A conservative strategy used to limit financial loss by effecting a transaction that offsets the underlying position. A hedge correlates with the risk so a profit made on a futures or option contract mitigates the loss on an investment or activity. See WEATHER DERIVATIVES.

Restrictive endorsement in liability insurance operating as an exclusion or a warranty to regulate the height at which work may be undertaken. For example, a public liability policy may exclude work at heights in excess of 40 feet. Compulsory employers’ liability legislation does not prohibit the use of restrictive trade endorsements. As an alternative the policy may exclude work on particular types of buildings such as blast furnaces.

1. Cover granted by marine insurers under the ‘held covered’ clause to protect the insured in circumstances to which the policy does not otherwise apply such as when the vessel navigates in waters not permitted under the Institute Warranties. Cover is conditional upon the insured giving the insurer prompt notice and paying any reasonable additional premium. 2. Insurers may ‘hold covered’ pending completion of the formal arrangements.

(1) reinsurance with a large excess; (2) in the context of a reinsurance spiral, it means that the reinsurer is many steps away from the direct insurer.

A term in household contents policies, typically defined as: ‘jewellery, precious stones or articles made of gold, silver or other precious metals, clocks, watches, photographic equipment (not for commercial use), binoculars, telescopes and the like, musical instruments, antiques, curios and works of art, stamps and coin collections. They are high value/small bulk items attractive to thieves. The purpose of the definition is to assign to such property a separate sum insured, e.g. £5,000, as a sublimit of the overall contents figure and a single article limit, e.g. £1,500.

Highways Act 1959 transferred the duty to repair highways to the Secretary of State for the Environment or the appropriate local authority according to the road classification. Formerly, a local authority was not liable for injuries caused to highway users by its own non-feasance (e.g. non-repair of the surface) but this rule was abolished by the Highways (Miscellaneous Provisions) Act 1961). Previously there had been liability for misfeasance only.

Forcing a pilot to fly aircraft to an unscheduled destination. The normal aircraft ‘all risks’ policy excludes hijacking. Politically motivated hijacking and sabotage can be insured by a separate war risks policy. Hijacking of lorries has been a concern for goods-in-transit insurers but the risk is not excluded. ‘Carjacking’ is the same thing but applies when cars are forcibly taken from their drivers.
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Any unlawful seizure or wrongful exercise of control of the aircraft or crew in flight by any person or persons on board the aircraft.

Motor insurance clause protecting the interest of any hire purchase company that has financed the purchase of the insured’s vehicle. The clause may appear in other property policies.

A rigorous, coordinated approach to risk management within an organisation. The aim is to identify, prioritise, quantify, mitigate and finance risk from all sources that threaten the achievement of both strategic and financial objectives. The financial and ‘insurance’ risks are integrated in a single programme. Alternative terms enterprise risk management and financial risk management could be construed more narrowly.
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See: Enterprise-wide risk management.