Historical incurred losses (usually excluding IBNR [incurred but not reported]) to an existing or proposed reinsurance agreement, divided by subject premium. The burning cost ratio, adjusted for IBNR, other costs, and a profit factor is a tool used in making rates for excess of loss reinsurance.
Insurance Encyclopedia
Burning cost ratio (Reinsurance)
The ratio of losses that an insurer has to cover by contract to premium income. In an excess of loss or catastrophe loss reinsurance policy, premium income is defined as gross premium minus reinsurance expenses. For stop loss reinsurance policies, premium income is defined as earned premium income.
Burning of debris condition
A liability insurance condition to ensure that the burning of debris away from the insured’s premises is properly conducted. Fires should (a) be in a cleared area and at a distance (e.g. at least 8 metres) from any property; (b) not be left unattended. A suitable fire extinguisher should be kept available for immediate use. It may also require that fires be extinguished at least one hour before leaving the site at the end of each working day.
Burning Ratio
(i) Ratio of losses suffered to the amount of insurance in effect. (ii) Ratio of actual Fire loss to the total value of the property that could burn. (iii) Ratio of loss by Fire to Fire Insurance in force.
***
The amount of losses suffered as compared to the amount of insurance in effect.
***
UK: The ratio of actual losses (i.e. excluding IBNR) to the amount of earned premiums.
***
The ratio of losses to the amount insured.
Burning warranty/Hot Work/Use of Heat Clause
Public liability clause imposing strict conditions on the insured’s involvement in ‘hot work. Typically where electric oxy-acetylene or similar welding equipment or cutting equipment is used the area of work must be adequately cleared and combustible materials moved at least 6 metres from the work. The warranty also requires, inter alia, that fire extinguishers should be available. Upon completion of each period of work and at regular intervals for at least one hour after the completion of the work there should be thorough fire safety checks. Other conditions govern the use of blowlamps and blowtorches. The use of asphalt, bitumen, tar, pitch or lead heaters is also controlled. See HOT WORK; BURNING OF DEBRIS CONDITION.
Burnout
Occupational illness in which there is mental or physical energy depletion after a period of chronic, unrelieved, job-related stress. It is characterized sometimes by physical illness, perception of being tired, and being disgruntled with one’s work.
Burns
See: rule of nines .
Burst pipes
An additional peril added to fire and household policies to cover damage caused by an escape of water from any tank, apparatus or pipe. The repair of the item that burst, overflowed or leaked, is not covered. The insurance is subject to an excess and cover is usually suspended when the building is unoccupied for a defined period, usually 30 days.
Business
1. The term means the insured’s activities as specified in the policy Schedule and will depend on details submitted by the insured. ities outside the description will not be covered. The policy extends the definition to include ancillary activities. 2. For the purposes of the Employers’ Liability (Compulsory Insurance) Act 1969, ‘business’ means a trade or profession or any activity conducted by a body of persons (whether incorporated or not). Certain activities not normally regarded as businesses (e.g. members’ tennis clubs) are within the definition. Domestic ‘servants’ in private households are not employed in a business for the purpose of the Act.
***
The volume of premium written.
Business and personal property coverage form (Property Insurance)
Coverage for buildings and property contained within them.