Same as Antedating.


A period of employment that may be credited to the member of a pension scheme in respect of years of work before the member entered the scheme.


Term used to describe complementary transactions in the nature of hedging, as where a life policy and an annuity are effected simultaneously on the life of one person.


A violent cyclonic wind in the Philippines; a hurricane.

Bail bond

A bond given to obtain the release of an imprisoned person. It may guarantee that he will subsequently appear in court on pain of forfeiture of a specified sum (U.S.) or, as in some countries, that damages will be paid for a road accident for which he was responsible.


One in temporary possession of the property of another.


The entrustment of property to another.


One who entrusts his property to another.

Balance settlement

An arrangement whereby by an account is kept of premiums and claims payable and the balance is paid over at the end of a specified period.

Balance table

A statement prepared in respect of a pension scheme showing the balance of pension for each employee that has to be purchased by the employer.

Balanced portfolio

The total business of an insurer that has been so arranged by selection and reinsurance as to safeguard the financial equilibrium of the company.

Balancing charges

Term used to describe the tax which a shipowner may have to pay if he receives an insurance claim payment in excess of the book value of his ship and is therefore deemed to have made a profit accordingly.


The provision of insurance services by banks, often through insurance companies which they wholly or partially own.

Bank guarantee

An undertaking by a bank that liability under a document will be honoured or a contractual obligation met.

Bank Urgent

Lloyd's expression for a policy requiring to be signed urgently for deposit in a bank as part of the security for credit granted.


An act by the master or crew of a ship committed without the privity of the owner and detrimental to his interests.

Base premium

A ceding company's premiums to which the rate of premium for reinsurance is applied.

Base value

In a valuation-linked property insurance the value at the outset of a period of insurance is termed the base value.

Basic specification

The specification in a standard fire policy with columns for buildings, machinery, plant and other contents, stock and materials in trade, and miscellaneous.

Basis of valuation

To protect the insurer under an open cover where shipments may be declared and added to the insurance even after a loss a clause in the policy defines the basis to be adopted for their valuation.

Basis rate

The rate of premium for a business interruption insurance, based initially on the material damage rate and adjusted in some cases by a consequential loss loading, is termed the basis rate, the ultimate rate depending on the period of indemnity chosen.

Batch clause

A clause in a products liability insurance providing that all claims for injuries arising out of one prepared or acquired lot of the product resulting from a common cause, shall be considered as resulting from one accident and shall therefore be governed by the limit per accident.

Bearer policy

A policy the proceeds of which are expressed as payable to whomsoever holds it.


One receiving a benefit or advantage from, e.g., a will or an insurance.


A right to money or services under an insurance.

Benefit of insurance

Term used, e.g., in a contract of carriage, where some person such as a bailee stipulates that he shall receive the benefit of insurance effected by the owner.

Benefit of salvage

An insurer under a contract of indemnity who pays the value of property lost or destroyed becomes entitled to the salvage, See Without benefit of salvage.

Benefit policy

An insurance policy that prescribes the sum payable on the happening of the event insured against, as distinct from an indemnity policy where the sum payable depends on calculation of the insured's loss; for example, a personal accident policy.


The fluctuation in value of a share in comparison with that of the market generally.


Term used to describe an improvement in property insured under a contract of indemnity resulting from its reinstatement or repair. The insurer may seek to reduce his liability on the ground of betterment.

Bid bond

A bond required of a contractor tendering for a contract to ensure that the bid is being made in good faith.

Bill of lading

A shipping document containing a description of the goods to be shipped.


U.S. term for temporary cover issued by an insurer, or a reinsurer / An authority by an underwriter to an agent to grant cover on the underwriter's behalf.

Binding authority

An authority given by an insurer (or a reinsurer) to an agent to accept risks on the insurer's behalf.

Binding clause

A clause in a reinsurance treaty setting out the parties and the extent of the liabilities of each / A clause in a Lloyd's policy in which the underwriters bind themselves and specify their respective liabilities.

Blanket policy

A policy in which a single sum insured covers a number of separate items such as buildings in a fire policy or employees in a fidelity guarantee policy, without being divided up among them.

