FSA controlled functions covering: investment adviser; trainee investment adviser; corporate finance; pensions transfer; Lloyd’s adviser; customer trading; and investment management.

The FSA classifies customers as either retail or commercial customers. The former is defined as a policyholder or potential policyholder acting outside their trade, business or profession. The latter is someone who is not a retail customer. All businesses are commercial customers regardless of size. For the purpose of the rule on complaints the FSA uses the definition eligible complainants. This includes private individuals; commercial customers with a turnover below £1 million.; a charity with an annul income below £1 million; a trustee of a trust with a net asset value of less than £1 million.

An extension to a business interruption insurance that protects the insured against loss due to reduction in turnover after damage by an insured peril at a customer’s premises. The cover is expressed as a percentage of the gross profit based on the significance of the customer concerned.

Bonds are required by HM Customs and Excise to secure indemnities against loss through fraudulent or improper dealing with dutiable goods. The principal bonds include: 1. VAT/Duty Deferment Bond. Required from companies who import goods into the UK that are subject to VAT. The bond enables the company to defer payment of VAT or duty to the 15th day of the following month. 2. Warehouse bonds. Dutiable goods are held in bonded warehouses before they are required for sale and, provided they remain in the warehouse, duty is notpayable. When they leave the warehouse duty becomes payable and the bond secures HMCE against loss due to default.

Infringements of the regulations are excluded under the Institute of War and Strikes Clauses (4.1.5) and other versions. In Sunsport Shipping Ltd and Others v. Atkins and Others (2003) the term ‘customs regulations’ was held wide enough to include provisions having the force of law in the country concerned as to: (a) import or export duties or licences and (b) import or export of controlled drugs and other prohibited goods, substances or materials. The words cover any law in the realm of customs and so include smuggling of prohibited goods as well as smuggling of goods subject to duty. The law extends beyond duties on imports to include criminal law. The insured’s ship, upon which cocaine was discovered, was detained long enough (in excess of six months) for it to be deemed a constructive total loss within the policy. The Court of Appeal held that the exclusion applied and the insured’s claim therefore failed.

When a continuous contract is terminated under the cancelling clause, the existing risks under the treaty may run-off or simply become cut-off. Run-off means that the reinsurer’s liability under policies current at the cancellation date continues until each policy expires. Cut-off means that the reinsurer will not be liable for losses occurring on or after termination. The insurer usually returns the unearned premium portfolio unless the treaty is written on an earned premium basis. See CLEAN CUT BASIS.

Generic term for various types of legal liability arising from business use of the Internet and e-mail. See INTERNET LIABILITY.

Directors’ and Officers’ liability.

Industrial life clause, or ‘receipt clause’, allowing the office to pay a claim on death to the next of kin or beneficiary named in a will even though no grant of representation has been obtained. The sums are small and formalities kept to a minimum.

Fixed cash benefit payable under certain health policies for each day of care (institutional or otherwise) during the insured’s temporary illness.