Inapoi

INSURANCE TERMINOLOGY


Da Costa clause

Same as Blood relative clause.

Damaged value

The actual value on arrival at destination of a vessel or goods which have been damaged. For hulls it is taken as the value without any repairs being taken into account. For cargo the gross damaged value is the value of the damaged cargo after landing charges and duty have been paid. Net value is that before payment of landing charges and duty.

Damages

The sum awarded by a court as compensation for loss, damage, injury, or breach of contract. See also General damages and Special damages. Damages for breach of contract may be agreed by the parties in advance and are then known as liquidated damages. Where a defendant has acted outrageously, courts in the U.S.A. may award punitive or exemplary damages by way of punishment. Such damages are rarely available in English courts.

Damnum fatale

(Literally, fatal damage.) Damage caused by a chance event or an inevitable accident for which, since there is no negligence, there may be no liability on the part of a person such as a bailee (q.v.).

Dangerous Wild Animals Act 1976

An Act requiring persons, other than zoos and circuses, who keep dangerous wild animals, to be licensed. One requirement for a licence is the holding of an insurance in respect of third party liability.

Datum level

In credit insurance, a franchise (q.v.).

Datum line cover

Credit insurance which allows the insured to propose a specific debtor for inclusion in the cover only after his indebtedness has attained a certain level, called the datum line.

Days of grace

A period after the renewal date of a policy during which cover continues provided the premium is paid before the end of the period and the insured has not evinced an intention not to renew.

De die in diem

From day to day.

De facto

As a matter of fact.

De jure

As a matter of law.

Death benefit

The sum stated in a policy as payable on the death of the insured / A national insurance benefit for fatal indutrial injuries.

Death strain

The amount paid on death claims less the reserve held on the policies concerned.

Death-in-service benefits

Benefits payable in a pension scheme in respect of an employee who dies while still in service, in the form of either a lump sum or a pension to dependants.

Debenture

A written acknowledgement of a debt, usually one owed by a company and often secured by a charge over all or part of its property.

Debit

The collection of industrial life assurance premiums / The total premiums due to be collected by an industrial life assurance agent.

Debit note

An advice that an account is to be debited with a sum of money.

Debris removal clause

A clause in a fire insurance policy providing for payment of the cost of removing debris after a loss.

Debt

A life policy issued in respect of a substandard life may provide that in the event of early death the sum assured shall be reduced by a specific amount, referred to as a debt.

Decennale liability insurance

Liability insurance for contractors, architects and consulting engineers covering both liability for accidents on the site during a construction period and subsequent liability for collapse or defects for up to 10 years.

Declaration

A statement on a proposal form signed by a proposer affirming certain things, e.g., the truth of the proposer's answers / A periodical statement under a policy with an adjustable premium, giving details of items on which the premium depends, e.g., wages under an employers' liability policy or sendings under a cargo open policy.

Declaration of bonus

Same as Bonus declaration.

Declinature

The refusal by an insurer of a proposed insurance.

Decline list

A list of risks that an insurer will not accept.

Decreasing term assurance

Temporary life assurance under which the sum assured is reduced from time to time.

Deductible

Same as Excess. Allowable as an expense for tax relief.

Deductive item

A pension scheme may relate pensions to pay in excess of a fixed figure, known as the deductive item.

Deed

A written document signed, sealed and delivered.

Deed poll

A deed to which there is only one party.

Defalcation

Same as Embezzlement.

Defamation insurance

Insurance against liability for libel or slander. Cover is commonly effected by publishers of books and newspapers, local authorities and professional persons. Criminal and intentional libels are likely to be excluded and the insured may be required to bear a proportion any claim by way of co-insurance.

Defective Premises Act 1972

An Act imposing liability for defects in premises on landlords, developers, buyers and sellers of buildings, and builders and architects.

Defendant

A party against whom civil proceedings or summary criminal proceedings are brought. In Scots law called the defender.

Defender

see Defendant.

Deferred account

An agreement whereby an insured or reinsured is allowed to pay premiums by instalments.

Deferred annuity

An annuity that does not become payable until some time after its purchase.

Deferred pension

A pension, which will become payable at retirement ages to which a right has accrued. (See Frozen pension.) / A pension not yet payable to a member of a pension fund because he or she has continued working beyond normal retirement age.

