The sum payable by a member of a Protection and Indemnity Club (q.v.) for his right to indemnity by the club. A call payable at the outset of each period is termed an advanced call. Additional payments (supplementary calls) in respect of a period may be made subsequently if required to meet claims arising. A member leaving may have to pay a release call.


The termination of a policy by notice or mutual consent.

Cancellation clause

A clause in a policy setting out the conditions under which the policy may be cancelled by notice.

Cancelling returns only

A provision found chiefly in hull reinsurance that no return of premium will be allowed except where the policy is cancelled.


The maximum amount of insurance that an insurer or the insurance market will be prepared to accept.

Capital additions clause

A provision in a fire policy to cover new buildings or machinery added by the insured during the period of insurance.

Capital annuity

Same as Split annuity.

Capital benefits

Lump sum benefits under a personal accident policy, e.g., for death or loss of limb or sight.

Capital bond

A contract, whether in the form of a deferred annuity with cash option, or a life assurance, which, in consideration of a premium, promises payment of a larger sum at the end of a term of years.

Capital redemption policy

An insurance to provide a capital sum at the end of a term in order to replace one's capital (because e.g., a lease will expire or debentures will become repayable).

Capital sum

The sum payable under a life policy (other than income benefits) when a claim falls due for payment.

Captains' Room

The restaurant at Lloyd's, so called from the room at Lloyd's Coffee House which was originally used as a meeting-place for seafaring men and a venue for the sale of ships and goods by auction.

Captive insurance company

An insurance company formed by a trading company, a trade association or the like, primarily for the insurance of the founder's own risks.

Capture and seizure

In marine insurance capture includes every act of seizing or taking by an enemy or belligerent. Seizure goes beyond this to embrace every act of forcible possession either by a lawful authority or by overpowering force.

Cargo insurance

The insurance of goods transported by sea or air.

Cargo interest

Insurable interest relating to cargo, other than the interest of the cargo owner.


An official document permitting goods or vehicles to cross frontiers without payment of customs duty.

Carpenter plan

Same as Spread loss reinsurance.

Carriage of Goods by Sea Acts

Acts laying down the respective responsibilities, liabilities, rights and immunities of carriers and cargo owners in respect of the carriage of goods by sea. The latest Act is that of 1992.


A person who carries passengers or goods by land, sea or air / An insurer or reinsurer (U.S.).

Cash agent

An agent introducing insurance who is not allowed any period of credit for payments to the insurer of the premium.

Cash benefit scheme

A scheme for the payment of a cash benefit on retirement.

Cash bonus

A bonus on a life policy that is paid in cash, as distinct from a reversionary bonus.

Cash insurance

Same as Money insurance.

Cash loss

An arrangement in a reinsurance treaty or under a direct insurance whereby if a large claim arises it is settled immediately without waiting for a periodic adjustment of accounts.

Cash option

An option to take cash in lieu of a benefit in some other form, such as an annuity.

Cash-in value

Same as Surrender value.

Casualty insurance

U.S. term for non-life insurance other than fire, marine or surety business.


A sudden and severe disaster causing very large loss.

Catastrophe hazard

The hazard of very large loss arising out of a single cause.

Catastrophe reinsurance

Reinsurance to protect an insurer against an accumulation of losses arising from a single catastrophic event such as an earthquake.

Causa causans

Same as Proximate cause.

Caveat emptor

Let the buyer beware.

Cavity barrier

A construction to close or divide a cavity against penetration by flame or smoke.

Ceasing age

The age at which benefit under a permanent health policy ceases.


Same as Cedent.


To buy reinsurance.


An insurer who transfers risks by means of reinsurance.

Ceding company

An insurance company that transfers risks by means of reinsurance.

Centralised society

A friendly society without branches.

Certificate of entry

A policy issued by a Protection and Indemnity Club in respect of a vessel entered in the Club.

Certificate of existence

Same as Survival certificate.

Certificate of insurance

See Insurance certificate.

Cessation of payment of premiums

Some long-term policies provide that the annual premium shall cease to be payable at some date before the termination of the policy, e.g., when the insured attains a given age, the cover remaining in force.


