Uberrima fides

Utmost good faith (q.v.).

Uberrimae fidei

of the utmost good faith.


The natural loss of liquids in cargo.

Ultimate mortality table

A table showing the mortality experienced by lives who have survived at least a given number of years, known as the select period (q.v.).

Ultimate net loss

A ceding insurer's loss calculated for the purpose of a claim under an excess of loss reinsurance. Usually defined as the sum paid by the ceding insurer in settlement of the loss, less deductions for recoveries, salvage and claims on other reinsurances, and including adjustment expenses but not the ceding insurer's office expenses and employees' salaries.

Ultimate table

Same as Ultimate mortality table.

Ultra vires

Beyond the powers.

Umbrella arrangement

An arrangement between a Lloyd's broker and a non-Lloyd's broker whereby business is transacted at Lloyd's by the non-Lloyd's broker using the Lloyd's broker's slips. Also known colloquially as a piggy-back or flag of convenience arrangement.

Umbrella cover

Cover providing excess limits over the normal limits of liability policies and giving additional excess cover for perils not insured by the primary liability policies / In reinsurance, cover against an accumulation of losses under one or more classes of insurance arising out of a single event.

Umbrella liability policy

A comprehensive liability policy.


An arbitration clause in an insurance policy or reinsurance treaty often provides for the appointment of two arbitrators, one by each party to the dispute, and for the arbitrators to agree to appoint a third person, known as an umpire, who will reach a decision if the two arbitrators disagree.

Unauthorised insurance

Insurance by an insurer who has not been admitted to transact business in the state where the insured is situated.


When a policy, e.g., an engineering policy, provides services as well as insurance, and the insurer is willing to provide the services alone, they are said to be unbundled.

Under-average risk

A risk that is considered below the normal standard of its class for the purpose of insurance.


Insurance that is not adequate in terms of the sum insured to provide for full payment of a loss.

Underlying insurance

The original insurance as distinct from an excess insurance / In excess of loss reinsurance the insurance that is below the layer of cover under consideration.

Underlying premium

Same as Base premium.

Undervalued policy

A policy in which the value of the property insured is understated.


An insurer / An individual who determines the acceptability of an insurance and specifies terms for it / A person who solicits business on behalf of an insurer (U.S.).



Underwriting agent

A person authorised to accept insurances on behalf of an insurance company as its agent. At Lloyd's a person who, without himself incurring any underwriting liability, (a) manages an underwriting syndicate (a managing agent) or (b) acts for an underwriting member in all respects other than managing an underwriting syndicate (a members' agent).

Underwriting and claims control clause

A clause in a reinsurance treaty reserving control of underwriting and claims negotiation to the reinsurer.

Underwriting cover

Same as Working cover.

Underwriting profit

The profit derived from the transaction of insurance or reinsurance exclusive of interest on investments.

Unearned premium

Premium in respect of an insurance where the risk has never attached. Where an insurance has attached, that part of the premium that relates to the period of insurance still to run.

Unearned premium insurance

Insurance added to an aviation hull policy to provide for a return of part of the premium if the policy terminates prematurely on the occurrence of a total loss.

Unearned premium reserve

A fund kept by a non-life insurer to provide for claims that may arise in the future under insurances that are still in course. It was formerly common to reserve 40% of premium income but in direct insurance more exact methods now prevail, e.g., the reservation of 1/365 of each premium for every day that the insurance has still to run.

Unemployment insurance

Social insurance providing benefits for periods during which a person is unable to obtain work.

Unexpired risks reserve

See Unearned premium reserve. It is not always sufficient to reserve a proportion of premiums based on the assumption that all insurances run for a year. Contingency insurances, for example, are paid for by a single premium to cover a claim whenever it may arise in the future.

Unfair calling cover

Insurance against the risk that the principal under an unconditional bond will, without good cause, call on the surety to pay.

Unfunded scheme

A scheme where pensions are paid out of current income.

Uninsurable risk

A risk that no insurer will accept. This may be because the hazard is too great or cannot be quantified, or because it is a business risk (q.v.) or a trade risk (q.v.) which an entrepreneur is expected to bear himself.

Uninsured Standing Charges clause

A provision in a business interruption policy that if any standing charges of a business are uninsured a proportionate reduction for a claim for increased cost of working shall be made in their respect.

Uninsured working expenses

Defined in a business interruption policy as purchases, carriage, packing and freight (other than the insured's own) and wages.

