An alternative term for professional indemnity but often used to refer to the ‘newer professions’, e.g. advertising agents, the media, etc. The term also describes the insurance effected by Lloyd’s underwriting agents as required by Lloyd’s.

Ensures that the reinsurer is not relieved of liability if the reinsured has inadvertently made an error or omission in supplying risk information to the reinsurer. Errors and omissions must be corrected as soon as possible. Some E & O clauses apply to errors and omissions by either party. The aim is to place the parties in the position that would have existed in the absence of the error or omission.
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A provision in reinsurance agreements that is intended to neutralize any change in liability or benefits as a result of an inadvertent error by either party.

A clause inserted into sliding scale treaties to permit the reinsurer to give notice of termination should a maximum rate become payable in any year and the cedant has the same facility if the minimum rate becomes payable in any year.

In the Lloyd’s annual solvency test on an open year of account, an estimate has to be made of the provision required by a syndicate to cover claims and other adjustments likely to arise from risks accepted during that year. The basis for calculation is laid down in the instructions for the guidance for auditors.

UK: an estimate of the monetary loss which could be sustained by insurers on a single risk as a result of a single fire or explosion considered by the underwriter to be within the realms of possibility (an expression used only in fire, explosion and material damage policies).
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An expression used in Fire, explosion and material damage policies only. An estimate of the monetary loss which could be sustained by insurers on a single risk as a result of a single fire or explosion considered by the underwriter to be within the realms of possibility.
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UK: Estimate of the maximum probable loss developing from an insured peril. It takes account of factors that will lessen the risk, e.g. fire protection, and factors that will increase the risk, e.g. combustible materials. It ignores coincidences such as all protective devices failing simultaneously with serious human error and other untoward circumstances. Insurers use EML (also called probable maximum loss) when fixing their retention on individual risks.

Retains Warsaw Convention and Hague Protocol systems but abolishes financial limits for passenger death/injury and obliges air carriers to make advance payments to alleviate economic need. It follows the IATA Agreements and seeks to harmonise the obligations of community air carriers regarding liability for accidents to passengers given that the Warsaw Convention applies only to international flights. All defences are waived for the first 100,000 SDRs of each claim but the defence under Article 21 (proof that all necessary measures to avoid the damage had been taken) of the Warsaw Convention and Hague Protocol of contributory negligence by the passenger is retained. The Regulation lays down minimum insurance requirements.

A risk is deemed to be located in an EU or EEA state if it is: (a) a building (and contents if insured under the same policy) situated in the Member State; (b) a motor vehicle, ship, yacht or aircraft registered in the Member State; (c) a travel policy not exceeding four months taken out in a Member State. For any other insured risk (including a life) it is an individual: (a) if the policyholder is habitually resident in the member state; (b) a business or organisation if the establishment to which the contract relates is situated in a Member State.

Standard form available throughout Europe in various languages. Its purpose is to get an agreed statement of facts when people are involved in road accidents to assist with the processing of any subsequent insurance claims.
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A form issued by Motor insurers in many European countries to their policyholders for use if an accident occurs. It is for completion and signature by the parties concerned on the spot so that the basic facts about the accident can be established at the outset.

Any person who is a resident of an EU Member State, or Norway, Iceland or Liechtenstein, who is involved in a UK road traffic accident involving a UK registered motor vehicle or trailer may now sue the vehicle’s insurer. The Insurer ‘shall be directly liable to the entitled party to the extent that he is liable to the insured person. This adds to any right he may have against the driver. ECRAIR gives effect to the 4th Motor Insurance Directive to harmonise the laws relating to civil liability in the use of motor vehicles. ECRAIR goes further than the Directive by giving the right of direct action to all UK residents involved in domestic road accidents.

An expanded single insurance market by combining the EC with the European Free Trade Area subject only to the exclusion of Switzerland. EFTA take part on the basis of all three generations of Insurance Directives. Switzerland takes part only in connection with the first two generations. This gives Switzerland access to the EC’s non-life market with EC insurers gaining reciprocal access to the Swiss non-life market.
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The member states of the European Union plus Norway, Iceland and Liechtenstein.