Insurance Jargon Buster Guide – Part 1

Let’s start within Insurance Jargon…

So, you start a business, start looking for insurance, speak to a lovely agent on the phone, accept their terms and through the letterbox drops your insurance agreement. You open the contract and start reading. Most make sense, but suddenly you see terms you have never heard of, and simply do not understand. It’s not your job to be an insurance expert, after all! This blog will outline 10 insurance jargon terms you may come across and do not understand.


A further premium payable by the insured as a result of the policy amendment, that may have increased the risk or changed the policy conditions or sum insured.


A temporary insurance document provided by the insurer or broker to the insured, confirming details of the cover that is in place before the actual policy documents are provided. In the case of Motor Insurance, it also acts as a temporary Certificate.


A policy wording that extends or restricts the cover provided or that requires compliance with stated conditions. Appears on a Policy Schedule.


The first portion of a loss or claim which is borne by the insured. An excess can be either voluntary to obtain a premium benefit or imposed for underwriting reasons.


A provision in a policy that excludes the insurer’s liability in certain circumstances or for specified types of loss.


For a contract of insurance to be valid the policyholder must have an interest in the insured item that is recognised at law whereby he benefits from its safety, well being or freedom from liability and would be prejudiced by its damage or the existence of liability. This is called the insurable interest and must exist at the time the policy is taken out and at the time of the loss.


Any fact which would influence the insurer in accepting or declining a risk or in fixing the premium or terms and conditions of the contract is material and must be disclosed by a proposer, or by the insurer to the insured.


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


A document issued by an insurer that forms part of the contract of insurance, and provides information including the period of insurance, the sections of the policy that apply and information relating to any applicable excesses/ endorsements.


Issued by an insurer or broker to a proposer in response to a request for a quotation, to provide the premium they are prepared to offer, any excesses that apply and assumptions that have been made and details of any significant exclusions/limitations or significant benefits.