Glossary (A)

Accident
Event resulting in a loss (claim) which is not deliberately caused by the policy holder or is not an inevitable consequence of some other action of the policy holder.

Act of God
Natural occurrence outside human control such as earthquake, volcanic eruption, flood or typhoon. These occurrences may be specifically included in most insurance policies with a premium.

Acquisition Cost
These are costs incurred by the insurer to write business such as intermediaries' commissions, underwriting and issuance of policy expenses.

Additional Perils
These are provisions that can widen the scope of basic insurance policies, for example, Fire policies, which often restrict coverage to a limited range of perils, such as fire, lightning and explosion. The additional peril provisions are sometimes called Special Perils and may include, for example, losses caused by riot, strike or damage by impact of vehicle.

Agents
An independent person/company who sells and service insurance policies on behalf of the insurer.

Aircraft Damage
An 'Additional Peril' under a Fire policy, covers not only the unlikely prospect of a plane crashing into your building, but damage caused by articles falling or dropping there from.

All Risks
This refers to policies which provide wide cover, however, contrary to the term, they are not in fact “all” risks as exclusions will always be specified in an All Risk policy.

All Risks Coverage
A term generally reserved for reference to valuable items such as jewelry, artifact to insure against fire, lightning, theft accidental damage and named perils.

Arbitration Clause
This clause is found in the Conditions of many contract of Indemnity policies. Any difficulty that the insurer and insured may have in agreeing on the amount of a claim can be referred to independent arbitrators rather than going through the Courts.

Average
In insurance 'average' has several meanings, depending upon the context in which the word is used. In the case of property loss, if a policy is said to be 'subject to average', it means that if the sum insured at the time of the loss is less than the actual value of the property, then the amount of loss claimable under the policy will be reduced in proportion to the extent to which you have under-insured the value of the property concerned. In Marine insurance, however, 'average' means loss, which 'particular average' means partial loss.