must be prepared for children to be less careful than adults while tradesman can be expected to appreciate risks incidental to their trade. By s.2(4)(a) a warning will absolve the occupier if it is sufficient to make the visitor reasonably safe.

Computer All Risks v

Covers loss of or damage to computer equipment on an all risks basis, usually including breakdown whilst at the premises. Cover can be extended to include portable equipment away from the premises within the territorial limits specified (Anywhere in the UK or anywhere in the World).

Cover extensions can include:

Additional equipment obtained throughout the year up until your policy renewal up to £250,000
Programs lost following damage
Up to £25,000 for replacement of existing data and programs if not compatible with replacement equipment
Increased Costs of Working – This covers the increased costs of working resulting from accidental damage, breakdown, failure of electricity and telecommunications services or distribution equipment as well as malicious erasure of data and denial of access.
Reinstatement of Data – This covers the costs of reinstating data following erasure, malicious or otherwise, destruction, distortion or corruption.

Conditions v

Parts of a policy that must be complied with by one party or the other. Conditions may be implied by law or expressed, i.e. set out in the policy. The effect of a breach by the insured depends upon whether it relates to a condition precedent (things to be done before the contract is concluded, e.g. utmost good faith); a condition subsequent (things to be done during the policy term, e.g. maintaining certain standards); a condition precedent to liability (things to be done before the insurer is liable for a particular loss, e.g. proper notification).

Contingent liability cover v

Fallback cover that does not replace a primary cover but is triggered if the intended primary cover is non-existent or ineffective. An employer normally relies upon an indemnity under the employees’ car insurances, when employees use their cars on his business. If an employee’s policy is invalid, the employer’s indemnity fails but the motor contingent liability section of his public liability policy fills the gap. Others who need contingent liability cover include principals relying on cover arranged by contractors and hire car operators relying on insurance arranged by hirers.

Continuing Duty of Utmost Good Faith v

The revival or continuation of the pre-contractual duty of utmost good faith. The duty may be revived by policy conditions in regard to defined changes in risk or situations calling for fresh information as when cover applies under ‘held covered’ clauses. Where the change goes to the root of the contract, the insurer may come off risk, so the duty revives if the insurer is to continue the policy with a newly defined risk. The duty revives at the renewal of a contract. In addition good faith, meaning an absence of fraud, applies in the matter of claims.

Contract price clause v

Clause whereby if damage to undelivered goods leads to cancellation of the contract, the insurer will settle on the contract price rather than production costs. The profit element, otherwise irretrievably lost, becomes a part of the indemnity.

Contractors All Risks v

Loss of or damage to the contract works (excluding existing structures), contract materials and plant including hired-in plant, owned by you or for which you are contractually responsible. Cover is on an All Risks basis and also includes offsite storage of materials designated for inclusion in the contract you are working on, transit of contract materials to and from the contract site including loading and unloading, and plant and tools anywhere in the UK including whilst on site, in transit or at your premises.

Contractual liability v

Liability that arises as a result of a contract, as opposed to liability, imposed by common law or statute. Liability policies exclude liability for liquidated damages as, unlike unliquidated damages, they are agreed under contract.

Contribution v

A corollary of indemnity meaning an equitable division between insurers where two or more insurers cover the same insured and the same risk. Each insurer pays a rateable proportion of the loss either in proportion to the sums insured (the maximum liability method) or in proportion to their respective independent liabilities (the independent liability method). Insurers may avoid contributing to ‘doubly’ insured losses by using a non-contribution clause.

Contributory negligence v

Negligence by which a person contributes to the happening of an accident to him or contributes to the injury or damage he sustains. He is part author of his own misfortune and, under the Law Reform (Contributory Negligence) Act 1945, his damages will be reduced according to his share of the blame.

COSHH (Control of Substances Hazardous to Health Regulations 2002/(Amendment) Regulations 2003 HSE enforceable regulations to protect workers from substances hazardous to health. Substance means any solid, gas, fume, dust or vapour and any micro-organism. The employer must, inter alia, assess, monitor and control each work situation to ensure that workers are not exposed to possibly harmful amounts of any substance connected with the work. COSHH sets out limits for a large number of hazardous substances based on maximum exposure limits and occupational exposure standards. The employee has a duty to cooperate with the employer regarding monitoring and health surveillance.