Blanket rate

An insurance rate applied uniformly over a number of items insured to which different rates might ordinarily apply.

Blind treaty

A reinsurance treaty under which the reinsurer dispenses with the provision of regular information about individual premium and loss items.

Block limit

The maximum value that an insurer will cover in respect of a given city block.

Block policy

A policy used primarily for inland transit risks on cargo issued for a fixed premium without the need for sendings to be declared. An "all risks" policy issued to certain trades, e.g., jewellers (U.S.).

Block system

A common system in industrial life assurance whereby an agent is allotted a block of territory to which he confines his canvassing and collecting.

Blocking and trapping clause

A clause which may be added to a marine insurance policy containing war and strikes clauses to cover loss or damage caused by blockage or blockade or prevention of sailing etc.

Blood relative clause

A clause in an industrial life assurance policy which provides that the assurer's liability shall be discharged by payment of the policy moneys to the husband or wife of the proposer or a relation by blood or connection by marriage.

Blue Cross

U.S. schemes of hospital and medical expenses insurance.

Blue List

Lloyd's Shipping Index.

Blue Shield

U.S. surgical and medical expenses insurance supplementary to Blue Cross schemes.

Boiler insurance

Insurance of boilers against damage by explosion or collapse and sudden and specified unforeseen events such as overheating.


A written obligation to pay a sum or to perform a contract / An undertaking by a surety to pay compensation or a penalty if the person guaranteed by the bond fails to fulfil some legal obligation / A single-premium life assurance policy.

Bonded warehouse

A warehouse for goods on which duty has not been paid and whose keeper is the subject of a bond to ensure that any duty which may become payable will be paid.

Bonding company

A company approved by the U.S. courts for the issue of bonds such as those necessary to effect the release of a ship from arrest (U.S.).


A part of the surplus of an insurance company distributed to policyholders / A free distribution of shares or money.

Bonus allocation

The apportionment of the available surplus of a life assurance company to its policyholders.

Bonus declaration

An announcement of the rate at which bonuses are to be credited to life assurance policies.

Bonus loading

A sum added to the pure premium to allow the margin necessary to pay bonuses to holders of with-profits policies.

Bonus reinforcement policy

A life assurance policy used to facilitate the purchase of a house on mortgage by means of with-profit rather than non-profit assurance. The assurance is for such a sum as will, with the addition of bonuses to be expected, enable the mortgage to be redeemed at the end of the term. To protect the mortgagee the with-profits assurance is reinforced by a decreasing term assurance so that in the event of the mortgagee's death before the bonuses have built up, the total proceeds will suffice to pay off the mortgage.

Bonus reserve

A provision retained by a life assurance company for the payment of future bonuses to its policyholders.

Bonus reserve system

A system whereby a life assurance fund is valued to show what future rates of bonus the fund will be sufficient to provide, upon suitable assumptions as to future mortality, interest rates and expenses.

Book debts insurance

Insurance against loss through inability to collect debts due because accounting records have been destroyed.

Book interest

The interest that an industrial assurance agent has in his right to collect premiums from the policyholders named in his collecting book. This goodwill was at one time commonly bought or sold and the practice survives in the case of some assurers.

Book value

The value of an asset as shown in the owner's accounting records.


A schedule or list. Commonly used in reinsurance practice for periodical statements of insurances, premiums and losses.

Both to Blame Collision Clause

Under a contract of affreightment cargo is normally carried at the risk of the cargo-owner who insures it. Where a collision between two ships damages the cargo, and both ships are to blame, the cargo owner will sue the third party shipowners who, by the law of some countries, can then recover part of the cargo claim from the carrier in whose ship it was carried. The Both to Blame Collision Clause in the contract of affreightment allows the shipowner in these circumstances to obtain reimbursement from the cargo owner. The Both to Blame Collision Clause in a marine cargo policy indemnifies the cargo owner for such a payment.


A loan to the master of a ship for the purpose of completing the voyage, repayable only if the voyage is completed (Obs.).

Bouquet (of treaties)

Reinsurances of different classes of insurance transacted by an insurer offered as a package deal to a reinsurer.


A continental exchange at which insurance is transacted, e.g., at Amsterdam.


An underwriter's seat and desk at Lloyd's.

