Back charge

Amount owed by an insured (policyholder) on a current billing statement for premium due on insurance that has lapsed.

Back date

Issuance of an insurance policy for an individual or a group that is effective on a month, day, and year earlier than the date of actual issue so that the premium rate will be lower. State law usually limits backdating to not more than 6 months. Also called dating back .

Back Draft

The explosion or rapid burning of heated gases that occurs where oxygen is introduced into a building that has not been properly ventilated and has a depleted supply of oxygen due to fire.

Back load

Expenses deducted at the time benefits are paid out.

Back up

When water reverses directions and flows backwards through a sewer or drain.

Back up of sewers and drains

Condition in which water (possibly plus other materials) enters a premises through a drain or sewer because of blockage or super saturation. The water reverses direction and flows back towards the direction it came from.

Back Up Policy/Layer

An excess of loss layer that provides for further reinstatements of cover after the exhaustion of the automatic reinstatements of the original contract. The policy defines which basic contracts come within its scope and how many reinstatements they contain. Top and drop is a development of the back up layer, but the reinsured who relies upon it runs the risk that the top layer may have been exhausted by earlier calls upon it.

Back years

See: prior years.

Back-dating

Occurs when a policy is expressed as operating from a date before final agreement has been reached on its terms. Cover begins before the date cover is issued and will cover any losses in the intervening period. It is illegal to backdate compulsory motor insurance, but acceptable in life insurance where the insured may wish to date from his previous birthday or other specific date.

Back-loaded policy

Life insurance policy in which most of the expense charges occur when the policyholder gives up the policy or makes cash withdrawals from the policy. Generally, charges are highest in the beginning policy years and eliminated at the end of a certain number of years.