Engineering policy providing contingency cover for a contractor’s liability to pay liquidated damages for any delay in completion or performance failure due to contractor or supplier error in regard to work under the construction agreement.

The risk that a product may fail to perform its intended function. The failure may cause physical injury or damage or a purely financial loss, e.g. loss of production time. The product liability policy does not pay to replace the product or guarantee its efficacy but liability for injury, or damage consequent upon inefficacy, is insured. Pure financial loss due to inefficacy can be insured under a financial loss extension of a product liability policy or under product guarantee policy. See EFFICACY AND LIQUIDATED DAMAGES INSURANCE.

Test of causation in negligence making the defendant liable for damage that is reasonably foreseeable even if unexpected. The defendant ‘takes his victim as he finds him. In Smith v. Leech Brain & Co. (1961) an employee suffered a burn on the lip when splashed by molten metal. Cancer ensued at the site of a burn because of a pre-cancerous condition. The defendants were liable under the rule as liability turned on foreseeability in regard to the type, not the extent, of the injury.

A rule of construction. If a specific phrase is followed by a general expression then the latter will be interpreted as meaning of the same kind as the specific words. If a policy refers to jewellery, plate, silver, gold or any articles’, the last three words mean ‘any articles of the same valuable kind as jewellery, plate, silver and gold’ and do not mean ‘any articles of any kind.

A periodic warming of the tropical Pacific ocean which affects weather around the world. El Niño results in increased rainfall in southern US and drought in the western Pacific. However, outside the tropical Pacific the effects are unpredictable and this boosts the weather derivatives market. El Niño (‘little boy’ in Spanish) occurs around Christmas.

A fire insurance policy clause excluding loss or damage to dynamos, motors or other electrical apparatus, caused by its own over running, self-heating, etc. These losses are incidental to the running of electrical apparatus but consequential fire damage to other property is covered.

Machinery, plant, motors, accessories and connections thereto powered electrically or mechanically and insurable by engineering insurers against: sudden and unforeseen damage; breakdown; explosion and collapse; accidental damage; and damage to surrounding property. Third party risks are generally covered under public liability insurance. Insurance on plant is usually coupled with in-service inspections, many of which are required by statute.

Perils of the elements, namely storm, earthquake, windstorm and flood.

Period of time during which potential members of a group life scheme may join without evidence of good health.