Insurance that is reinsured.

Cestui que trust

One for whose benefit property is held in trust.

Change in temperature clause

An exclusion in a fire policy on goods in a cold store of damage to perishable goods caused by a change in temperature.

Change of voyage clause

A clause in a marine insurance cargo policy providing that if the voyage is changed or there is any omission or error in the description of the interest, vessel or voyage the insurance will be held covered at a premium to be arranged.

Charge note

Same as Debit note.

Charges of insurance

The premium (marine).

Charter aircraft

Aircraft available for hire under a special contract.

Chartered freight

The hire paid or payable to a shipowner for the use of the entire ship for a voyage or for a period.

Chartered Life Underwriter

A U.S. designation, based on examination and experience, for a person concerned with the sale of life assurance.

Chartered loss adjuster

A loss adjuster (q.v.) who is a member of the Chartered Institute of Loss Adjusters.

Chartered Property and Casualty Underwriter

A U.S. designation, based on examination and experience, for a person concerned with the sale of property and casualty insurance.


A contract for the hire of a ship.


Personal property.

Chattels personal

Movable things.

Chattels real

Leasehold interests in land.

Checked baggage

Such personal property accompanying a passenger on an aircraft as is defined by the air carrier, as distinct from cargo.

Child's deferred assurance

Assurance on a young child under which the sum assured becomes payable only on death after attainment of a specified age.

Chomage insurance

Same as Percentage of fire loss insurance.

Chose in action

A thing of which one has not the present enjoyment but which one has a right to recover by legal action, e.g. the proceeds of an insurance policy.


The act of an intermediary in replacing one insurance or reinsurance by another in order to earn more commission

Civil commotion

A disturbance of the peace involving numbers of persons but falling short of a rebellion or revolution. A stage between a riot and a civil war.

Civil law

A legal system derived from Roman law, in which most of the law is expressed in codes of law, as in France or Germany / The national or municipal law of a state, in contrast with public international law / The laws of a country excluding some field or fields of law such as criminal or military law or in some countries, administrative law, ecclesiastical law or commercial law (which governs merchants and trade).

Civil Liability Convention for Pollution Damage from Persistent Oils 1969

An international convention which places liability on shipowners for pollution damage caused by oil spillages.

Claim agent

The agent appointed by a marine insurance company to settle a claim (U.S.).

Claim settlement rate

The speed at which claims are brought to finality.

Claiming cash

A right which insurers may have to ask reinsurers for immediate settlement of a substantial claim rather than wait for the regular periodical settlement.

Claimright insurance

Insurance to the consignor of goods in respect of money withheld by the consignee in accordance with the contract of sale, pending arrival of the goods.

Claims adjuster

One who negotiates settlement of a claim on behalf of an insurer.

Claims Advisory Committee

A committee at Lloyd's which advises underwriters defending legal actions whether they should proceed to trial, having regard to Lloyd's good name.

Claims broker

The employee of an insurance broker who handles claims on behalf of clients.

Claims Bureau

Any office set up by insurers to handle claims / Lloyd's Underwriters' Claims Office, used by most marine underwriters at Lloyd's to handle claims, including reinsurance matters.

Claims condition

A condition in many types of insurance policy setting out the insured's duties in the event of a claim.

Claims cooperation clause

A clause in a reinsurance treaty providing for early notice of possible claims and cooperation in the defence of claims that may affect the reinsurer and stipulating that the insurers shall not admit liability for such a claim without the reinsurer's consent.

Claims equalisation reserve

A reserve by an insurance company to smooth the cost of claims which occur at irregular intervals, e.g., through natural phenomena such as exceptionally adverse weather, so as to prevent undue fluctuations in the revenue account.

Claims expenses

The expenses of investigating and settling claims, e.g., adjusters' fees as distinct from the claims themselves.

Claims made basis

The basis of a policy which confines the liability of an insurer to claims made during the currency of a policy, as opposed to a policy on an occurrence basis (q.v.).

Claims payable abroad

A provision that may be inserted in a policy to permit the collection of claims payments from some specified person overseas.

