Additional premium on an open cover applied to a cargo which is carried by a vessel over 15 years old or which is outside the scope of the classification clause. It may also be applied for breach of navigational warranties (Institute Warranties where the ship is over 15 years.

Insuring property for more than its actual value. It can be inadvertent or fraudulent. The penalties for under-insurance can cause the insured to over insure but the use of declaration policies enables insureds with fluctuating sums insured to overcome the problem.

A derivative, sold by a financial intermediary, tailored to particular risk financing needs rather than being exchangedtraded. I-Wex OTC Weather Risk Market allows ‘open access’ enabling a company to submit all details, barring price, of the weather risk they seek to hedge. Others search the database with a view to making offers.

Maximum amount of business a Lloyd’s member may write based on the member’s Funds at Lloyd’s (FAL). The limit is allocated to syndicates in proportions agreed between the member and the member’s agent.

the maximum amount of premium a member may accept for an underwriting year under the rules of Lloyd’s.

Marine insurance term in reference to a situation where certain goods are not discharged at the destination port but are ‘overcarried’ and dis charged on the homeward voyage. This amounts to deviation and the risk ceases when the vessel sails on from the port of destination still carrying the goods.

The acceptance by an underwriter of a larger amount than originally agreed with the broker.

A slip that is oversubscribed. The acceptances obtained by the broker exceed the amount of business available. It may be done intentionally by a broker seeking access to a wider market in the future. When it occurs the line written by each underwriter is reduced proportionately (short-closing).

An overdue ship. When a ship is overdue, the underwriter on risk may seek a reinsurance with other marine syndicates at a cost. Both the insurer and the reinsurer have access to the latest shipping intelligence provided by Lloyd’s.

Pension scheme with assets exceeding those required to meet liabilities. See ACTUARIAL SURPLUS.