Cost, Insurance and Freight (CIF) v

A form of sale contract whereby the seller’s price includes the cost of goods and insurance and freight charges through to the agreed destination. Consequently the seller must effect marine insurance for the entire transit.

Cover note v

A document sometimes issued by insurers pending preparation of the policy. It may be issued as evidence of more permanent cover or it may be an acknowledgement of temporary cover pending the insurer’s final decision.

Credit Insurance v

Cover against losses arising from non-payment of trade credit and buyer insolvency in both your domestic and export markets. Cover also includes a trade debt collection service and financial risk management tools.

Cross liabilities v

When two blameworthy vessels collide, liability will be apportioned between them according to their degree of fault and, following the running down clause, there will be two payments, i.e. cross liability. Admiralty law prescribes a single liability settlement, a method favourable to the receiving shipowner. 2. Where two or more jointly insured parties, (marine or non-marine) have legal rights against each other, the liability cover will respond as though a separate policy had been issued to each named insured. This is made possible by a cross liabilities or severability of interest clause.

Cyberliability v

Generic term for various types of legal liability arising from business use of the Internet and e-mail.

Day One v

Day One is a form of Reinstatement cover used as a method of countering the effects of inflation on sums insured. This can apply to buildings and/or machinery, plant and all other contents. The sum insured is shown in two parts – Declared Value (normally shown in brackets) and Sum Insured. The declared value should represent the Reinstatement cost on the first day of the period of insurance (i.e. on Day One). The declared value is then increased by an agreed percentage (the inflation provision) to produce the ‘Sum Insured’, which should be adequate to meet the reinstatement costs that could be incurred until the end of the period of reinstatement. This could be years after the damage has occurred.

Day one’ basis of reinstatement cover v

A reinstatement cover variant. The sum insured is in two parts – the declared reinstatement value of the property at inception (day one) and an added provision for inflation (between 115 per cent and 150 per cent) during the policy and reinstatement periods. An agreed percentage of 150 per cent attracts a flat rate of 15 per cent above the normal premium. Alternatively the rate is 7.5 per cent with the premium being adjustable at the end of the year. ‘Day one average’ applies the actual value at risk on ‘day one’ against the ‘day one’ declared value rather than the value at risk at the date of reinstatement against the sum insured.

Declaration-linked basis v

Property insurance. Declaration based policies on stock that permit the insured to maintain a full insurance on fluctuating values without over-insuring. The insured selects the full amount at risk and pays a deposit premium based on 75 per cent of that figure. Following a series of stock declarations the premium paid is adjusted up or down up to 33 1/3 per cent of the deposit premium at the end of the year. 2. Business interruption. When insured on a ‘sum insured’ basis it works in the same way as property (see 1. above) but the adjustment is based on a comparison between the projected gross profit and the audited gross profit figure. Under a declaration-linked policy the insurer provides cover up to 133 1/3 per cent of the estimated gross profit. The deposit premium is based on 75 per cent of the estimate and the premium adjusted up or down at the end of the year subject to a minimum premium of 50 per cent of the deposit.

Declared value v

A term used in fire insurance to refer to the total cost of reinstatement as declared by the insured (see ‘DAY ONE’ BASIS OF REINSTATEMENT COVER). The cost will include re-building and re-equipping, plus due allowance for professional fees, public authority requirements and debris removal.

Defective workmanship v

Motor trade. Negligent workmanship on a customer’s vehicle or the sale of a defective part by a motor vehicle repairer may cause an accident. The resultant liability can be insured under a motor trader’s comprehensive road and garage policy, or as an extension of the internal risks policy. ‘Workmanship’ means ‘repair, servicing, or maintenance’ and includes the pre-delivery check of a new vehicle and MOT tests. The widest available cover embraces: negligent workmanship, sale of spare parts and liability for damage to the customer’s vehicle. 2. Public liability.

Defective Workmanship/Service Indemnity v

Defective Workmanship &/or Service Indemnity provides protection against your legal liability for injury or damage sustained by your customers who arise from:Defects in the goods sold or supplied by you
Defective workmanship performed by you on their vehicles
Cover automatically includes solicitors’ fees, all costs and litigation expenses, damages awarded and claimant’s costs for which you are legally liable. The limit of indemnity provided relates to any one period of insurance.