Claims reserves

The provisions made by an insurer for (a) claims notified but not paid and (b) claims that may have arisen but that have not yet been reported.

Claims sharing agreement

An agreement between two property and liability insurers that in the event of claims arising in which both are interested on behalf of different parties, such claims shall be shared between them on some specified basis without regard to the degree of legal responsibility of the respective policyholders.

Claims-settling agent

One instructed on behalf of an insurer both to assess a loss and to pay it on the insurer's behalf.


The selection of factors on which to base premium rates, e.g., location, activities / A class.

Classification clause

A clause in a marine cargo policy specifying the minimum standard of the vessels to be used in the carriage if additional premium is to be avoided. Vessels must be fully classed by a recognised classification society but additional premium may be required if a vessel is over a specified age.

Classification society

A society formed to inspect ships and to describe and grade them for the information of insurers, e.g., Lloyd's Register of Shipping. An approved ship is said to be fully classed.


A section of a policy or other legal document such as a will or parliamentary bill.

Clause 19 (2)(a)

A clause in the Royal Institute of British Architects model conditions of contract for building which requires a contractor to maintain certain liability insurance in the joint names of the employer and the contractor.

Claused Bill

A bill of lading which records some defect in goods shipped or in their packaging.


Claim back by Inland Revenue of tax relief allowed on life assurances in certain circumstances, e.g., where the policy is made paid up in its early years.

Clean cut basis

A method of accounting in treaty reinsurance whereby the right of a reinsurer to receive premiums or his liability to pay claims is treated as ceasing upon cancellation of the treaty.

Closed fund

An insurance company's long-term fund on which new business is no longer written.

Closed line

A broker is said to close a line when he decides how much of an insurance shall be attributed to an underwriter who has written a line. The total lines written may have exceeded 100% of the insurance required or the value provisionally stated may have proved an over-estimate.

Closed scheme

A pension scheme closed to new entrants. Existing members will either continue in full membership or will cease to receive increases in benefit.

Closed year

A year of account for which the financial outcome has been determined; usually, at Lloyd's, after three years, when remaining liabilities are reinsured.


Completion of an insurance.

Closing slip

A form of advice to an insurer from a broker detailing an insurance so that a policy can be prepared.

Cloth cap scheme

A Provident fund (q.v.).


See Protection and Indemnity Club.

Club calls

The contributions that shipowner members of a Protection and Indemnity Club are called on periodically to make to meet the claims paid and expenses incurred by the club.


Same as Co-insurance (1).


Same as Co-insurer.

Code Civil

A code of law governing the rights and duties of parties in civil matters, such as has existed in France from the time of Napoleon, spreading to many other countries.

Coded excesses method

A system of rating reinsurances to adjust automatically premiums payable for excess-of-loss covers arranged on an individual basis, in line with changes in the reinsurer's exposure as revealed by changes in the ceding company's portfolio and its distribution by sums insured.


Assembling and stating the law relating to some topic in a single logically arranged form, as for marine insurance, in the Marine Insurance Act 1906.

Coefficient of variation

The standard deviation (q.v.) divided by the mean of a number of standard deviations.


Where a number of insurers each cover part of a risk or where a policy requires the insured to bear a part of each loss there is said to be co-insurance. / "An insurance covering two or more insured. It may be either joint, as where the insured have identical interests in the same subject-matter, or composite, as where the insured have different interests (e.g. mortgagor and mortgagee) / In the U.S. the term is used to describe the application of an average condition (q.v.) whereby if the sum insured is inadequate the insured has to bear a proportionate part of a claim / Reinsurance on the same terms as the original insurance (U.S.).


Each of a number of insurers participating in an insurance. / An insured whose policy requires him to bear part of a loss.


A peril covered by a boiler policy and commonly defined as "the sudden and dangerous distortion (whether or not attended by rupture) of any part of the plant caused by crushing stresses by force of steam or any other fluid pressure (other than pressure of ignited flue gases)".

Collecting book

A book in which an industrial life assurance agent records the premiums he collects.

