WITHERBY’S DICTIONARY OF INSURANCE v Contents Page Preface to the Third Edition vi Abbreviations 1 De?nitions 29 Institutions of Insurance 341 vi Preface to the Third Edition This dictionary is intended to help people who practice insurance or who need to read about it to understand the terms and abbreviations they may encounter. It is not encyclopaedic. The aim is to give the reader in a few words the meaning of each term defined, without going into great detail. The main problem in compiling the vocabulary has been to decide where to draw the line. For example, there are a great many technical American terms but only a selection of them has been included. Many others are to be found in Lewis E. Davids’ Dictionary of Insurance. Again, the marine insurer will need to know the vocabulary of ships and ship construction. For this it would be necessary to go to R.H. Brown’s Dictionary of Marine Insurance Terms and Clauses. Actuarial science has a vocabulary of its own which the dictionary has not attempted to cover. The aim has been to provide for the general practitioner in any class of insurance rather than for the highly specialised. To make the book more useful I have included not only abbreviations and definitions but short notes on the principal institutions of insurance in the United Kingdom. In this new edition over 200 new abbreviations and definitions have been added. Other definitions and the notes on insurance institutions have been updated. I have removed some, but not all, obsolete terms as references to some will still turn up at times. Insurance is constantly changing so that updating needs to be a continuous process. Suggestions for improvements or corrections will be welcomed. Meanwhile I hope that users of the dictionary will find it of some service. Hugh Cockerell Visiting Professor in Insurance Studies City University Business School Frobisher Crescent Barbican London EC2Y 8HB 155 INDEMNITY TERMS Indemnity terms It is common for an intermediary introducing a life insurance to receive commission in advance on the undertaking to refund it if premiums are not paid. Indenture A deed to which there is more than one party. Independent company Same as Non-tariff company. Independent liability method A method of apportioning a claim covered by two or more insurances. The liability of each insurer is calculated independently and each insurer contributes in proportion to the amount of his liability thus ascertained. Independent range Insurance policies are said to be of independent range when one covers property of certain classes or at certain situations and the other covers classes of property or situations which are not identical. If there is some overlap in cover the respective insurers must contribute in the settlement of a loss. Independent risk unit Part of the subject-matter of an insurance which is separate from and independent of other parts. Index clause A clause in a contract of insurance or reinsurance which links premiums and sums insured or limits of indemnity to an index of prices as a measure of combating the effects of inflation. Indexed annuity An annuity under which the calculation of the annual payment due is made by reference to a cost-of-living index. 156 INDICATE Indicate A broker who has obtained a quotation from a leading underwriter for a line of an insurance is said to indicate a rate when he informs his client of this. Indirect business Insurance received by an insurer through a broker or agent entitled to commission, or through another insurer, as distinct from business transacted directly between the insurer and the insured. Indisputability clause A clause in a policy providing that after a stated period the insurer may not dispute the validity of the policy in the absence of fraud on the part of the insured thus relieving the insured of the consequences of any innocent non-disclosure or misrepresentation. Individual life assurance Life assurance effected by individuals as distinct from group life assurance. Indivisibility of premiums A principle whereby when a premium has been agreed for a period it is payable in full even though the insurer has covered the risk for only a part of the period. Industrial all risks insurance Insurance of industrial property against loss or damage where the perils insured against are not specified but exceptions are. Industrial fire insurance Fire insurance of business property as distinct from the insurance of the property of private individuals. Industrial injuries insurance A form of social insurance providing benefits for employed persons for injuries arising out of and in the course of their employment. 157 INDUSTRIAL LIFE ASSURANCE Industrial life assurance Life assurance the premiums on which are paid to collectors at intervals of less than two months. Industrial property rights insurance Insurance against the infringement or alleged infringement of patent, design, trademark, trade name or copyright, or actions for passing off, in respect of goods sold or supplied. Inevitable accident Where a defendant seeks to escape liability for the consequences of an accident on the ground that it was inevitable, it must be shown that he did (or omitted to do) nothing that a person exercising ordinary care, caution and skill would not have done, (or would not have left undone, as the case may be). Inflation factor An adjustment of premium to allow for a rise in costs due to inflation. Infra Below Infringement (of industrial property rights) insurance Insurance against the financial consequences of inadvertently infringing rights such as patents, trademarks or copyright. Ingestion damage Damage caused by foreign bodies being drawn into the air intake of the turbine engine of an aircraft. Inherent vice A quality in goods that produces damage to them by its own action without the assistance of an outside agency. Initial period In business interruption insurance a period of so many weeks after the occurrence of material damage during which the insured is protected against loss in relation to wages to the full extent of his wage roll.