This glossary should include all the insurance related terms used on our website, please let us know if you spot something we have missed. The definitions are intended for general guidance.

Accidental damage

Accidental damage is an extension given on some insurance policies to cover unintended and unexpected damage caused by sudden and external means, other than the normally specified perils of fire, storm etc..  

These are usually exclusions relating to electrical breakdown moth other vermin etc..

Agreed value

The value of the insured items is agreed by you and the underwriters at the start of the period of insurance. This value then applies at the time of a claim.

All risks

All risks cover provides the broadest form of insurance cover. Subject to policy exclusions, any loss or damage is covered.

Buildings insurance

Buildings insurance covers the fabric of the structure usually including associated outbuildings, swimming pools, service pipes and cables, walls, gates and fences etc.

Business interruption insurance

Business interruption insurance provides cover for loss of income and or additional expenses incurred following damage to property which causes an interruption to normal trading.

Certificate of insurance

A document issued by insurers as evidence of insurance where cover is legally required. Certificates are issued with policies covering motor vehicles and employer’s liability.


A request from the policy holder for indemnity from the insurer under a policy.

Contents insurance

Contents insurance covers the items in your home or business premises that are not part of the main structure of the building, or permanently fixed to it.

Cover note

A cover note is a temporary certificate, usually valid for 30 days, issued pending the issue of a certificate.

Directors and officers (D&O) liability insurance

Directors and officers liability insurance provides indemnity to directors and officers arising from claims against them caused by a wrongful act.

Efficacy insurance

Efficacy insurance provides cover for claims arising out of a product’s failure to perform it’s intended function or task.

Employer’s liability insurance

Employer’s liability insurance covers the legal liability of the employer for claims arising from bodily injury or illness sustained by the employee during the course of their employment.


An endorsement is a clause or memorandum added to a policy embodying a change to the previous terms or cover.

Engineering insurance

Engineering insurance is cover for plant and equipment against damage caused by explosion, collapse and breakdown, and any resultant damage to property.

Engineering inspection

Various pieces of legislation require lifting equipment, pressure plant and presses to have a regular engineering inspection to ensure they are safe to use.


Excess is the amount for which the insured will be responsible following a loss and the insurer will only be liable to pay sums in excess of this amount.

Fidelity guarantee

A fidelity guarantee is a form of insurance that covers losses arising from the dishonest acts of employees.

Financial loss insurance

Financial loss insurance is an extension of cover under a public or products liability insurance to cover liability claims from purely financial losses even if there is no damage to persons or property.

General conditions/exceptions

General conditions and general exceptions are terms applied to the whole insurance policy.

Goods in transit

Good in transit generally covers goods moved within the UK, against loss or damage. See also Marine Transit.

Inception of insurance

The inception date is the day your insurance cover starts

Index linking

Index linking is an inflation proofing system where insurers link sums insured to various data sources e.g. RPI. Sadly not a guarantee that cover will always be correct. 

Legal expenses cover

Legal expenses cover is available to individuals and businesses to cover both the costs of defending actions against them and the costs of pursuing certain civil actions.  Included as an extension to many other policies although cover can sometimes be very limited compared to a separate contract.

Life insurance

Life insurance pays a specified sum on the death of the person whose life is insured. Policy types include Endowment, Term and Whole life.

Lloyd’s of London

Lloyd’s is a specialist insurance market and its members join together as syndicates to insure risks.

Loss adjuster

A loss adjuster is an independent claims expert engaged by an insurer to negotiate claims settlements on its behalf.

Loss assessor

A loss assessor is a claims expert engaged by the insured person to assist in presentation of a claim.

Loss of licence

Loss of licence provides an indemnity to individuals or businesses where a licence is required to trade, e.g, Public Houses.

Marine transit

Marine transit (also known as marine cargo) insurance covers the movement of goods from a location in one country, until its arrival in another. Cover can be from sender’s premises or the port of departure to the port of arrival or final destination.  The journey can be by land, sea, air, road, rail, inland waterway or a mixture of any of these.