Collecting commission

Commission paid to a broker by the insured where the broker has collected a marine insurance claim on his behalf,

Collecting note

A document empowering a broker to collect a marine insurance claim on the insured's behalf.

Collecting society

A friendly society that transacts industrial life assurance,

Collection commission

Commission paid by an insurer to an agent for the collection of premiums.

Collective policy

A policy issued on behalf of a number of insurers / "A policy in respect of a number of persons, with insurance in respect of each separately. "


An agent employed by an industrial life assurance company with the duty of collecting premiums.


The violent encounter of two objects. In marine hull liability insurance a distinction is drawn between "collision" with vessels and "contact with fixed objects" such as piers, wharves and fastened buoys, the latter not being covered by collision clauses.

Collision clause

A clause in a marine hull policy covering the shipowner in respect of his liability (or frequently three-quarters of his liability) for claims by third parties arising out of collisions.


Secret agreement or understanding for a deceitful purpose. A theft insurance sometimes excludes losses arising out of collusion with an insider such as an employee.

Combination company

An assurance company that transacts both ordinary and industrial life assurance (U.S.).

Combination plan reinsurance

A combination of excess of loss and quota share reinsurance in one contract.

Combination policy

A policy issued by two or more insurers embodying two or more kinds of insurance each insured with a separate insurer (U.S.).

Combined claim

A claim under an environmental impairment liability insurance which relates partly to insured and partly to excluded losses.

Combined company policy

A policy issued on behalf of a number of insurance companies, each insuring a portion of the risk.

Combined liability policy

A policy combining employers' liability and public liability cover.

Combined policy

A policy issued on behalf of two or more Lloyd's underwriters or two or more insurance companies.


Remuneration to an agent for services such as arranging an insurance.

Committee of Lloyd's

Until Lloyd's Act 1982, the governing body of Lloyd's. Now a committee which, under the Council of Lloyd's (q.v.), conducts the day-to-day administration of Lloyd's.

Common account

When an original insurer who already has reinsurance effects further reinsurance with another reinsurer it may be either wholly for his own protection or also for the protection for the first reinsurer. In the latter case it is said to be reinsurance for the common account.

Common carrier

One who carries goods for hire, his services being offered to the public generally without discrimination.

Common hazard

Same as General hazard.

Common law

A legal system based on precedent rather than on a legal code. / "The law, other than that contained in the principles and rules of equity (3., q.v.) / "Legal rights, remedies, crimes and the like which exist without being expressed in statutes / "In countries with a civil law system, the law common to the whole country as distinct from peculiarities of law in one area. /


Connection between buildings whereby fire could spread from one to another, i.e., where the buildings are not separated by a party wall.


Payment to discharge an actual or potential liability to make payments in the future.

Commutation clause

A clause often found in Lloyd's reinsurance treaties which provides for the estimation and discharge of all liabilities by payment of a lump sum.

Company limited by guarantee

A company without share capital, the liability of members for its debts being limited to a sum specified in its constitution.


A payment to make good a loss.

Complete annuity

Same as Apportionable annuity.


Taking the final formal step in the conclusion of a contract so that it comes into force forthwith.

Completion bond

A bond to provide a sum of money if an enterprise (such as the making of a film) is not completed.

Component parts clause

A clause under an aviation hull policy which restricts the insurer's liability in respect of a given component part to a stated proportion of the sum insured.

Composite company

An insurance company that transacts a number of classes of insurance, including both life and non-life.

Compound reversionary bonus

A sum added to the sum assured under a with profits life assurance to be payable when the policy becomes a claim and meanwhile to be aggregated with the sum assured as the basis for calculation of subsequent bonuses.

Comprehensive policy

A policy covering a number of perils.

Compulsory excess

A provision in a policy, imposed by the insurer, that the insured shall bear the first Lx or the first y% of a claim.

Compulsory insurance

Insurance that a person is obliged to effect. For example, a motorist is required by the Road Traffic Act to have in force an insurance in respect of liability for bodily injury to or damage to the property of third parties arising out of the use of a motor vehicle on a road.


Deliberate suppression by a proposer for insurance of a material fact relating to the risk.

