Language that describes the coverage agreed upon by the parties, i.e., what is covered and when. The key components are thee: The indemnity aspect of the agreement, the type of business covered, and the method of determining whether a loss falls within the scope of the agreement. Also known as Cover Clause, Business Reinsured Clause and Application of Agreement Clause.
***
UK: The clause in a reinsurance contract that sets out the terms under which a claim can be made. It is the reinsurance equivalent of the operative clause.