Method of insuring ‘wages’ under a business interruption policy when not included in the full payroll in the gross profit item. The policyholder insures 100 per cent of his payroll for an initial limited period, e.g. 13 weeks, but only a percentage, e.g. 25 per cent, for the remainder of the indemnity period to retain key staff. On payment of an additional premium, the insured can ‘consolidate’, i.e. extend the initial period of full cover for a longer period with no cover thereafter.

Written in the Lloyd’s market, these reinsurance contracts contain elements of more than one type of risk (e.g. marine and nonmarine). The leading underwriter indicates on the slip the percentage split between the two classes.

Occurs when, following a pension sharing order, an exspouse, in receipt of a pension credit, becomes a member of the pension scheme in his or her own right alongside the member.

The process of investigation undertaken when one company is about to acquire another. It means thorough checks on a company’s financial performance and its liabilities, e.g. inadequately insured losses or risks, before a transaction is completed. Reports from solicitors, accountants and insurance brokers are a part of the process. Failure to exercise due diligence could expose directors and officers to claims insurable under directors’ and officers’ liability insurance.
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Proper care and attention. This term is commonly used to refer to the review of financial and legal documents in a merger or acquisition but is equally applicable to virtually any decision-making process, including whether to insure or self-insure, whether to form a captive insurance company, and a host of other risk management decisions.

A form that allows storage of information so that it is accessible for future reference, and allows information to be produced without changes. This includes paper, floppy disks, CD-ROMs, DVDs and hard drives where e-mails are stored. See DEMANDS AND NEEDS STATEMENTS.

Where an insurance is expressed to cover the period from one particular day to another, the insurance expires at midnight on the last day unless otherwise stated. However, a policy may not run its course for the following reasons: (a) payment of the full sum under the policy discharges it; (b) agreement between the parties; (c) termination by the insured in the case of permanent contracts (life and income protection), normally by non-payment of the premium; (d) withdrawal from contract during the cooling-off period; (e) determination for breach of condition or warranty.

Marine insurance term to denote the period during which the insurer will be liable under the policy. This may mean the duration of a voyage or the completion of a period of time depending on the type of policy concerned, voyage or time. A voyage policy on a hull continues until the ship has moored at anchor in good safety for 24 hours at the port of destination named in the policy but the policy may extend this period. In the case of goods the risk terminates when they are safely landed but this is usually extended by a transit clause. The contract may terminate early if the adventure is not commenced within a reasonable period of time (Marine Insurance Act 1906, s.42(1).