Deferred period

A period specified in a permanent health policy that must elapse after disablement occurs before benefit starts to run.

Deferred share

A category of share whose right to dividend arises only after the entitlement of the holders of other classes of share has been met to a defined extent.

Deficit clause

A clause in a reinsurance contract under which profit commission is payable, whereby if the reinsurer makes a loss in any year his deficit is carried forward for the purpose of calculating the profit commission in a subsequent year or years.

Definite advice

A firm statement, following a provisional one, as where, in cargo reinsurance the insurer who has taken a line gives provisional notice to the reinsurer and sends confirmation after a shipment has been made.

Definitive trust deed

A trust deed setting out the full details of a trust.

Del Credere

A guarantee to a seller by an agent selling on credit that the buyer is solvent.

Delegatus non potest delegare

An agent cannot delegate his authority. A general rule, subject to exceptions, in the law of agency.

Delivery

An act done in relation to a deed which has been signed and sealed to evince an intention to be bound by the deed. (Delivery of a deed does not necessarily mean handing it over to the other party.)

Delivery guarantee cover

A form of credit insurance providing compensation if a supplier fails to meet his obligation to deliver.

Demolition value

The value of property sold as only fit for demolition.

Demurrage

Money paid to a shipowner as compensation for the delay of a vessel beyond the period allowed in a charterparty for loading or discharging / Any loss of hire period suffered by a shipowner

Demutualisation

Turning a mutual insurance company into a proprietary company.

Denial of access

Business interruption insurance may be extended to cover loss through denial of access to the insured's premises arising out of a peril insured against.

Department of Trade bonds

Bonds in respect of receivers and liquidators appointed by the Department of Trade and Industry.

Dependant's option

An option in a pension scheme which may allow a member to give up some of his pension in exchange for a pension to a dependant after the member's death.

Dependant's pension

A pension payable to a dependant of a pension scheme member after the member's death.

Deposit

A sum paid on account, e.g., of a premium to be determined later / A sum deposited by an insurer with the authorities in a country to entitle the insurer to transact business in that country / A sum left by a reinsurer in the hands of a direct insurer as security for payment of claims for which the reinsurer may ultimately become liable.

Deposit administration

A system whereby money is held by an insurance company for the ultimate purchase of pensions at retirement age and is increased by interest.

Deposit of Poisonous Waste Act 1972

The Act regulates the deposit of poisonous waste and imposes a liability on the depositor for damage caused.

Deposit premium

A payment in advance as a deposit pending determination of the actual premium.

Deposit society

A friendly society providing sickness and sometimes other benefits, which allocates part of the member's contribution to a deposit account in his name from which withdrawals may be made in accordance with the society's rules.

Depreciation

Loss in value through time.

Determination

Winding up a pension scheme when a trust ceases to exist.

Development risks

Risks attaching to products which could not have been anticipated when the products were launched in the light of scientific or technical knowledge at that time.

Development statistics

A statement by an original insurer showing details of every claim falling within a proposed reinsurance with figures for the amounts paid and outstanding at the end of each year from the date of occurrence until final settlement.

Deviation

The departure of a vessel from the course laid down for it or, if no course has been laid down, from the customary course.

Deviation clause

A clause in a marine hull policy providing that the insured shall not be prejudiced by a deviation that is beyond his control / A clause in a charterparty or bill of lading allowing the vessel to deviate without resultant liability of the carrier to the cargo owner.

Difference in conditions policy

Where a company operating internationally has a number of policies covering similar risks and effected in various countries it may also effect a master policy providing indemnity for claims excluded by a condition found exceptionally in any local policy.

Difference insurance

A fire insurance covering the difference between the value of property at the time of a fire and its reconstruction or replacement value.

Direct action

In English law a third party does not as a rule have a right of direct action against a liability insurer, but in some legal systems he has. But see Third Parties (Rights against Insurers) Act 1930.

Direct business

Insurance placed with an insurer direct and not through an intermediary.

Direct costs

Costs that vary directly with the amount of business transacted.

Direct insurance

Insurance as opposed to reinsurance.

Direct reinsurer

A reinsurer who accepts business directly from an original insurer.

Direct writing

Transacting insurance in direct contact with the public.