Defects liability period/maintenance period v

A pre-agreed period, commonly 12 months, starting from practical completion during which a builder must remedy, at his own expense, all genuine defects appearing in the building. The builder’s liability policies should continue to run during this period.

Denial of access v

Business interruption extension covering loss of income due to policyholder and customers being denied access to premises following damage by an insured peril to another building, e.g. fire at adjacent premises resulting in a road block. Cover for ‘non-damage’ events that deny access, e.g. crowd demonstrations, are also insurable.

Deterioration of Stock v

Loss of or damage to food as a result of the breakdown of an approved freezer or refrigeration unit, or by accidental failure of the public electricity supply.

Directors & Officers Liability Insurance v

Protects directors, officers and other employees with managerial responsibilities from costs that they may become personally liable to pay as a result of litigation by various parties including shareholders, government bodies, regulators, liquidators/receivers, creditors and other third parties.Cover includes defence costs, settlements and damages but also the expertise of your insurers in defending claims on your behalf.

Cover can be extended to include:

Entity Extension – This provides an additional indemnity for claims made against your company (rather than an individual director or officer) for wrongful acts, for employment related wrongful acts and legal representation expenses in respect of any investigation under the Health and Safety at Work Act 1974.
Employment Practices Liability – This protects your company against the financial impacts of employment legislation tribunal claims. Cover includes damages, judgements, settlements, defence costs and claimant’s costs, for which you may be legally liable, legal representation costs for employment investigations, the cost of paying wages from the date of dismissal to the date of judgement and punitive and exemplary damages where insurable by law.
Cover is on a worldwide basis (except USA which can be added by separate endorsement) and also includes acts committed prior to inception of the policy, provided the claim is brought within the policy period.

Employers Liability v

Employers Liability is cover required by law. This insurance provides an indemnity in respect of your legal liability for injury or disease sustained by your employees caused by or arising out of their employment. Cover is on a worldwide basis for employees normally resident in the UK but includes employees who are temporarily working overseas.Cover also includes legal costs and expenses incurred with the written consent of insurers in defending prosecutions under the health and safety legislation of Great Britain, Northern Ireland, the Channel Islands and the Isle of Man.

Labour only sub-contractors, work experience and government scheme trainees are deemed to be employees.

Premiums are calculated on the estimated annual wages and then adjusted at the end of the policy period based on the actual declared wages. This adjustment could result in an additional or return premium.

Employment Practices Liability v

This protects your company against the financial impacts of employment legislation tribunal claims. Cover includes damages, judgements, settlements, defence costs and claimant’s costs for which you may be legally liable, legal representation costs for employment investigations, the cost of paying wages from the date of dismissal to the date of judgement and punitive and exemplary damages where insurable by law. Cover is on a worldwide basis (except USA which can be added by separate endorsement) and also includes acts committed prior to inception of the policy, provided the claim is brought within the policy period.

Engineering – Business Interruption v

Cover for loss of profit or revenue following insured loss or damage at the premises. Cover extends to include:Payment of expenses which continue to be incurred despite a reduction in turnover
Additional expenses incurred which assist in preventing or minimising the reduction in turnover, such as overtime payments, hiring alternative machinery or the cost of provisional repairs.
Accountant’s fees incurred by you in producing information required by the Insurers

Engineering – Deterioration of Stock v

Covers loss of or damage to stock as a result of the breakdown of refrigeration units, freezer units or cold stores. Cover includes:

 

  • Change in temperature due to sudden and unforeseen damage
  • Accidental failure of the public electricity supply and contaminant by refrigeration gases or fumes
  • Cleaning and decontamination costs following an insured event up to a maximum of £25,000
  • Disposal of insured goods up to £25,000

Engineering – Machinery Damage v

This insurance covers loss of or damage to your machines and the machinery process. There are a number of cover options available:

Sudden and Unforeseen
This is the widest form of cover and provides indemnity against breakdown, explosion, collapse and damage by accidental causes, which necessitates repair or replacement of the plant.

