A type of loss that combines high probability with low impact, the predictable nature of which means that it can usually be assumed and managed, e.g. shoplifting, minor mechanical breakdowns.

Cargo damaged by fresh water without the operation of a maritime peril. This risk, together with other extraneous risks such as damage by other cargo, hooks, oils and sweat may added to the policy when governed by Institute Cargo Clause (B) or (C). Clause (A), ‘all risks, is already wide enough to embrace the risk. The freshwater loss/damage must be fortuitous, happening by reason of some external cause.

Otherwise known as ‘collecting societies’ they are like industrial life companies but owned and operated for the benefit of its members. They are authorised to transact industrial life assurance as defined in the Industrial Assurance Act 1923. Friendly societies started as local organisations, distributing benefits to sick and bereaved members. They have to be registered under the Friendly Societies Act 1974 and are subject to the supervision of the FSA.

(1) an unincorporated association set up under the provisions of the Friendly Societies Act 1974, or similar earlier legislation, and carrying on certain types of insurance business allowed by that Act; (2) an incorporated society set up under the provisions of the Friendly Societies Act 1992 and allowed to carry on a wider range of insurance and other financial activities than is permitted under the 1974 and earlier legislation.
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A mutual society established for the relief or maintenance of its members or their relatives during sickness or othr infirmity or in old age or widowhood or for life assurance and certain other purposes.

An insurance company not regarded as one of the ‘majors’ by whom or for whom business is written in one of the underwriting rooms near Lloyd’s.

An act ‘for one’s own purposes. It describes circumstances when an employer is not vicariously liable for the tort of his employee because the latter was not acting in the course of employment as he was ‘on a frolic of his own’, i.e. engaged in an activity on his own account. In Hilton v. Thomas Burton (Rhodes) Ltd (1961) demolition workers left work in the employer’s van to go to a cafe. The driver, an employee of the defendants, was negligent and the foreman was killed. The defendants were not liable as the men were on a ‘frolic of their own’.

When a ship is insured ‘from’ the port of departure, the insurance commences when she breaks ground intending to proceed on her voyage.

REINSURANCE “Arrangements by which an insurer, for a specified fee or premium, issues its policies to cover certain risks underwritten or otherwise managed by another insurer or reinsurer. The insurer then transfers all, or substantially all, of the liabilities thereunder to such insurers by means of reinsurance.
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UK: an arrangement whereby one insurer agrees to accept business on behalf of others, or to cede the business to others; such an arrangement may be used in markets where the fronting company is well established and finds it easier to obtain business than the companies for which it agrees to front, or to conceal the identity of the company to which the business is being channelled.”
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“Often the entities an insured does business with want a policy written by a major carrier with an acceptable rating with Best’s or another insurance rating service. If the insured is using a captive, this can present a problem.Many insurance companies will “”front”” for the captive. That is, the policy is written on the company’s paper, but the company reinsures the majority of the risk with the captive.

For example, a commercial developer may want a building contractor to provide liability insurance with an A++ rated insurance company before building a new 10-story office building. If the contractor is covered by a captive, he or she pays a fee to an A++ company who then issues the liability policy. The fee covers, other than just expenses, the risk that the rated company will not be able to collect from the captive in the event of a loss.”
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UK: The issue of a policy by an authorised insurer who cedes 100 per cent (or nearly that amount) to a second insurer or a reinsurer who is not an admitted insurer in the state concerned. The authorised insurer ‘fronts’ the risk for a specified fee or premium.
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The practice, in reinsurance, of the ceding company retaining only a small portion of a risk and ceding the remainder to a reinsurer.

Marine war risks cargo insurance clause stating that there is no loss because of the termination (or frustration) of the transit due to an outbreak of hostilities. The property is not irretrievably lost but is prevented from reaching its destination. There must be actual physical loss/damage to the cargo to constitute an insured loss.
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A marine Policy clause which excludes claims based on frustration of the adventure by the operation of war perils.