A permanent contract that, after a waiting period, pays an income for so long as the policyholder is unable to work due to accident or illness up to a given age, usually retirement. The maximum benefit is circa 60 per cent of pre-disability income and may be level or index-linked. A proportionate benefit is paid to persons returning to work but forced to take lower paid jobs. Income protection cover is available for individuals and groups. Benefits can be immediate or deferred until a certain time has passed. See DEFERRED PERIOD.

Policy provision often included in life policies whereby the insurer agrees not to challenge the validity of a policy because of alleged misstatement by the insured after the policy has been in force for a stipulated period, usually two or three years.

Limited liability company operating as an underwriting member at Lloyd’s.

Standardised international trade contracts defining the obligations in a sale. These terms deal with expenditure, place (delivery) and time (when goods and transit risks pass from seller to buyer). See FOB, FOR, CIF, EXW.

An expense that is insured under a business interruption insurance. It is the additional expense necessarily and reasonably incurred for the sole purpose of reducing the shortfall in turnover during the indemnity period. For example, the business may have to rent alternative premises and/or pay overtime to make up for lost production. The insurer will not pay for increased costs in excess of the loss of the gross profit that the extra costs have served to avoid.
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Under a business interruption policy the occurrence of the event insured against may cause the insured to incur increases in his costs in endeavoring to maintain production. The insurance provides some cover in this respect.

Covers an excess amount over the insured value of the property, hull or cargo. The insurance stands alone for a separate agreed amount in excess of the agreed value and is written as a total loss only cover. In the case of cargo I/V covers increases in value during the currency of the underlying policy. Hull policies limit the amount of I/V cover in excess of the agreed hull value.

A life insurance term to describe an extra risk that increases with the passing of time, e.g. being overweight or chronic bronchitis.

the premiums and sum assured are increased by a predetermined proportion each year calculated on the original sum assured.

The total of paid and outstanding claims arising in a period. The term is also used, for the purpose of claims statistics, where, for given accident or policy years, the incurred claims are compared to earned premiums in order to assess the underwriting profitability for each class of business.

(1) in relation to the totality of an insurer’s general insurance business, or a given class of such business, the claims paid in a given year less the claims reserve at the beginning of the year plus the claims reserve at the end of the year; (2) in relation to a cohort of claims originating in a given policy year or accident year the amounts paid to date on settled or partly settled claims plus the reserve for open claims (that is, excluding the BNR element).
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(01 The losses paid or payable for claims covered by a policy or group of policies attributable to a specific coverage period provided by the policy or policies (02) Paid losses adjusted for changes in the loss reserve for a calendar or financial year period.