Non-proportional reinsurance layer of cover with an excess point so high that the layer will only be affected by rare catastrophic losses.

Options traded on the Chicago Board of Trade (CBOT) and the Bermuda Commodities Exchange (BCOE) the value of which is linked to the occurrence of defined losses caused by natural disasters.

A reserve created by an insurer as a safeguard against exceptionally poor claims experience. The reserve is created out of prudence and not in pursuance of regulatory requirements. The term is used colloquially.

A reinsurer swaps part of his portfolio, e.g. earthquake in Japan, with the Florida hurricane exposure of another reinsurer, each wishing to diversify his or her portfolio. The term also describes an arrangement between an insurer and an investor. The insurer agrees to make periodic payments to another party who agrees to make payments to the insurer if defined catastrophes occur, but there is no exchange of principal. See WEATHER SWAPS.

The immediate cause the last link in the chain, the nearest in time but not necessarily the nearest in efficiency. The nearest in efficiency is the proximate cause of a loss.
***
Same as Proximate Cause.

The fact or combination of facts giving rise to a right of legal action.
***
A statement in a lawsuit of a claim against the defendant. A multiple cause of action suit may seek damages for negligence, intentional infliction of emotional distress, negligent infliction of emotional distress, trespass, assault, battery, and breach of contract.

Common law rule meaning ‘let the buyer beware. The principle is that the buyer of goods had the opportunity to satisfy himself as to the suitability of the article and therefore no liability attaches to the vendor. However, the Sale of Goods Act 1979 provides a measure of ‘buyer’ protection and the Defective Premises Act 1972, s.3, abolishes caveat emptor in claims based on a vendor’s negligence in certain building work done pre-sale or preletting of property. Insurance contracts are subject to utmost good faith and not caveat emptor. The FSA calls upon the seller of financial products to give ‘best advice’.
***
In ordinary contracts the rule, “Caveat Emptor” (let the Buyer beware) prevails. That is, the seller is honest and does not deliberately misled the buyer and it is the responsibility of the buyer to examine, select and buy the goods; and in case of any defects of the goods purchased, the seller is not responsible.