A clause in a contract of insurance that gives the parties the right to terminate coverage offered in a contract under specified conditions.
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A clause in an insurance contract which permits an insurer and/or an insured to cancel the contract before it is due to expire. The clause may provide for a return of premium in respect of the unused portion of the policy.
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UK: 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. See CANCELLING CLAUSE.