Directive

A formal instruction issued by the E.E.C, to its member states requiring each state to align its law in the matters indicated in the directive.

Directors' and Officers' liability insurance

Insurance against the liability of directors and officers of a company in respect of wrongful acts such as negligence, breach of trust or wrongful advice.

Dirty Bill

Same as Claused Bill.

Disability benefit

A right under a life policy, such as entitlement to waiver of premiums, if the policyholder becomes totally disabled.

Disability percentage table

A table showing various disabilities (e.g., loss of an eye or a finger) and the percentage of total disability that each is deemed to represent.

Disablement benefit

Benefit payable under a personal accident, sickness or permanent health insurance in respect of a period during which the insured is unable to follow his occupation in whole or, in some cases, in part.

Disbursements

Payments for expenses: notably, in marine insurance, expenses in running a vessel.

Disbursements Clause

A clause in a marine insurance hull policy defining and restricting the extent to which additional insurances in respect of disbursements, freight etc, may be effected in relation to the ship.

Discharge

A document acknowledging that one whose claim has been settled renounces all rights in that respect / The unloading of cargo from a vessel.

Disclosure

See Duty of Disclosure. A stage in legal proceedings at which the parties to a suit must disclose to each other documents in their respective possession.

Discount

A reduction.

Discounted bonus

The present value of a reversionary bonus.

Discounted bonus policy

A with-profits life assurance policy for which the premium is reduced by part of the expected value of future bonuses.

Discovery cover

A reinsurance treaty which covers losses discovered during the term of the treaty, regardless of when they were sustained.

Discovery period

The period within which a defalcation covered by a fidelity guarantee insurance has to be discovered and notified to the insurers. The period may be longer or shorter than the term of the policy.

Discretionary (endowment) scheme

A scheme for the provision of benefits on retirement of employees in cases where the employer retains a discretion as to who shall join or what benefits shall be provided, the benefits usually being provided by endowment assurance.

Disregard

Same as Deductive item.

Distribution unit

A unit in a unit trust in respect of which the net income from the securities in the trust fund is paid to investors periodically.

Dividend

A payment to a shareholder of his proportion of the profits of a company / A payment to the holder of a life assurance policy of his share of the company's surplus (U.S.).

Dividing society

A friendly society which annually distributes in cash among its members the whole or the bulk of the excess of its income over its expenditure.

Dol

An intentional act which is wrongful or unlawful.

Domestic company

An insurance company established in the country where it is doing business. In the U.S.A. the term is used in each state to describe a company established in that state, a company established elsewhere in the U.S. being described as a foreign company, while a company established outside the U.S. is an alien company.

Donor policy

A life assurance policy effected by one person on the life of and for the benefit of another.

Double endowment assurance

A form of endowment assurance under which the sum payable on maturity is twice that payable on earlier death.

Double indemnity

A provision in a life or personal accident policy that the benefits will be doubled if a claim arises from a particular cause.

Double insurance

More than one insurance on the same risk.

Dread disease cover

Health insurance payable only for specified diseases such as certain types of cancer, heart disease, strokes and kidney failure.

Drencher

A fire prevention appliance which covers a building externally with a curtain of water to prevent fire from spreading from one building to another.

Drive-in claims service

A service offered by some motor insurers whereby motorists can bring damaged cars to the insurers' premises for inspection.

Dual (Wages) basis

A basis for the insurance of wages in a business interruption policy giving the insured full cover against having to pay unproductive wages for one period and more limited cover for a further period.

Dual valuation clause

A clause in a marine hull policy providing one value for a total loss and another for all other purposes.

Due date

The date on which a premium is due for payment.

Duration certificate

A certificate sought by an insurance company from a private medical adviser during the currency of a life or permanent health insurance.

Duty of Assured clause

A clause in marine insurance policies which respects the provisions of the Marine Insurance Act 1906 regarding the duty of the insured to avert or minimise loss, and which requires the insured to preserve all rights against third parties.

Duty of disclosure

A common law duty on the part of a proposer for insurance to disclose to the insurer all material facts, viz., all facts that would influence a prudent insurer in deciding whether to grant the insurance and, if so, on what terms.

Dynamic (or dynamised) pension

A pension the rate of which is automatically increased from time to time on some specified basis, e.g., by 5% per annum.

Inapoi