A legal expenses insurance for professional fees (including those of a firm’s accountants) for representing the insured’s interests in the event of being subject to an in-depth investigation by the IR. Also covered are appeals against VAT assessments made by HM Customs and Excise. Cover includes personal protection for individual directors, partners and the self-employed where there is likely to be overlap of the investigation into the individual’s own affairs. Cover usually extends to include the cost of fees that may be incurred by the insured in dealing with PAYE Audit Investigations.

(PI) Claims-made cover protecting professionals’ against civil liability arising from a breach of professional duty subject to an annual aggregate limit. Insured’s own costs are covered in addition. The policy eliminates claims due to matters occurring before the retroactive date and occurrences and claims reported after expiry unless reported within an extended reporting period. Extensions include loss of documents cover. See PROFESSIONAL FEES LEGAL PROTECTION; PROFESSIONAL NEGLIGENCE; MEDICAL DEFENCE UNION.

The neglect of a professional duty of care by a professional. It is a negligent act, error or omission that, if it causes a loss, will make the professional liable in law to a client or third party to whom duty is owed. (See Hedley Byrne v. Heller & Partners (1964)). See PROFESSIONAL INDEMNITY INSURANCE; VOLUNTARY ASSUMPTION OF THE RISK.

Cover in respect of professional sports teams is a standard exclusion in a personal accident catastrophe excess of loss reinsurance cover. The sums insured are high and there is an accumulation risk.

UK: A commission based upon a pre-defined formula intended as an incentive and reward. Examples are: (a) the commission received by an underwriting agent from the syndicate members at Lloyds as a reward for profits; (b) the commission received by a cedant from a reinsurer as a reward for the ceding of profitable business.
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REINSURANCE: A commission feature whereby the cedent is allowed a commission based on the profitability of the reinsurance contract after an allowance for the reinsurer’s expense and profit margin.
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A provision found in some reinsurance agreements that provides for profit sharing. Parties agree to a formula for calculating profit, an allowance for the reinsurer’s expenses, and the cedant’s share of such profit after expenses. See Adjustable Features, Risk Charge, and Experience Refund.
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UK: at Lloyd’s, remuneration received by an underwriting agent based on the results of a year’s underwriting (but see also contingent commission).
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REINSURANCE: Commission paid by a reinsurer to a ceding office under a proportional reinsurance treaty that is dependent upon the profitability of the total business ceded during each accounting period. Also used, in other arrangements, as any commission contingent on the claims experience.

Conditions in a compulsory insurance policy (motor and employers’ liability) that are prohibited for the purpose of the legislation (e.g. ‘things to be done after the event’ such as reporting the incident and not admitting liability).

1. Prohibits the continuation of work until specified improvements have been carried out. Notices are issued by HSE inspectors. Contravention of the order risks prosecution for the employer and/or company officers responsible. 2. An order by Opra banning an individual from being a trustee of one particular occupational pension scheme.

A technique whereby a major project is insured by the ECGD with reference to the viability of the project and its cashflow rather than by reference to the general financial strength or creditworthiness of the buyer or borrower. The foreseen earnings provide the essential security for the lender and the insurer.

A policy used with large construction projects. The principal effects a policy on the project as a whole to avoid the multiplicity of policies that occurs when each party arranges his own insurance. The policy applies to the more conventional material damage and liability policies (except employers’ liability and motor risks which are governed by legislation), but does not usually include professional indemnity risks.

Required by the Pension Scheme Surpluses (Valuation) Regulations 1987 and relates only to the calculation of the actuarial liability. The actuarial liability is based on service up to the valuation date and allows for projected earnings. Actuarial assumptions and methodology are prescribed in the regulations. Except in certain prescribed circumstances the longest period for eliminating any statutory surplus is five years.