Concurrent insurances

Insurances are said to be concurrent when they cover only the same property or classes of property in the same situation(s), when none extends to any risk not covered by the other(s), and when none contains a specific provision that would prevent the policies from ranking uniformly in their application.

Condition of average

Same as Average condition.

Condition precedent of the policy

A condition of an insurance a breach of which by the insured entitles the insurers to avoid the policy.

Condition precedent to liability

A condition of an insurance a breach of which by the insured entitles the insurers to deny liability for a claim under the insurance.

Condition subsequent of the policy

A condition of an insurance a breach of which by the insured entitles the insurers to sue for damages though not to escape liability for a claim.

Conditional probability

The probability of an event given the occurrence of some other event or combination of events.

Conditional receipt

A receipt for the initial premium on an insurance proposal, subject to a condition, e.g., that the insurance will not be effective until the insurers have considered and notified acceptance of the proposal.


The Scottish equivalent of probate.

Confiscation insurance

The confiscation risk for overseas plant and equipment may be covered by insurance. For marine insurances distinction is drawn between confiscation resulting from war, which is part of war risks insurance, and any other confiscation, e.g., in respect of cargo. Both types of confiscation risk may be covered under a marine insurance.


A destructive fire spreading over many properties.

Conflagration area

An area over which a destructive fire is thought to be capable of spreading, or has already spread.


Abbreviation of consequential loss.

Consensus ad idem

Perfect agreement between the parties to a contract. An essential to the making of the contract.

Consequential loss insurance

Insurance against pecuniary loss, other than material damage, resulting from an insurable peril.


For a contract to be valid in English law each party must give something of value, whether in the form of money, goods, services or a promise of them.

Consolidated option

An option in a business interruption insurance, effected on the Dual Wages basis, for the insured to elect to receive full protection against loss in respect of wages for a longer period than the initial period specified in the policy.

Consolidated period

The initial period specified in a business interruption insurance on the Dual Wages basis plus the extension of the period provided for under the Consolidated option (q.v.).


A number of businesses working jointly on a project, e.g., contractors, consulting engineers, architects and surveyors in a construction project.

Constant premium

A premium that does not vary from time to time.

Construction cost index

An index showing variations in the cost of construction work, which may be used for determining automatic changes to sums insured.

Constructive total loss

In marine insurance a constructive total loss occurs where the subject-matter insured is reasonably abandoned on account of its actual total loss appearing unavoidable or because it could not be preserved from actual total loss without an expenditure which would exceed its total value after the expenditure had been incurred. In non-marine insurance the insured has no right of abandonment but the term is used when repair of the subject-matter would be uneconomic.

Consultation condition

A clause in a credit insurance policy that requires the insured to consult with the insurers when they have cause for concern over the creditworthiness of insured buyers or when an insured debt becomes overdue.

Contact damage

In marine insurance, damage to a ship or conveyance by contact with some external substance other than water or another ship. (Damage through contact with another ship is termed collision damage.)

Contents rate

The rate of premium for fire insurance applicable to the contents of a building as distinct from that applicable to the building itself.

Contingency fund

A fund held as a reserve against some event that may happen but is not certain to happen.

Contingency insurance

Insurance against relatively remote possibilities e.g., loss arising through the reappearance of a missing beneficiary, or secondary liability arising because a person primarily liable is not indemnified by an insurer / Marine insurance and reinsurance under which the insrer or reinsurer undertakes to pay a fixed amount in the event of a contingency occurring.

Contingency reserve

A fund set aside to meet unforeseen occurrences of a specific type.

Contingent annuity

An annuity that becomes payable only if some event or series of events occurs, e.g., if A and B predecease C.

Contingent assurance (life)

A life assurance that becomes payable only if some event or series of events occurs, e.g., if A and B predecease C.

Contingent bonus

A bonus granted conditionally, e.g., if the life assured survives for X years.

Contingent commission

A commission payable to an agent that is dependent on some feature of the business to which it relates, e.g., its profitability.

Contingent debt

A reduction applied to the sum assured under a life policy if death occurs within a specified period.

