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

The transfer of a group of members from one occupational pension scheme to another. A transfer payment is made to the new scheme based on the transfer of assets and liabilities. The transfer may occur when members of a closed final salary scheme are given the chance to join a new money purchase scheme. More usually it occurs when the business changes ownership. The consent of the members is required as they could opt for a pension transfer to a personal pension, a section 32 policy or no transfer at all. The transfer payment usually exceeds the individual’s cash equivalent transfer value.

The onus is upon the insured to prove that his loss is within the operative clause. It is for the insurer to prove that the loss has been caused by an excepted peril. If the insurer has cut down the scope of the operative clause by qualifying the insured peril (see QUALIFIED PERILS) the insured must prove that the loss was caused by the peril as qualified.