A variation of ordifacultative reinsurance nary method, whereby a reinsurer agrees in advance to accept reinsurance from a reinsurance broker. The reinsurer becomes obliged to accept a share of any business ceded to it through the broker, who thus acquires a facility for automatic reinsurance.

UK: 1. The commission and fee income received by an insurance broker. Normally commission is received from the insurer, but brokers may also charge fees to their clients. 2. A US term for an insurance broking company, firm or office. 3. The fee paid to a broker who arranges reinsurance cover for a ceding office.
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The business of a broker. Also, the fee/commission paid to a broker who arranges Insurance.
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UK: the commission received by a broker or other intermediary for placing insurance risks.
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The commission that is payable to a broker for placing an insurance or reinsurance contract with an insurer or a reinsurer. Compare fee for service. Although brokerage is payable by the insured as part of the gross premium the amount of brokerage is agreed by the insurer. The insured may request his broker to state the amount of his brokerage on a given placement. Similar considerations apply to reassureds under reinsurances. Sometimes the term brokerage may be used to refer the business of a broker.
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The sum paid to a broker as a commission. This term can also refer to insurance placed with brokers.

A stratum of cover between the upper limit of the primary insurer and the attachment point of the excess or umbrella insurer. The ‘buffer layer’ fills the gap. Example: total policy limit of £10 million is arranged as follows: primary layer = £1 million; buffer layer is £1 million in excess of £1 million and the excess/umbrella layer is £8 million in excess of £2 million. In reinsurance terms the buffer layer sits between the working cover/layer and the catastrophe layer. It absorbs relatively large losses that do not occur annually, but do so with some regularity.
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The buffer layer is the layer of insurance that resides between the primary layer and the excess layer. For example, suppose Marcia wants to purchase a business umbrella liability, but she is required to carry underlying comprehensive general liability limits of at least $500,000. Marcia has only $300,000 liability coverage and her current insurance company will not increase the primary coverage. Marcia either faces a $200,000 gap in coverage or purchases a $200,000 “buffer.”

Policy covering a ship during construction, including launching and trial trips, until delivery to her owners. Construction of small commercial craft, e.g. fishing vessels, work boats, etc., can be insured under an open cover.

Fire insurances are often rated separately for the buildings and contents. The terms ‘building rate’ and ‘contents rate’ have emerged as a result.
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A Fire Insurance term which refers to the rates as buildings rather than as the contents of the building. Refer: “Contents rate.”

UK’s leading centre of expertise on building construction, energy, environment, fire and risk. It provides consultancy, testing and commissioned research services covering all aspects of the built environment and associated industries. BRE makes significant contributions to the development of national and international standards and codes for construction and fire safety. Its sister company, BRE Certification, provides certification to UK, European and international standards as well as CE marking and product approval. (www.bre.co.uk).

A block or master policy under which a large number of buildings, mainly private dwellings, are insured on a ‘householders’ comprehensive’ basis. The buildings insured at any one time are those listed in a schedule maintained by the society. Individual property owners are not given a policy but are supplied with full details of the cover. The insurance is index-linked.

Where a mortgagee grants a high loan in relation to value (e.g. in excess of 75 per cent of property price) the mortgagee insures the excess against loss due to borrower default. The premium, known as the ‘high value to loan’ fee or indemnity guarantee premium, is passed on to the borrower.

An alternative to a conventional ‘with profits’ policy. The investment element of the premium is concentrated in designated building society investments.

1. In household policies it is the home (the dwelling, outbuildings and garage), fixtures and fittings, patios, terraces, footpaths, tennis courts, drives, walls, swimming pools, fences, gates, hedges, service tanks, pipes, permanently connected cables and central heating oil tanks, within the boundaries of the home. Trees and plants are not included unless the policy has been extended to cover damage to garden. 2. Under the standard fire policy used by businesses, buildings are defined as: buildings including the landlord’s fixtures and fittings therein and thereon, unless otherwise stated constructed of brick stone or concrete and roofed with slates tiles metal concrete asphalt or sheets or slabs composed entirely of mineral ingredients. Unless specifically insured, Buildings includes annexes, small outside buildings, conveyors, wires, service pipes and other equipment that is the property of the insured (or for which he responsible), walls and gates and fences. incombustible