Contingent fee

A fee, the payment of which is contingent on some event, e.g., as where, in the U.S.A., a lawyer acts for a client in a lawsuit without payment unless the suit succeeds.

Contingent liability

A liability arising in some secondary way.

Contingent liability (motor) insurance

Third party insurance indemnifying an employer or one who hires out vehicles against any liability that may rest on the insured if the insurance effected by the user of the vehicle proves non-existent or ineffective.

Contingent life assurance

Life assurance under which the sum assured becomes payable only if a certain state of affairs exists at the time of the death of the life assured, e.g., if another person has died meanwhile.

Contingent survivorship assurance

An assurance on two or more lives that becomes payable only in a certain contingency, e.g., if the deaths occur in a particular order.

Continuation Clause

A clause in a marine insurance hull policy providing that if at expiration of the policy the ship is at sea or in distress or at a port of refuge or of call it may on previous notice be held covered to its port of destination at a pro rata premium.

Continuation option

An option in a group life or permanent health insurance for an individual leaving the group to maintain insurance in respect of himself.

Contra entry

An accounting entry set against another entry.

Contra preferentem rule

A rule of construction whereby if one party to a contract has drawn it up, any ambiguity in the contract will be construed by the courts against that party rather than in his favour.


An agreement based on the meeting of minds and requiring a consideration in the form of an act or a promise to be given by each party.

Contract for services

A contract whereby one party undertakes to perform services for the other party as an independent contractor and not as a servant of that other party. Cf. Contract of service.

Contract guarantee

A bond whereby A, a guarantor, promises to pay B a sum of money if C does not perform a contract entered into between B and C.

Contract of adhesion

A contract in a standard form prepared by one party without options as to its terms on the part of the other party.

Contract of indemnity

A contract the intention of which is to make good financial loss as nearly as possible.

Contract of service

A contract whereby one party agrees to work as the servant of the other party who can stipulate the way in which the work shall be done. Cf. Contract for services.

Contract price clause

A clause in a fire policy whereby in respect of goods that have been sold but are still the responsibility of the insured the insurers agree that the price named in the contract shall be the basis of indemnity in the event of a claim.

Contract signing scheme

A system at Lloyd's whereby underwriters may agree that certain policies shall be signed by Lloyd's Policy Signing Office without immediate notification to all underwriters concerned.

Contract works insurance

Same as Contractors' all risks.

Contracting out

Excepting oneself from an obligation that would otherwise rest on one in law, For example:; (a) the members of an approved occupational pensionscheme may be contracted out of part of the social security retirement scheme; (b) a haulage contractor may stipulate that goods he carries shall be at their owner's risk.

Contractors' all risks

Insurance in respect of contract works covering damage to property on the site however caused (though with exceptions) and third party liability.

Contractual liability

Liability that arises by virtue of a contract, as distinct from liability at common law.

Contractual savings

Sums that a saver undertakes to save regularly over a period.


The principle whereby if two or more insurers indemnify the insured in respect of the same subject matter against the same peril on behalf of the same interest, they share the loss or liability proportionately / Money paid for a pension under a pension scheme. Contribution clause / A clause in an insurance contract of indemnity providing that the insurer shall not be liable for more than a rateable proportion of a claim if there is in force another insurance covering the claim.

Contribution method

A method of allotting bonuses to different classes of life policyholders in proportion to the contribution that each is assumed to have made to the company's surplus.

Contributions equivalent premium

A payment made by a pension scheme to the State when a member leaves service, representing the additional contributions that would have been payable to the State if the member had not been contracted out.

Contributory bonus system

A system whereby a life insurer in calculating the bonus payable on a policy looks at the contribution to surplus made by that policy rather than by all policies

Contributory negligence

Where a person sues for damages the damages may be reduced by a proportion by virtue of the fact that his own negligent conduct contributed to causing the event giving rise to the claim or enhanced the injury suffered.

Contributory pension scheme

A pension scheme in which employees make contributions towards the cost of the scheme.

Contributory reinsurance

Same as Quota share reinsurance.

Contributory value

The value of a ship, its cargo and freight, on which general average contributions are based.