Breakdown, Explosion or Collapse
Provides indemnity for damage to plant arising from mechanical and electrical defects in the equipment, occurring under normal working conditions. For pressure vessels, damage to the item’s permanent structure by its own internal steam or fluid pressure or loss of steam or fluid pressure causing the item to explode or collapse.

Accidental Damage
Provides cover for damage to plant for any cause other than its own explosion, collapse or breakdown.

Engineering – Machinery Movement (Annual) v

Covers loss of or damage to insured property during the operations specified. The definitions of all available operations are as follows:Transit – Transportation (other than by sea or air) of the insured property and any trans-shipments, deviations or storage en route from the time that the load is secured onto the carrying vehicle until the commencement of removal of the securing devices.
Erection – From the completion of the unloading of the insured property from transport vehicles until the completion of testing or running or the date of taking over by the purchaser whichever is the earlier.
Dismantling – From the commencement of dismantling and/or disconnecting of the insured property until the commencement of loading onto transport vehicles.
Re-Sitting – Bodily removal of insured property or a major part of it from one site to another in the same premises and not involving the use of road or rail vehicles.
Handling – Bodily removal of the insured property from one point to another.Cover applies on an annual basis with all specified operations carried out during the policy period are covered.

Cover does not include:

Loss of or damage to insured property caused by or arising from its own breakdown, derangement or explosion
Defects in material workmanship or design (but insured damage resulting from it is covered)
Loss of use or loss of profits as a result of damage
Unaccountable or unexplained losses discovered during checks or inventories unless you can provide reasonable proof that such losses occurred as a result of an identifiable incident

Engineering – Machinery Movement (Specific Contract) v

Covers loss of or damage to insured property during the operations specified for a specific contract. The definitions of all available operations are as follows:

Transit – Transportation (other than by sea or air) of the insured property and any trans-shipments, deviations or storage en route from the time that the load is secured onto the carrying vehicle until the commencement of removal of the securing devices.

Erection – From the completion of the unloading of the insured property from transport vehicles until the completion of testing or running or the date of taking over by the purchaser whichever is the earlier.
Dismantling – From the commencement of dismantling and/or disconnecting of the insured property until the commencement of loading onto transport vehicles.

Re-Sitting – Bodily removal of insured property or a major part of it from one site to another in the same premises and not involving the use of road or rail vehicles.
Handling – Bodily removal of the insured property from one point to another.

Cover does not include:

  • Loss of or damage to insured property caused by or arising from its own breakdown, derangement or explosion
  • Defects in material workmanship or design (but insured damage resulting from it is covered)
  • Loss of use or loss of profits as a result of damage
  • Unaccountable or unexplained losses discovered during checks or inventories unless you can provide reasonable proof that such losses occurred as a result of an identifiable incident

Engineering – Statutory Inspection v

In order to satisfy your statutory requirements under the Health and Safety at Work legislation, certain types of machinery and plant must be inspected by a Competent Person on a regular basis. The legislation states how often different types of plant must be inspected and to what level.

Your Insurers provide their services in the role of the competent person and inspect the plant specified in the schedule on your behalf. Non-Statutory plant inspections can also be included.

Fidelity Guarantee v

Cover for losses caused by fraud or dishonesty committed by your employees.

Fleet Declarations – Annual v

Your fleet policy is subject to an annual declaration, therefore all changes to the Vehicle Schedule (being permanent or temporary) must be declared to your Insurers at the end of the current period of insurance.

Fleet Declarations – As & When v

Your fleet policy is not subject to declarations, therefore any changes to the Vehicle Schedule (being permanent or temporary) must be notified to us as and when they occur in order that we may advise your Insurers who, in turn, will update the Motor Insurers Database on your behalf

Fleet Declarations – Half Yearly v

Your fleet policy is subject to six monthly declarations, therefore all changes to the Vehicle Schedule (being permanent or temporary) must be declared to your Insurers half way through and at the end of the current period of insurance.

Fleet Declarations – Quarterly v

Your fleet policy is subject to quarterly declarations, therefore all changes to the Vehicle Schedule (being permanent or temporary) must be declared to your Insurers each quarter.

