Glossary of Cover

Provides the broadest form of property damage cover caused by a peril, such as, a fire or storm. Such policies do not list the perils insured but list the exclusions only. Therefore, any unnamed perils are automatically covered by not being excluded.

Covers the fabric of the building and the cost of damage to the building. The fabric of the building includes the roof, walls, ceilings, floors, doors and windows of the building. Outbuildings, such as, garages, fences and other walls are also included.

Reimburses the insured for lost profit during the period that the insured’s business is closed whilst their premises are restored due to property damage from a named peril, such as, a fire. Cover can also include lost profit whilst their premises are closed due to a disease. Also provides cover for financial loss that may occur if a civil authority limits access to an area after an incident and their actions prevent customers from reaching the insured’s premises.

The minimum statutory level of cover under UK law provides cover in respect of legal liability to pay damages arising out of injury or death caused to any party by use of a motor vehicle and is known as a Road Traffic Act Only policy. A Third Party Only policy provides Act Only cover plus legal liability for damages to other persons property, whist a Third Party, Fire & Theft policy provides Third Party Only cover plus fire and/or theft only to an insured’s motor vehicle. The widest form of cover is a Comprehensive policy and provides Third Party Fire & Theft cover plus any other accidental or malicious damage, passenger liability, personal accident benefits, loss of personal effects and medical expenses cover and can also be extended to include various other areas of cover, for example, loss of use of a motor vehicle.

Business Contents policies cover such items as office equipment including computers, photocopiers and other electronic equipment alongside furniture. Home Contents policies cover such items as clothes, appliances, furniture, fine art, jewellery and watches and other valuables. In both cases, cover provides protection against named perils, such as, theft and damage where such items are not fitted to the main structure of the building. In other words, if the building was turned upside down, anything that fell out would be classed as contents.

There are many types of bonds. For example, a performance bond is a form of security provided by the insured, that is, a contractor to a third party and consists of an undertaking by the insurer to make a payment to the third party where the insured has defaulted under a contract. A maintenance bond protects a contractor and property owner from financial liability due to defects found at the completion of a project. A retention bond is a form of security issued in lieu of monies held against the insured.

Cover can be provided on either a specific contract basis or via an annual basis covering all contracts. The completion date of a contract could be delayed or prolonged following damage to, for example, a new building being constructed. This type of policy provides compensation to a contractor in the event of there being damage to the construction works during the contract period from a wide range of perils. Cover can also include Hired In Plant and Owned Plant (see Hired In Plant and Owned Plant within this Glossary). 

The same as Directors and Officers insurance (see Directors and Officers and Management Liability Portfolio within this Glossary) but provides cover for the company as a corporate legal entity.

Covers losses resulting from dishonesty, fraud and theft entrusted by an employee with company assets (see Management Liability Portfolio within this Glossary).

Also known as Data Protection insurance and provides cover against acts of fraud, data theft, social engineering where criminals attempt to fool an insured with parting with money, information and/or both. Also provides cover where a data breach occurs and sensitive information is accidentally shared. 

Covers directors and officers of the insured for negligent acts and for misleading statements that result in legal actions or suits against the insured (see Corporate Legal Liability and Management Liability Portfolio within this Glossary).

A statutory requirement under UK law. Provides cover for the insured in the event of bodily injury to the insured’s employees or labour only sub-contractors due to the negligence of the insured.

Covers the insured against employment claims bought by a past, present or prospective employee alleging any wrongful employment practice including discrimination and harassment based upon age, gender, sexual orientation, political and religious belief etc. (see Management Liability Portfolio within this Glossary).

Covers sudden and accidental damage, malfunction or breakdown to plant and machinery, for example, boilers, generators and other equipment including lifting equipment, such as, air conditioning, electrical or heating units and computer systems. Also provides cover for any statutory inspections of plant and machinery.

Provides cover against legal claims alleging negligence against a third party for work undertaken. Also known as Professional Indemnity insurance (see Professional Indemnity within this Glossary).

Protects the insured against loss of their assets including money caused by acts of dishonesty, fraud and theft by their employees.

Provides protection against claims arising from financial loss caused to clients, such as, an accounting error that leads to a financial loss to a client.

Similar to an “All Risks” policy but provides cover limited to certain perils, ie, damage caused by fire, lightning, earthquake and aircraft.

Covers property against damage or loss whilst in transit or stored during a journey.

Covers damage, theft and liability to the owner of equipment, plant and machinery hired by the insured (see Contractors All Risks/Contract Works within this Glossary).

A guarantee providing cover for the full contract value for repairs or replacements of the installation undertaken by the insured in the event that the insured has ceased to trade for financial reasons, such as, insolvency, liquidation or bankruptcy.

A Joint Names policy provides cover within a construction contract where both the property owner and the contractor are named on a policy. Other parties, such as, lenders may also wish to be included.

The key features and benefits are a) the insured parties are unable to claim against one another in respect of an insured loss, as they are considered to be one-and-the-same for the purposes of the insurance, b) neither party needs to take out its own insurance (which would lead to dual insurance if they do) and which unnecessarily increases the total insurance cost, c) Joint Names policies avoid or prevent costly litigation costs as the insured parties would not be able to claim against each other and the policy cannot be cancelled without both parties being aware or agreeing, d) the insurer has no rights of subrogation which means that they cannot recover amounts paid to one of the insureds by pursuing the other, e) such contracts are applicable where renovation and extension works are involved where both the existing structure and the works are required to be protected, f) the property owner is entitled to the proceeds of a claim made under the policy which they would not be entitled to if the works cover were in the name of the contractor alone, g) this helps to protect a property owner against any potential insolvency of the contractor or where problems regarding claiming against disputed amounts may occur.

Similar to Personal Accident (see Personal Accident within this Glossary) insurance where a lump sum is paid if someone is vital to a business and is unable to work as a result of illness or injury – a key person.

Provides cover for damage or the threat of damage caused by defective design, faulty workmanship or materials. Also provides cover for loss of rent or revenue caused by a latent defect.

Covers the cost of defending or pursuing civil actions and expenses that may have been incurred in a non-fault claim.

Such cover includes Corporate Legal Liability, Directors and Officers, Employment Practices Liability and Crime insurance (see within this Glossary for those specific areas of cover).   

Part of a Contractors All Risks/Contract Works policy and covers damage, theft and liability to the owner of equipment, plant and machinery owned by the insured (see Contractors All Risks/Contract Works within this Glossary).

Compensates a business if an employee suffers an injury that prevents them from working for you either temporarily or permanently (see Key Person within this Glossary).

Covers the insured against any poor advice, recommendation or mistake or design input that causes a third party to sustain a loss. Defence costs are also included (see Errors and Omissions within this Glossary).

Standard cover provides damage to the property insured caused by fire, lightning and explosion. The cover can be extended to cover special perils, such as, aircraft, burst pipes, earthquake, impact, malicious damage and theft, riot and civil commotion, storm, tempest and flood cover.

Provides cover for the insured in the event of bodily injury to a third party or damage to the property of a third party caused by the insured. Products Liability policies provide cover for the insured in the event of a claim made by a third party after using a product that has been altered, constructed, distributed, manufactured, repaired, serviced, sold, supplied or treated by the insured.

Provides cover for any stock that is damaged, destroyed or stolen.

Covers a tenant that may rent or lease a property and has spent money improving or refurbishing a property.

Covers losses and liabilities that might occur due to terrorist activities.

Covers problems associated with travelling including trip cancellation due to, for example, illness or lost luggage.

Covers the insured for claims bought against them for any breach of duty in their capacity as a trustee.