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.