Glass v

Covers breakage of glass at the premises, including the cost of boarding up, subject to the excess in respect of each and every loss, and any non- standard terms specified. Cover can be for external glass only, all internal and external glass including sanitary ware, or could also be extended to include shop fronts including their contents.

Goods in Transit v

Loss of or damage to your own goods or goods for which you are responsible in connection with your business whilst in transit on land or water anywhere within the territorial limits specified, subject to the excess in respect of each and every loss, and any non-standard terms specified.

Legal Expenses v

Cover for defending you or an employee acting on your behalf in any criminal action or certain civil action taken against you for any non-motor related incident arising in connection with the business. This includes cover for prosecutions under health and safety legislation, data protection rules and wrongful arrest.

Loss of Licence v

Cover for the reduction in the value of your interest in the premises or business as a result of non-renewal or withdrawal of your licence from causes beyond your control.

Loss of Rent v

Financial protection for your business following insured loss or damage at the premises insured. The cover replaces the shortfall in your rental income up to the indemnity period that you have selected.

Cover usually includes:

  • Payment of expenses which continue to be incurred
  • Any additional expenses incurred which assist in preventing or reducing a drop in rental income
  • Accountant’s fees incurred by you in producing information in support of a claim
  • Loss of income due to damage to a nearby property that prevents tenants gaining access to the premises
  • Reduction in income due to loss or damage at the public electricity, gas and water supplier’s premises
  • Loss or rent due to damage at managing agent’s premises
  • Loss of rental income due to Legionellosis (Legionnaires disease)
  • Closure of a nearby attraction which has a detrimental effect on rental income, both for existing rentals and whilst negotiating a new lease
  • Cover for the additional interest payable whilst being repaired or replaced should a building awaiting sale be damaged or destroyed
  • Failure of tenants insurances up to £500,000
  • Inadvertent failure to insure up to £500,000
  • Privity of Contract up to a limit of £2,000,000
  • If there is a pre-existing Cessor clause in the lease, any loss under this section would include payment of the insurance premiums that the lessee would have paid.
  • Includes any premises occupied by yourselves

Machinery Plant and All Other Contents v

Furniture, fixtures, fittings and machines are usually insured on a Reinstatement basis and the sum insured should be based on their new replacement value. You should also include an amount for proprietors’ and employees’ personal belongings, debris removal, the cost of reproducing your business books and computer records and any fees that may be required for lawyers, architects and surveyors. Occasionally, you may have chosen to insure on an Indemnity basis which would allow for a payment based on the current value of the item, taking into account deductions for depreciation or wear and tear, based on the age and condition of the equipment at the time of the loss.

Marine Cargo v

Provides cover for loss of or damage to goods whilst in transit and in storage during the normal course of transit, including imports, exports, inland transits, loading and unloading, and returned goods on a worldwide basis. Goods can be raw materials and/or finished goods and claims are paid based on the value of the goods, rather than weight, subject to the policy limits specified.
Cover can be extended to include:

Non-Sale Movements such as inter-company movements, exhibitions, engineer’s tools and rep’s samples.
Storage of goods outside the normal course of transit
Stock throughput cover – A combination of marine cargo, stock and distribution cover all in one.
Whilst cover is provided on a worldwide basis, your policy will include an Excluded Territories clause as standard. The excluded territories are usually: –

Afghanistan, Angola, Democratic Republic of Congo, Ethiopia, Iran, Iraq, Lebanon, Liberia, Libya, Malawi, Nigeria, Philippines, Rwanda, Somalia, Sudan, Yemen, all former Yugoslavian states (see below) and all former USSR states (see below).

Former Yugoslavian states – Bosnia, Herzegovina, Croatia, Macedonia, Serbia & Montenegro, and Slovenia.
Former USSR states – Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Russia, Siberia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.

Although these tend to be standard throughout the market, they are subject to change so please check your policy wording for exact details. Insurers will consider inclusion of cover for excluded territories on an individual basis subject to full details.

Material Damage v

Cover for loss of or damage to the property insured by specified causes, subject to the policy terms, conditions and exceptions, and less the amount of any excess applicable for each and every claim.

Money & Personal Accident/Assault v

Loss of money belonging to your business or for which you are responsible.
Personal Accident/Assault provides cover for bodily injury sustained by someone being attacked whilst carrying your business’ money.