Material fact

A material fact is a piece of information that would directly influence an insurer in assessing and setting the cover and terms they are willing to provide and the premium required.  Failure to divulge a material fact could void your policy. If you are in any doubt as to whether something constitutes a material fact, talk to us.

Motor Insurance Database (MID)

The Motor Insurance Database (MID) is an independently operated database of all insured vehicles in the UK. It is accessible by the police, and insurers are required to update the database with data on the vehicles they cover.

Motor fleet insurance

Motor fleet insurance covers all the vehicles owned by a business individual under one policy and can include cars, trucks, vans and motorcycles.  

New for old cover

New for old cover means you will receive a brand new 'like for like' replacement of your insured item in the event of a total loss claim.

No-claims bonus

A no-claims bonus is a premium discount given to reward policyholders for a number of years of claim-free driving. It is important to note it is a no-claim, not no-blame bonus, meaning if your insurer pays out for a loss and the outlay is not recoverable, then the bonus will be lost. It is often possible to protect against this for a small additional premium.

Occupier's liability insurance

Occupier’s liability insurance covers you as an occupier (irrespective of whether you own the property) because you carry a duty of care to ensure the safety of visitors to the property. You cannot use a notice to avoid this liability.

Permanent health insurance

Permanent health insurance provides income following illness or injury which prevents or reduces the insured person’s ability to work. After a waiting period, usually 6 months, payment continues until recovery or selected retirement age.

Personal accident cover

Personal accident cover provides income for a limited period, usually two years for temporary disability or a lump sum for a permanent disability following accidental injury.


A policy is written evidence of the contract between the insured and the insurer, outlining the terms, and conditions of cover.


The premium is amount paid for insurance cover.

Private health insurance

Private health insurance is cover for the cost of private medical treatment.

Product liability insurance

Product liability insurance provides cover for loss or damage to a third party or their property caused by a defect in the product sold, supplied, serviced or repaired by the insured.

Professional indemnity insurance

Professional insurance indemnity insurance, sometimes abbreviated to PI cover, protects you against third party claims for loss or damage caused by breach of professional duty.

Professional liability insurance

See Professional indemnity insurance

Property insurance

Insurance on property (buildings, contents etc.) against the risks of fire, storm, flood, theft, subsidence etc.

Proposal form

Generic form completed by those seeking insurance to provide relevant information to insurers to obtain a quotation. Many policies incorporate this information into the contract so important to get it right.

Public liability insurance

Public liability insurance covers claims for loss or damage to a third party, or their property, caused by the negligence of the insured.

Rebuild cost

Most property policies now provide covers for the cost of rebuilding your property as it stands. This is designed to counter the effects of inflation. This is not linked to the market sale value.


The point, generally a year after inception, where the insured is invited to extend or renew their policy for a further year. 


Settlement is the payment made to resolve a claim.

Settlement is also the term used to describe a small movement in a new building which may result in damage to decorations but is not subsidence.

Structural survey

A structural survey is a thorough examination of the property usually carried out by a qualified surveyor, who will report on any defects found.


Subsidence is damage to buildings caused by movement of the land on which they are situated. Cover usually incorporates heave as well which can occur in clay soils or where trees are removed.

Third party

In insurance the insured is the “first party”, the insurance company is the “second party” anyone else involved or affected is a “third party”.

Total loss

Total loss describes a situation where the repair cost versus the item's value renders repairs uneconomic, thus 'writing off' the property as a total loss.


Underwriting is the process of evaluating and pricing insurance risks. The term underwriter originated in Lloyds as the slip describing the risk was signed at the bottom by those providing the cover.

Uninsured losses

Some costs incurred following damage may not be covered due to a policy excess or they may fall outside the scope of the policy eg care hire, time off work etc. These losses may be recoverable from a third party if they were negligent.


Warranty is a policy condition that must be complied with to the letter, or cover may be invalid.

Wrongful act

Any actual or alleged breach of duty, trust, warranty or authority.