The neglect of a professional duty of care by a professional. It is a negligent act, error or omission that, if it causes a loss, will make the professional liable in law to a client or third party to whom duty is owed. (See Hedley Byrne v. Heller & Partners (1964)). See PROFESSIONAL INDEMNITY INSURANCE; VOLUNTARY ASSUMPTION OF THE RISK.

Cover in respect of professional sports teams is a standard exclusion in a personal accident catastrophe excess of loss reinsurance cover. The sums insured are high and there is an accumulation risk.

UK: A commission based upon a pre-defined formula intended as an incentive and reward. Examples are: (a) the commission received by an underwriting agent from the syndicate members at Lloyds as a reward for profits; (b) the commission received by a cedant from a reinsurer as a reward for the ceding of profitable business.
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REINSURANCE: A commission feature whereby the cedent is allowed a commission based on the profitability of the reinsurance contract after an allowance for the reinsurer’s expense and profit margin.
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A provision found in some reinsurance agreements that provides for profit sharing. Parties agree to a formula for calculating profit, an allowance for the reinsurer’s expenses, and the cedant’s share of such profit after expenses. See Adjustable Features, Risk Charge, and Experience Refund.
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UK: at Lloyd’s, remuneration received by an underwriting agent based on the results of a year’s underwriting (but see also contingent commission).
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REINSURANCE: Commission paid by a reinsurer to a ceding office under a proportional reinsurance treaty that is dependent upon the profitability of the total business ceded during each accounting period. Also used, in other arrangements, as any commission contingent on the claims experience.

Conditions in a compulsory insurance policy (motor and employers’ liability) that are prohibited for the purpose of the legislation (e.g. ‘things to be done after the event’ such as reporting the incident and not admitting liability).

1. Prohibits the continuation of work until specified improvements have been carried out. Notices are issued by HSE inspectors. Contravention of the order risks prosecution for the employer and/or company officers responsible. 2. An order by Opra banning an individual from being a trustee of one particular occupational pension scheme.

A technique whereby a major project is insured by the ECGD with reference to the viability of the project and its cashflow rather than by reference to the general financial strength or creditworthiness of the buyer or borrower. The foreseen earnings provide the essential security for the lender and the insurer.

A policy used with large construction projects. The principal effects a policy on the project as a whole to avoid the multiplicity of policies that occurs when each party arranges his own insurance. The policy applies to the more conventional material damage and liability policies (except employers’ liability and motor risks which are governed by legislation), but does not usually include professional indemnity risks.

Required by the Pension Scheme Surpluses (Valuation) Regulations 1987 and relates only to the calculation of the actuarial liability. The actuarial liability is based on service up to the valuation date and allows for projected earnings. Actuarial assumptions and methodology are prescribed in the regulations. Except in certain prescribed circumstances the longest period for eliminating any statutory surplus is five years.

Accrued benefits method used to calculate the actuarial liability for active members either as at the valuation date or as at the end of the control period, taking account of all types of decrement. The method allows for projected earnings up to the date of assumed retirement, date of leaving or death, as appropriate.

A word at the foot of a proposal form. The proposer agrees that the proposal and declaration shall be held to be promissory and shall be the basis of the contract. Although the proposal specifically makes the statements ‘promissory’, they do not necessarily constitute continuing warranties, making the contract voidable if contravened at any time during the policy period. The term emphasises that the proposal answers amount to express conditions (i.e. warranties in insurance parlance) as distinct from mere representations so that the replies are taken as statements of fact and not of intention. The expression may reinforce the fact that the completed proposal form and declaration form the basis of the contract.