Cover is normally subject to limits for different occurrences as follows:

Credit company sales vouchers, crossed cheques and other non-negotiable forms of payment
Cash on the premises during business hours
Cash on the premises outside business hours in a locked safe
Cash on the premises outside business hours not in a locked safe
Cash in bank night safe
Cash at private home of directors or authorised employees
Cash in transit

Motor Fleet v

You motor fleet policy provides cover in accordance with the requirements of the Road Traffic Acts giving unlimited legal liability cover for death or injury to any third party arising out of the use of your business vehicles. Third party property damage is covered up to the limit of indemnity specified in your policy. Cover also includes any costs and expenses incurred, with your insurer’s written consent, in connection with the claim made against you.

The level of cover chosen for each vehicle can vary and a brief summary of the cover provided by each option is as follows:

Third Party Only (TPO)

Legal liabilities only, as defined above.

Third Party, Fire and Theft (TPFT)

In addition to legal liabilities, cover for loss of or damage to your vehicle caused by fire or theft only. In the event of a claim, your insurers will repair the vehicle, provide a replacement vehicle or reimburse the market value of the vehicle.

Comprehensive (COMP)

In addition to legal liabilities, cover for loss of or damage to your vehicle caused by fire or theft, or following an accident, irrespective of who is at fault for the accident, and malicious damage. In the event of a claim, your insurers will repair the damaged vehicle, provide a replacement vehicle or reimburse the market value of the vehicle.

The principle motor fleet policy exclusions are as follows. For a full list of exclusions, please refer to your policy documents.

Loss of use
Depreciation, wear and tear, mechanical or electrical breakdown, failure or breakage
Damage to tyres
Loss of value following repair
Loss or damage arising from theft when the keys have been left in or on the vehicle.
Death of or bodily injury to employees whilst driving an insured vehicle in the course of employment (This would be covered under your Employers Liability policy)

Motor Insurance Database v

It is your responsibility to ensure that this is kept up to date with all changes of vehicles as and when they occur unless your Insurers have confirmed that they will carry this out on your behalf. Details of all relevant vehicles must be provided in electronic format to the Motor Insurance Database website in order to satisfy the requirements of the relevant law applicable to England, Scotland, Wales and Northern Ireland. Failure to do so could lead to prosecution.

Personal Accident/Sickness v

Cover for accidental bodily injury to the insured person. The benefits payable for death, loss of limbs, eyes etc and permanent total disablement are lump sums, whilst temporary total disablement and temporary partial disablement benefits are paid on a weekly basis until incapacity has ceased or until the benefit period has been reached, whichever occurs first. Temporary total disablement and temporary partial disablement benefits can also be extended to include cover in the event of sickness.

The deferred period is the length of time that must be exceeded before a claim can be made. Alternatively, if an excess applies, this amount will be deducted from each and every claim.

Products Liability v

Products Liability covers the goods you manufacture, supply, sell, repair, service, maintain or test, which through your negligence causes injury to the public or damage to property not owned by you or in your custody or control.

Cover automatically includes solicitors’ fees, all costs and litigation expenses, damages awarded and claimant’s costs for which you would be legally liable. The limit of indemnity provided relates to any one period of insurance.

Premiums are calculated on estimated annual turnover, and then adjusted at the end of the policy period based on actual declared figures. This adjustment could result in an additional or return premium.

Professional Indemnity Insurance v

Provides cover up to the limit of indemnity against any claim (including claimant’s costs and expenses) in respect of civil liability arising out of your business due to:

Breach of professional duty arising out of negligence, whether by act, error or omission
Unintentional infringement of intellectual property rights
Breach of confidence
Libel and slander
Fraud and dishonesty of business partners, directors, members and employees
Cover extends to include defence costs, court attendance compensation, criminal prosecution defence costs, mitigation costs and accidental damage to documents.

Property Owners Liability v

This insurance covers your legal liability for injury to the public or loss of or damage to property not owned by you or in your custody or control arising out of your ownership of the buildings &/or land insured.

