Policy effected by a seller of cargo to protect his contingency interest in the event that the buyer’s policy fails to respond to a loss. See QUANTUM OF INTEREST.

Treaty under which only one of the parties has an obligation. The cedant may be obliged to offer all risks of the given class but the reinsurer will not be bound to accept them (obligatory-facultative). Conversely, the reinsurer may obliged to accept all risks that the cedant chooses to offer (facultative-obligatory).

A captive insurer that has developed into a normal insurer taking risks from the market generally.

Occurs when sound cargo is sold at a reduced price because of an unfavourable association with goods, part of the same cargo (e.g. tea), damaged by an insured peril. The ‘sentimental’ loss on the sound goods is uninsured.
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The loss of property which has favorable associations (e.g., an engagement ring) may cause suffering disproportionate to the monetary value of the object lost. Conversely property with unfavorable associations (e.g., cargo which, though undamaged, has been involved in a shipwreck) may lose value as a result of such associations. Insurances are considered not to cover sentimental losses.

The value that a person attaches to property based on feelings of emotion and affection not monetary values. Such values cannot be expressed in financial terms and cannot therefore be insured.

Clause reading ‘All pollution or contamination which arises out of one Event shall be deemed to have occurred on the date that the insured first becomes aware of the circumstances which have given or may give rise to Pollution or Contamination. The clause was intended to bring gradual pollution into public liability policies, but the restricted reinsurance market meant little take up. See POLLUTION CLAUSE.

Replaced by the Second State Pension (S2P) in 2002 as the earnings-related part of the statement retirement scheme. Rights built up under SERPS are protected.

A life insurance/personal accident underwriting term for the higher risk of accidental death of members of the armed forces.

Overseas (re)insurance business that is transacted in the UK. This cross-frontier business contributes significantly to the UK’s balance of payments. In the EC it is the right of an insurer to sell insurance cross border into other Member States. It does not apply to business accepted under full binding authorities held by coverholders in the Member State where the risk is located.
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See: freedom of services.

Clause in a fire policy on buildings in respect of the cover provided on items such as telephones, gas, water pipes and cabling which are partly outside the building. The cover is ‘accidental damage’ and applies to property belonging to the insured or that for which he is responsible.