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.

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.

The period of previous service in employment with which a new member of a company pension scheme can be credited.

A combination of an annuity and whole life policy on the same life whereby a single payment purchases the annuity, the instalments from which pay the whole life premiums. The annuity purchase reduces the purchaser’s estate, but the life policy proceeds paid on death are tax-free and replace the initial single payment. Life premiums payable out of normal income are an exempt transfer and therefore exempt from inheritance tax.

Occurs where the terms and conditions of a primary insurance policy match those of its counterpart reinsurance policy. There is a presumption that facultative reinsurance is back-to-back with the original insurance (Vesta v. Butchers and Others). It is also presumed that proportional reinsurances are back-to-back with the insurance policies, but this is not true of excess of loss treaties. Where by express terms the risk presented to the reinsurer is materially different from that assumed by the reinsured, there is no presumption of back-to-back cover (Gan Insurance and Another v. Tai Ping).

All risks’ cover on personal effects and luggage generally insured under travel insurance policies.
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Covers personal accompanied baggage of the insured and/or his family members travelling with him against the risks of their baggage being lost, destroyed or damaged by accident, Fire or theft.

Guarantees the appearance of a person in court enabling them to be released on bail. If the person fails to appear, the ‘bondsman’ of the bond to the court. Spain requires visiting motorists to provide bail bonds from their insurers as a means of ensuring that funds will be available to meet any damages payable after road accidents.
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Refer: “Bond, Bail Bond.”

Provides members of P & I Clubs with the backing needed to secure bail when their vessels are in rem for a tortious or contractual liability leading to a maritime or statutory lien over the vessel. The club’s letter of undertaking secures the release of the vessel long before a court could rule on the case, thus enabling the released vessel to trade.

One who has possession of another’s property under contract of bailment or agreement. A bailee for reward receives payment (e.g. garage owner for repairing a car) and must use the care that a prudent man would use over his own goods. Where there is no common benefit the person in possession is a gratuitous bailee who must exercise the care that a vigilant person would over his own goods. Bailees for reward may seek to exempt themselves or limit their liability. See UNFAIR CONTRACT TERMS ACT 1997.
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One who is charged with the care of the property of another. For example, a garage is the bailee of a customer’s (bailor’s) car (the bailment) and a jeweler is a bailee of customers’ jewelry while in its possession for repair or appraisal.
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One who has the custody of the property of another. Bailee “for hire” have certain responsibilities to care for the property of others that is in their custody.
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A person who holds the property of another person (the bailor) under a contract or agreement according to which the property held is to be returned to the bailor or delivered somewhere to his order. A bailee for reward is paid for his services.
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A person or concern having possession of property committed in trust from the owner.