United Kingdom limits

Small craft insurance is often confined to United Kingdom limits, namely, the territorial waters of the British Isles.

United Nations Convention on the Carriage of Goods by Sea 1978

This Convention recommended rules, to be known as the Hamburg Rules (q.v.) regulating shipowners' liabilities in respect of cargo.

Unit-linked life assurance

Same as Linked life assurance.

Universal life plan

A flexible form of life assurance where the policyholder may vary from time to time both the premium and the allocation of premium between investment and death risk.

Unless caused by

A marine cargo insurance may provide that a franchise shall apply unless a loss is caused by the vessel and/or craft being stranded, sunk, on fire, in collision and/or contact with any substance, including ice but excluding water.

Unless General

Term used in a marine insurance policy to make it clear that the franchise does not apply to general average.

Unlicensed reinsurance

Reinsurance effected with a reinsurer not licensed to do business in the state concerned.

Unvalued policy

A property insurance policy where the sum insured has not been agreed by the insurer in advance as the actual value of the property. In the event of a loss, therefore, the value is open to discussion with a view to the insured being indemnified against his true loss up to the sum insured.

Up and Down Clause

Same as Escalator Clause.


Increase in the value of benefits from a pension plan arising from a difference between guaranteed and current annuity rates.

Use and occupancy

A form of business interruption insurance (U.S.).

Utmost good faith

Insurance contracts are one of a limited class that requires the parties (insurer and insured) to exercise the utmost good faith in their dealings with each other. Specifically the proposer of an insurance must disclose all material facts which would influence a prudent insurer in deciding whether to accept the insurance and if so on what terms.

Valuation Clause

A clause in a marine insurance hull policy which provides that in ascertaining whether a ship is a constructive total loss (q.v.) the insured value shall be taken as the repaired value and that no claim for constructive total loss based on the cost of recovery and/or repair shall be recoverable unless such cost would exceed the insured value.

Valuation linked scheme

A scheme for the calculation of premiums for the insurance of buildings whereby one rate is applied to the base value of the property and a lower rate to the additional value insured to provide against inflation.


The premium for most property insurances is based on a value of the property estimated by the insured. In marine insurance it is customary to issue valued policies whereby the insurer accepts the insured's valuation in the absence of fraud. In fire insurance unvalued policies are the rule. Insurances on buildings are commonly for reinstatement value. Market value is the guide for other property unless the insurance is written on a reinstatement or new-for-old basis.

Value Added Tax cover

Credit insurance cover applying to the VAT element of sales invoices.

Valued as original

A marine reinsurance term making it clear that the reinsurance policy is a valued policy and that the value is the same as in the original policy though not all the cover is necessarily reinsured.

Valued policy

A policy under which the insurers agree in advance that the value of the property insured, as stated in the policy, shall be conclusively taken as the value, in the event of a total loss, barring fraud or, in the case of cargo, gross over-valuation.

Values at risk

The values of property insured or proposed for insurance.

Values policy

A form of marine reinsurance under which the reinsurer undertakes to pay a fixed amount if a ship in excess of a specified value becomes a total loss.

Variable annuity

An annuity the annual payment of which varies with the level of security prices.


The mean of the squares of the deviations from the mean of a number of observations.

Vending machine insurance

A form of all risks insurance on vending machines.

Vested rights

Provision in a pension scheme for an employee who leaves his employment before he is entitled to a pension to retain a right to a pension ultimately in respect of his pensionable service while a member of the scheme.


Entitlement to a right, e.g., to a reversionary bonus under a life policy.

Violent and forcible means

Theft insurance cover may be restricted to theft following entry to premises by violent and forcible means. The sliding back of the latch of a lock by means of an instrument has been held to be a violent and forcible entry.

Vis major

Same as Force majeure.

Vocational Name

A member of Lloyd's who has signed an undertaking that he will make the business of Lloyd's his vocation.


Without legal effect.


Term used of a contract that may be avoided at the instance of a party to it but if not challenged is effective.

Volenti non fit injuria

The doctrine that a person who willingly takes a risk cannot complain if injury results from it. This defence has been removed in respect of claims by injured passengers in a motor vehicle by the Road Traffic Act 1972, s.148(3).

Voluntary excess

An excess (q.v.) which the insured agrees to bear in consideration of a reduction in premium.

Voyage policy

A marine insurance policy covering a ship for a voyage, as distinct from a time policy.