Bracketed provisions

Same as Exceptional circumstances clause.


A class of insurance, e.g., life, marine / A local office of an insurance company.

Breach of contract cover

A form of credit insurance effected by a company to protect another against loss through failure of the company to complete contractual obligations of a financial nature.

Breach of statutory duty

In the case of many statutes a breach of a duty imposed by the statute gives a right of action in tort to a person injured by the breach.

Breach of Warranty endorsement

An endorsement to extend cover under an aircraft hull insurance to protect the interest of the mortgagee or lessor of the hull even if the insured has been guilty of an act or omission that would invalidate his own cover.

Breach of warranty of authority

A person who purports to act on behalf of a principal impliedly warrants that he has the principal's authority so to act. A third party who relies on the warranty and who sustains loss as a consequence may sue the "agent" for breach of warranty.


Engineering insurance in traditional form covers the breakdown of mechanical and electrical plant defined as (a) actual breaking or burning out of any part of the plant whilst in use from either mechanical or electrical defect causing sudden stoppage and necessitating immediate repair or replacement and (b) fracturing of any part of the plant by frost which renders the plant inoperative.

Breakdown insurance

A form of motor insurance covering the expenses incidental to the breakdown of a car, such as towage, hire, getting the car home, and hotel expenses.

Breakdown procedure

A rating method of construction insurance whereby the sum insured is broken down into individual items, e.g., earthworks, pile driving, each with an appropriate rate, and a time-related premium is added for natural hazards.

Breaking the warranty

Same as Opening the warranty / A breach by the insured of a warranty in an insurance policy which requires him to do, or not to do, something.


An independent person whose business it is, for remuneration, usually in the form of commission, to bring together the buyers and sellers of goods or services. See Insurance broker.


The commission payable to a broker. In insurance this is normally paid by the insurer.

Broker's cover

See Master cover.

Broker's daily statement

In Lloyd's practice a statement issued to brokers by Lloyd's Policy Signing Office, not necessarily daily, of insurances that have been notified to underwriting syndicates.

Broker's lien

The legal right of an insurance broker to hold a policy pending receipt of the premium from the insured.

Broker's pseudonym

An abbreviation identifying a Lloyd's broker in dealings with Lloyd's Policy Signing Office and Lloyd's Data Processing Service.

Broker's slip

See Slip.

Brokers' wording

A policy wording drafted by an insurance broker, often to suit the particular needs of a trade in whose insurances he specialises.

Broking deposit

A deposit payable by an insurance broker on admission to Lloyd's and held by Lloyd's in trust under a security deed.

Builder's risk

Marine insurance applicable to a ship under construction / U.S. term for Contractors' all risks (q.v.).

Building rate

The rate of premium applicable to buildings in fire insurance, which may differ from the contents rate.

Building-Society linked assurance

Life assurance in which the premiums (less a charge for the death risk) are invested on the policyholder's behalf in a building society.


A type of marine insurance providing liability cover in excess of normal limits for protection and indemnity risks / A liability insurance covering risks over and above a pre-existing insurance (U.S.).


A policy signing office.


The crime of entering a building as a trespasser and (a) stealing or attempting to steal anything in the building or inflicting or attempting to inflict bodily harm on any person in the building, or (b) intending to commit any of the acts listed in (a). (Cf. Theft Act 1968.)

Burglary insurance

See Theft insurance.

Burning cost

The cost of claims under a group of insurances or a reinsurance treaty, used to obtain certain ratios. In U.K. fire insurance the ratio may be of claims cost to premiums or sums insured. In reinsurance the ratio is of reinsurance losses incurred to the ceding company's premium. Use of the term is not confined to fire insurance.

Burning ratio

The cost of claims expressed as a percentage of premiums.

Business interruption insurance

Same as Interruption insurance.

Business risk

A risk inherent in a business such as a change in supply or demand whereby, if things turn out badly, a trading loss will be suffered or profit reduced.

Buyer's interest

The insurable interest of a buyer of goods.

Buy-out bond

An insurance contract which invests the transfer value (q.v.) from an occupational pensions fund to provide eventual retirement benefits. The contract is usually written under section 32, Finance Act 1981.