Term used in Practice Notes (IR12) to denote annual contributions payable to an occupational pension scheme by the employer on a common basis, e.g. a fixed amount or a fixed percentage of the payroll. Compare with special contributions.

Breakage (not associated with any named perils) of fragile cargo which is regarded as inevitable during transit. It is generally excluded unless caused by the vessel or craft being stranded, sunk, burnt or in collision. The Replacement Clause deals with breakage of machinery.

all long term, including life, business other than industrial business.

Rule of construction. Words in a policy must be construed in their plain, ordinary and popular meaning, and not in their strictly philosophic or scientific meaning. However, the context may make it clear that the words must, to carry out the intention of the parties, be understood in some special sense. Legal and technical terms are to be given their strict legal meaning unless the policy shows a different intention.

A broad form of cover with high attachment points for financial businesses such as banks. It covers liability for losses whether arising from professional services or not, unless excluded. The burden is on the insurer to show that an exclusion applies. The exposures include, inter alia, sales practices; anti-competitive practices/price fixing; discrimination; contractual interference; punitive and multiple damages (catastrophe basis); Internet liability. The basket of cover follows the operational risk insurance.

The insurance transacted between the primary insurer and the original insured in contrast to the insurance the primary insurer obtains from a reinsurer.

Reinsurance of life insurance at the same rate of premium and subject to the same conditions as those of the ceding office. The reinsurer is liable for a proportion of the original policy throughout its duration. In the event of surrender or alteration of the original policy, the reinsurer follows the practice of the ceding office and the conditions of the underlying policy. The reinsurer also follows the rate of bonus declared by the cedant under with profits policy.

A claims series clause term. The meaning has been interpreted in a number of ways but where a series of individual claims are unified by a common cause, that cause may be regarded as the originating cause. An insured may seek to rely on this provision to reduce the deductibles payable and reach the minimum level at which the insurers’ obligation to pay commences. A primary layer insurer may seek to aggregate multiple claims to limit its exposure to its retention level. A financial institution mis-sold pensions but was not allowed by the House of Lords to treat the poor training of their representatives as the common cause and could not therefore aggregate the losses to breach the £1m deductible. The poor training was background only; the real cause of the 22,000 losses (maximum was £35,000) was the failure of the representative to give best advice to each claimant individually.

any part of a life insurer’s assets which is not required for smoothing purposes or to pay terminal bonuses; sometimes referred to as ‘inherited estate’.

a syndicate which is unable to find another syndicate to accept an RITC premium at the three year point, and goes into run-off.