Control law

The laws of a state that regulate the operations of insurers.

Controlled funding

A system of paying for a pension scheme whereby the ultimate cost of pensions is estimated, and either (a) the scheme's money is spent on buying pensions for the oldest members first, or (b) pensions are not allocated to individual members until they reach retirement.


An official, such as one who supervises the application of insurance control laws. / A person who controls an insurance company, as defned by the Insurance Companies Act 1974, s.7., including a managing director, chief executive, a person controlling one-third or more of the voting power, or a person in accordance with whose directions the directors are accustomed to act.

Controlling authority

The government department or office that controls the operations of insurers in a country - in Britain the Insurance Division of the Department of Trade and Industry.


The wrongful use or disposition of property that is in one's lawful possession / "Changing a contract from one form to another, e.g., converting a life assurance policy which provides for the payment of an annual premium, into a policy for a reduced sum assured with no further premium being required. "


Capable of being converted by exchange into property of a another kind.

Convertible currency

In Lloyd's practice a currency other than that of the U.K., the U.S.A., or Canada.

Convertible term assurance

A temporary life assurance that can be exchanged for a permanent life assurance at the assured's option.

Cooling-off period

A period during which one who has agreed to enter into a transaction such as a life assurance or a hire purchase agreement may withdraw without penalty.

Cooperative society

A society owned by the consumers (or the producers) of a product.

Coordinating agent

An underwriting member of Lloyd's who writes business under more than one underwriting agent is required to nominate one of them to coordinate the allocation of his premium limit (q.v.).


The ownership of a work, including industrial designs, plans and drawings, by its originator.

Corporation loan

A loan to a public authority.


An overseas broker whose business is placed at Lloyd's by a Lloyd's broker.

Cost escalation cover

A facility offered by the Export Credits Guarantee Department to protect traders and contractors against a part of the risk of large increases in cost.

Cost, insurance and freight

A term of sale for goods in transit whereby the price paid by the buyer includes the insurance premium and the shipping charges.

Cost-of-living index

An index, such as the Retail Prices Index, which measures changes in prices over a period.


One of a group of sureties participating directly in a bond.

Council of Lloyd's

The governing body of Lloyd's since 1982, Certain members of the Council are elected by Lloyd's Names (q.v.) and form the Committee of Lloyd's which, under the Council, conducts the day-to-day administration of Lloyd's.

Counter guarantee

Security given to a guarantor to indemnify against any liability incurred as a result of having given guarantee.

Counter indemnity

Same as Counter guarantee.

Counter life

The life involved in a contingent survivorship assurance whose death brings the insurance to an end without payment of the sum assured.

Counter selection

Same as Selection against the insurer.

Country damage

Damage to baled or bagged goods prior to loading on a vessel, caused by the absorption of excessive moisture or deterioration from grit, dust or sand forced into the goods due to inclement weather.

Country risk

The danger of loss through occurrences in a country which result from its political or economic conditions.

Coupon insurance

Insurance effected by completing a coupon and sending it to the insurer.

Coupon policy

A life assurance policy with coupons attached, each of which entitles the holder to payment of a guaranteed cash bonus on a stated date (U.S.).

Court bond

A bond given to a court of law to guarantee the due performance of certain duties by a principal.

Court of Protection bond

A bond given to the Court of Protection in respect of a person responsible for the affairs of a mentally incapacitated person.

Cover note

An interim document evidencing the grant of insurance cover.


Insurance protection (U.S.).


An agent authorised by an underwriter to grant cover on the underwriter's behalf.

Craft risks

Risks arising when cargo is being landed or transhipped in a small vessel.

Credit accident insurance

Insurance to relieve a debtor of his obligations to pay during periods of inability to earn as a result of accidental injury.

Credit agent

An agent introducing insurance who collects the premium for which he is allowed a period of credit before he must pay it to the insurer.

Credit card insurance

Insurance of the liability of a credit card holder for the misuse by a third party of his card.

Credit control

The measures taken by a business to safeguard itself against loss through slow payment, or failure to pay, by debtors.