Cover automatically includes:

Obstruction, trespass, nuisance, interference, wrongful arrest or eviction
The Defective Premises Act
Legal costs & expenses in defending prosecutions under all relevant Health & Safety legislation
Associated court attendance costs
Employees’ & visitors’ personal belongings
Indemnity to managing agents
The limit of indemnity provided relates to any one occurrence or series of occurrences arising out of one event.

Public Liability v

Public Liability provides protection against your legal liability for injury to the public or for loss of or damage to property not owned by you or in your custody or control. Cover usually extends to include:

Obstruction, trespass, nuisance, interference, wrongful arrest and eviction
Contingent motor third party liability arising out of the use of vehicles not owned by you within the UK
Employees’ and visitors’ personal belongings
Personal liability of employees and directors whilst they are overseas on your business
Liability for loss of or damage to premises hired, leased or rented to you for the purposes of your business
Legal costs and expenses in defending prosecutions under all relevant health and safety legislation
Associated court attendance costs
The limit of indemnity provided relates to any one occurrence or series of occurrences arising out of one event.

Premiums are calculated on estimated annual wages and/or turnover, and then adjusted at the end of the policy period based on actual declared figures. This adjustment could result in an additional or return premium.

Road Risks v

Provides cover for any vehicle owned by you or in your custody or control in connection with your business. Cover also applies for vehicles away from your business premises within defined territorial limits and whilst such vehicles are temporarily in the custody or control of your sub-contractors. Cover is provided whilst the vehicle is being used in connection with your motor trade business and for social, domestic and pleasure purposes by principals, partners, directors, their spouses and employees.

The level of cover chosen can vary and a brief summary of the cover provided by each option is as follows:

Third Party Only – Cover in accordance with the requirements of the Road Traffic Acts giving unlimited legal liability cover for death or injury to any third party arising out of the use of the vehicle.

Third Party, Fire and Theft – In addition to Third Party cover as defined above, cover is also provided for loss of or damage to the vehicle caused by fire or theft only. In the event of a claim, your insurers will repair the vehicle, provide a replacement vehicle or reimburse the market value of the vehicle.

Comprehensive – In addition to Third Party cover, cover is provided for loss of or damage to the vehicle caused by fire, theft or following an accident, irrespective of who is at fault for the accident, and malicious damage. In the event of a claim, your insurers will repair the damaged vehicle, provide a replacement vehicle or reimburse the market value of the vehicle.
Cover can be extended to include social, domestic and pleasure use by either named persons or unnamed relatives and friends of partners or directors.

Stock v

Claims are settled on a cost only basis and your sum insured should reflect this value. You should also include separate amounts for any target stock items that you may have, such as cigarettes and tobacco, wines and spirits, radio, TV and other electrical items, computer equipment and mobile phones.

Theft v

Theft provides cover for theft or attempted theft involving entry to or exit from the premises by forcible and violent means or involving actual or threatened assault or violence.

VAT Status (impact on Sums Insured) v

If you are non-registered, exempt or partially exempt you should ensure that all sums insured are adjusted to include the non-recoverable VAT element.

Warranties and Conditions Precedent to Liability v

Your policies may contain Warranties and certain Conditions which determine whether cover would apply in the event of a claim.

Where a Warranty is included, any failure to comply fully will allow your insurers to repudiate any claim, irrespective of whether the incident was connected with the breach of compliance. For example, if you were in breach of a No Smoking Warranty and suffered a Storm Damage loss, then your insurers could repudiate the loss, despite the fact that the breach has had no effect on the claim.

If your policy contains a Condition precedent to Liability then insurers may only decline to pay a claim directly linked to your failure to comply with the Condition. For example, if the policy contains a Condition that a flat roof is to be inspected for defects on an annual basis and a Storm Damage loss occurred when the roof had not been checked then the claim could be declined.

Please contact us if there is anything unclear about the scope of your cover or your policy terms.

Wrongful Conversion v

Provides cover if you purchase a vehicle from someone who is not the true owner and the true owner subsequently makes a claim upon you for return of the vehicle or its cash value. Conversely, if you sell a vehicle and the purchaser finds that he does not have a valid title to the vehicle; cover is provided should he claim against you as the motor trader for its value.

Cover is subject to vehicles being cleared via approved agencies and usually excludes the first 20% of each and every claim.