Means average as applied to a policy subject to the reinstatement clause. Average will not apply if the sum insured is equal to 85 cent or more of the value at risk at per the time of reinstatement. The sum insured should therefore allow for the period of insurance plus the time estimated for rebuilding. Losses settled on an indemnity basis remain subject to normal pro rata average.

An insured may be obliged to reinstate by statute or by contract under certain provisions in the Trustee Act 1925, s.20(4), or the Law of Property Act 1925 s. 108 (3).

Computer insurance indemnifying the insured in respect of the cost of reinstating data contained in the data-carrying material following accidental erasure, accidental failure of the public electricity supply when exceeding 30 minutes, and the insured being denied access to the premises or use of the computer because of loss/damage to other property in the vicinity. Other losses can be added to the cover.

Reinsurance treaty provision enabling the reinsured to purchase, at inception, automatic restoration of full policy limit after a claim. It removes the uncertainty associated with negotiating the premium after a loss has occurred.

Clause that distinguishes a reinsurance policy from an underlying marine insurance. The concluding words of the clause are ‘to pay as may be paid thereon’ meaning that the reinsurer is liable only for losses actually covered by his policy regardless of claims paid on the original policy. Many reinsurances are more restricted than the original policy and the clause must then be qualified by terms such as ‘but against Total Loss only.

An allowance expressed as a percentage of the reinsurance premium made by the reinsurer for all or part of the cedant’s acquisition and other costs. The commission may include a profit factor for the cedant. See OVERRIDING COMMISSION; PROFIT COMMISSION; MARINE REINSURANCE COMMISSION.

the insurance of the risks assumed by or potential losses of another insurer (the direct insurer) whereby the latter covers a proportion of the risks assumed or the eventuality of atypically large losses (see also retrocession).

a group of reinsurers who agree to share certain types of business in specified proportions (such a pool is sometimes operated by way of cession and retrocession).
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A multi-reinsurer agreement under which each reinsurer in the group or pool assumes a specified portion of each risk ceded to the pool. Contrast with Reinsurance wheel.