A claims payment made by the insurer ‘as of favour’ even though there is no legal obligation to pay. Such payments are made to preserve goodwill or where the right to refuse payment is founded only on a technicality.
***
Latin for “from favour.” A payment by an insurer to an insured for which there is no liability under the contract. In some cases an insurer may feel that there has been a mistake or a misunderstanding, and he may pay a claim even though he does not appear to be liable. See Also: “Claims types of Ex-gratia Payment.”