An agreement made between the owner of a business and a potential purchaser of that business. The agreement is made while the owner of the business is alive. In the event the owner becomes totally or permanently disabled and/or dies, the agreement goes into effect. This allows the owner to protect himself or herself against the risk of loss due to the inability to sell the firm for its full value.
Insurance Encyclopedia
Buy back
1. A payment to reinstate a contracted out person into the state second pension. 2. Reinstatement of life insurance cover after payment of a critical illness claim that would terminate the policy unless the death risk is bought back. 3. The payment of additional premium to secure cover in respect of a risk (e.g. motor cycling under a personal accident policy) specifically excluded from the cover.
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In the context of general insurance this refers to the purchase of cover in respect of an otherwise excluded peril by means of the payment of additional premium.
Buy Back Deductible
A deductible which may be eliminated for an additional premium in order to provide full coverage.
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Deductible under which the insured has the option, by paying an extra premium any time during the Policy period, to reduce the amount of a per-loss deductible applicable to any future insured losses.
Buy out (Section 32 policy)
The policy bought by pension scheme trustees to transfer an individual’s accrued benefits to a standalone insurance policy. Unlike a personal pension plan, the policy guarantees that if a transfer payment includes an element relating to contracting out of the state second pension, then a guaranteed minimum pension will be provided at retirement age. Also, unlike a personal pension plan, benefits in retirement from an s.32 policy are subject to maxima based on the limits laid down in the occupational pension scheme from which the entitlement was transferred.
Buy-back deductible
A deductible that may be eliminated for an additional premium in order to provide first-dollar coverage.
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A deductible that can be eliminated by the payment of an extra premium.
Buy-in
National program in which the state enters into an agreement with the Bureau of Health Insurance, which is under the Social Security Administration and obtains supplementary medical insurance benefits for eligible participants. The state pays the monthly health insurance premium on behalf of the beneficiary.
Buy-out settlement
See: financial settlement .
Buy-sell agreement
Contract made by partners of a business to buy the share of a disabled or deceased owner and which terms are established before the beginning of disability or death.
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(01) An agreement among part owners of a business which says that under stated conditions i.e., disability or death, the person withdrawing from the business or his heirs are legally obligated to sell their interest to the remaining part-owners and remaining part-owners are legally obligated to buy at a price fixed in the agreement. (02) A similar agreement between an owner or part-owner of a business and a non-owner such as a key employee.
Buy-sell agreement (Liability)
An agreement that states if a part-owner of a business wishes to sell, he or she must sell to the other part-owners or another person named in the agreement. The price of the part of the business is also named in the agreement.
Buyer’s Interest Insurance Clause, Marine Cargo, Contingent Cover
As in seller’s interest this too is a contingent cover. In protects only the interest of the buyer, following a loss or damage to the cargo insured, which as per terms of sale, he is not obliged to insured. In a shipment on FOB/C & F/FCA or other similar terms where the buyer is not responsive to insured the whole or part of the inland transit before FOB point. Under buyer’s interest he may still insured on contingent basis. This will not amount to double insurance and the existence of this insurance is not to be made known to the seller or his insurers. If a buyer has suffered a monetary loss (in case of advance payment) as a result of loss or damage before the “risk transfer point” and the seller or his insurers refuse to pay the claim, buyer can have recourse to this insurance. Subrogation applies. This insurance will operate as “Difference in Conditions” in case of CIF contracts where the seller is obliged to arrange insurance. If any claim is not recoverable under Seller‘s Insurance policy, due to restricted coverage/absence of coverage, the claim can be made under the buyer’s insurance clause.