Often an extension in household policies covers the insured and his family in respect of legal expenses involved in taking or defending legal action in a range of civil disputes (personal injury/personal goods; consumer protection; residential; employment; tax) up to £50,000. Defending certain criminal proceedings, e.g. motoring offences, may also be covered. Motoring prosecutions are also covered under motor legal expenses policies.

Part I imposes strict liability on producers (manufacturers, raw material suppliers, importers being first importers into the EC, ‘own branders’ and ‘forgetful suppliers’, e.g. a retailer who fails to supply the identity of the producer) for defective goods that cause personal injury and damage to private property over £275. Section 4 sets out six defences to strict liability, notably the ‘state of the art’ defence. Part II has been largely superseded by the General Product Safety Regulations 1994 under which safety is assessed by factors such as relevant British or European standards. A breach is a criminal offence; product liability insurance covers prosecution defence costs.

A sale when the person buying ‘deals as a consumer’ with a business. Exclusion clauses of the implied terms of fitness for purpose and satisfactory quality are not permitted (Unfair Contract Terms Act 1977). The Unfair Contract Terms Act 1977, s.12: a person deals as a consumer if (a) he neither makes the contract in the course of business nor holds himself out as doing so; and (b) the other party makes the contract in the course of business; and (c) the goods are of a type ordinarily supplied for private use or consumption.

Rectangular metal boxes used to transport cargo between two or more modes of transit, i.e. road vehicle, train, vessel or aircraft. The containers themselves are insured under the Institute Container Clauses.

Land appearing to the local authority to be ‘in such a condition, by reasons of substances in, or under the land, that significant harm is being caused or there is a significant possibility of such harm being caused’ (Environment Act 1995, s.57). See POLLUTER PAYS PRINCIPLE.

A household contents policy covers such items as furniture, furnishings, household goods, personal effects, high-risk items, business equipment and money owned by the insured or any member of his family or for which he is responsible. In terms of commercial policies, contents include plant, machinery, equipment, stock, tenant’s fixtures and fittings all contained in the premises.

A scale of benefits under a personal accident policy as an alternative to fixed sum benefits. A maximum amount is fixed for payment on death but all other benefits for dismemberment and other forms of disablement are expressed as varying percentages of the death benefit.
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A scale of benefits payable under personal accident and sickness Insurance.

A reserve fund set aside by an insurer or other entity as a safeguard against heavy and unexpected losses that could not be covered out of other funds.
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Monies put aside by a Company in order to pay for unexpected losses.

A term describing those policies that do not fall naturally into one of the principal classes of insurance business. The term embraces insurances such as abandonment of events, pluvius insurance and others often of an unusual nature.

An allowance in the insurer’s premium calculation for possible fluctuations in claims costs. It is added to the risk premium that covers the average claims’ cost for the year. Wide fluctuations in claims experience necessitate a greater contingency cushion than narrow range fluctuations. Other premium computation elements: expenses loading and profit loading.
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The part of the Insurance premium used to cover the possibility of unexpectedly large or frequent losses having to be paid by the Insurer.