Glossary of Terms

We understand buying insurance can sometimes be a little bit complicated, that is why we have complied a definition list to help you with any insurance jargon. If you have any other queries, you can always get in touch with us and our helpful team of customer advisors will be able to help.

Additional interests

This is a party listed in an insurance policy that has an “interest” in being notified whenever a policy cancels or has a major change made to it. In other words, this party is simply being made aware of the change. For example, an additional interest on your home could be the bank which provided you with the mortgage.

All risk items

This provides cover for the loss or damage to items you normally wear or carry with you outside your home.

Building insurance

This type of insurance covers the actual structure of the building and any permanent fixtures and fittings.

Building sum insured

This is the amount to rebuild the property again, in the event that your property has been completely destroyed. This will also be the maximum amount of money your policy would be able to pay out in the event of a claim.

Claims

This is any Injury or loss to the insured arising so as to cause liability to the insurer under a policy it has issued.

Commercial legal protection

Otherwise known as Commercial Legal Expenses, is insurance for any legal costs or compensation awards arising from contract disputes, bodily injury, tax investigations from HM Revenue and customs. Please see our Legal Expenses section for further help and information.

Contents insurance

This covers the possessions in your property that are not fixtures and fittings, for example, things you could take with you if you moved.

Employers liability insurance

This type of insurance cover is compulsory for all employers in the UK and helps protect your business financially if an employee is injured or falls ill at work. You can be exempt if you are the sole employee of your limited company, and also own at least 50% of the share capital in the company.

Employers reference number (ERN)

Also known as employer PAYE reference. If you are an employer, your company will be required to register with HM Revenue and Customs, you will be given the unique ERN which is a set of letters and numbers which is used to identify your company.  You can usually find the ERN on any correspondence from HM Revenue and Customs i.e. on P45, P60, P11/D and most payslips. Visit HMRC for more information on how you can find this number:
It is now a legal requirement for Insurers to collect your ERN number due to legislation changes for purchasing employers’ liability insurance. This is so they can identity when an employee has worked at the company in the event of a claim.

Endorsments

The written document attached to an insurance policy which modifies the policy by changing the coverage under the terms of the contract.

ELTO

The Employers’ Liability Tracing Office (ELTO). ELTO service is a proactive measure introduced by the Insurance Industry to make it easier to search for Employers’ Liability (EL) insurance policies by using a central database. This is so the industry can meet its obligations to help those who have suffered injury or disease in the workplace by identifying the relevant insurer quickly and efficiently.  For more information please visit http://www.elto.org.uk/.

Excess

This is the amount of money you would have to pay if you made a claim on your policy.

Exclusions

This is a condition in a policy that excludes the insurer’s liability in certain circumstances or for specified types of loss.

Inception date

The date on which an insurance contract will comes into force.

Loss of rent

This is the amount if your property is uninhabitable as a result of an insured peril, such as a fire.

Material fact

Any fact which would influence the insurer in deciding whether to accept or decline an insurance risk. The proposer must disclose any material facts prior to inception date.

No claims bonus (Or discount)

A discount on the premium given to an insured person by an insurer where no claims have been made by that insured.

Non-disclosure

The failure by the insured to disclose a material fact or circumstance to the insurer before acceptance of the risk.

Peril

A harmful event which may be covered under a contract of insurance as an insured peril or excluded from it.

Policy

This is the document between you and your insurer, which details the terms and conditions applicable to an insurance contract.

Policy holder

The person who is insured under the contract of insurance.

Premium

The amount charged by an insurer for granting insurance cover to the insured.

Pre-existing medical conditions

You should tell your insurer about any illness, disease, injury, diagnosed psychological or psychiatric disorder you are currently suffering from, or have already had, even in the past.  These are known as pre existing medical conditions.

Products liability insurance

This covers the insured’s legal liability for any bodily injury to persons, or loss of or damage to property caused by defects in goods (including containers) sold, supplied, erected, installed, repaired, treated, manufactured, and/or tested by the insured.

Professional indemnity insurance

This policy protects a professional against their legal liability towards third parties for injury, loss, or damage, arising from their own professional negligence or that of their employees.

Proposal form

A standard form prepared by the insurer which contains a number of questions which  a person requiring insurance is required to answer to obtain sufficient information to allow the insurer to decide whether or not to accept a risk and what conditions to apply if it is accepted.

Public liability insurance

This type of insurance covers your business against the legal costs and compensation payments resulting from injuries or property damage to your clients, contractors or even members of the public which was caused by either you or one of your employees.

Quote

The statement by an insurer of the premium which will be required for a particular insurance.

Renewal

This is the process of continuing an insurance from one period of risk to a succeeding one.

Schedule

The document which forms part of your policy which includes information for that particular risk. It will contain information you have supplied to us.

Statement of fact

This is an alternative to a completed proposal form. It will be provided by the insurer clarifying the basis on which insurance is accepted and what conditions apply.

Subject to survey

This terminology is used by an insurer to indicate provisional acceptance of an insurance pending inspection by a surveyor whose report is necessary to determine the rate and conditions applicable.

Subsidence

This is the downward movement of a site on which a building stands. It is a concern for buildings as it means the buildings’ foundations is unstable.

Sum insured

This is the maximum amount payable in the event of a claim under contract of insurance.

Tenant improvement

This is any structural alterations or internal decorations made by the insured to the insured premises.

Terrorism cover

Terrorism insurance is insurance for property owners to cover their potential losses and liabilities that might happen due to any terrorist activities.

Warranty

These are any strict conditions in a policy imposed by an insurer. A breach of the warranty will mean the insurer may disclaim all liability under the policy.
*IMPORTANT:  Please note the information provided on this website is for general helpful information only. Please read your individual policy wording, schedule and other policy documents provided to you carefully.