Credit guarantee

A guarantee to a seller that a purchaser will pay.

Credit insurance

Insurance for creditors against their inability to collect debts due to them. / "Insurance whereby debtors are relieved of their obligtions if they die (see Credit life assurance) or while they are prevented from earning by, e.g., accidental injury or sickness or unemployment (cf. Credit accident insurance). "

Credit life assurance

Assurance to provide for the repayment of a loan in the event of the borrower's death.

Credit note

A document notifying the placing of a credit to an account.

Creditable service

A period of service that counts in the determination of eligibility for membership of a pension scheme or in the calculation of pension.

Cremation expenses insurance

Insurance effected by an individual to provide for the expenses of his ultimate cremation.


Contract Regarding an Interim Supplement to Tanker Liability for Oil Pollution. A cargo owners' scheme to provide compensation for oil pollution additional to that provided by TOVALOP (q.v.), with a top inclusive limit of $30m, met from contributions by oil company members of the scheme.

Crop hail insurance

Insurance against damage to crops by hail.

Crop insurance

Insurance for farmers against failure or diminution of a crop resulting from either one specified peril (hailstorm) or more general perils such as flood and adverse weather.

Cross liabilities

Where two vessels, A and B, are in collision in circumstances where both were partly to blame, so that A is liable to B for part of B's damage and B is liable to A for part of A's damage, the Admiralty Court makes a single award to the party who has a net balance in his favour. Marine hull policies provide that claims shall be settled under the policy on the basis of cross-liabilities, viz., as if each party had been compelled to pay his proportion of the other's damage / Where a liability policy indemnifies two or more persons it is possible that one of the insured may incur a liability to another of the insured. A cross-liabilities clause makes it clear that each insured is separately indemnified so that such a liability is covered.


Marine insurances on voyages between ports outside the United Kingdom.

Cumulative preference share

A preference share (q.v.) which entitles the holder, if his dividend is unpaid in any year, to receive it out of the profits of a subsequent year.

Current annuity

An annuity in course of payment.

Current cost method

Same as Single premium method.

Current risks

Insurances in effect at any given time.

Current service pension

The pension earned by an employee in a pension scheme during his service after his entry into the scheme.

Curtate annuity

Same as Non-apportionable annuity.

Custody and control

Public liability policies often exclude liability for damage to property in the insured's custody and control but the exclusion may require modification or deletion, e.g., in the case of insured who provide car parks or cloakrooms.

Custom and usage

Custom and usage of a particular trade or market may be a defence to an otherwise valid claim if the parties can be taken to have accepted it, provided the custom or usage is not unlawful.

Custom of Lloyd's

Practice peculiar to the Lloyd's market which binds those taking part but not if it is unreasonable (unless they have assented to be bound) or unlawful.

Customary deductions

Deductions, by a custom of Lloyd's, from claims for particular average to ship, usually one-third where new work replaces old in repairs to hull or machinery. In practice waived by the insurer.

Customary groundings

See Customary strandings.

Customary strandings

In marine hull insurance underwriters agree to pay the cost of inspecting the bottom of the vessel after a stranding or grounding, even if no damage is found, except if the stranding or grounding takes place in certain specified areas known as areas of customary strandings or groundings.

Customers' extension

An extension of a property insurance policy to cover customers' goods in the insured's custody often subject to the proviso that the insured is responsible for them.

Customs and Excise bonds

Bonds given to the Commissioners of Customs and Excise to secure the eventual payments of duty that has become or may become due.


The date after which a reinsurer is not liable under a reinsurance contract / Separation between buildings so that each is assumed to be a separate fire risk.

Cut-through clause

A clause in a reinsurance contract providing that in the event of the ceding insurer's insolvency the reinsurer will be liable for his share of a loss to the insured and not to the ceding insurer's liquidator.

Cycle insurance

Insurance of cycles against one or more perils, viz., accidental damage, fire, theft and third party liability.


A system of winds blowing spirally inwards towards a centre of low pressure, especially a violent cyclonic wind in the Bay of Bengal, the South West Indian Ocean and Australia; loosely, a hurricane.