Generic

Generic insurance terms

TERMS

Duty of Utmost Good Faith

The legal obligation for both parties to act honestly and fairly in their dealings under the insurance contract

Duty of Disclosure

The obligation to reveal all material facts that could influence the insurer's decision to provide coverage or set terms

Policy

An insurance contract that sets out the terms and conditions of coverage.

Insuring Clause

The policy section that sets out what events are covered under.

Limit of Liability

The maximium an insurer will pay for a covered event.

Exclusions

Events or circumstances that are not covered by the policy.

Notification Obligations

Obligation to promptly notify the insurer (and sometimes regulators) when of any claim, incident or potential liability that could trigger coverage under the policy.

Personal Information

In Australia, "Personal Information" has a specific legal meaning under the Privacy Act 1988 (Cth) and is defined as information or an opinion about an identified individual, or an individual who is reasonably identifiable, whether the information is true or not, and whether it is recorded in a material form or not.

Business Interruption

Loss of income or increased operating costs resulting from disruption to normal business operations caused by a covered cyber event.

Indemnity Period

The Indemnity Period refers to the length of time the insurer will compensate the insured for financial losses following a covered event. This is often used to calculate business interruption losses.

Forensic Costs

Costs incurred to investigate the cause, scope, and impact of a cyber incident.

Incident Response Manager

The individual or service responsible for coordinating the response to a cyber incident.

Discovery Period

A discovery period (also called an "extended reporting period") refers to a specified timeframe after a policy expires during which the insured can still report claims for incidents that occurred during the active policy period but were not discovered until after expiration.

First-Party Cover

First-Party Cover refers to coverage for losses of own assets or property suffered by the insured.

Third-Party Cover

Third-party cover refers to coverage for claims made against an insured by other parties for damages, injuries, or losses the insured is alleged to have caused.

Aggregate Limit

The total ceiling on what the insurer will pay across multiple claims in a policy period.

Quantified Loss

Quantified Loss is the financial loss calculated using documented methodologies and supporting evidence, expressed in specific dollar amounts.

Risk Transfer

The shifting of financial consequences of a potential loss from you to the insurance company through purchasing insurance.

Regulatory Investigation

A formal inquiry by a government authority into potential breaches of laws or regulations.

Sub-limit

A maximum amount the insurance company will pay for a specific type of loss, which is within the overall policy limit.

Service Provider

A third-party vendor that delivers services which the insured relies on operationally or technically.

Policy Limit

The maximum amount payable under a policy for a covered loss.

Business Operations

The day-to-day activities carried out by a company.

Legal Defence Costs

The expenses incurred for legal costs inclurred to defend or investigate a claim.

Reputation Management

Services to protect or restore a business's reputation after a claim or crisis.

Costs

The expenses of investigating and defending claims.

Insured Event

An insured occurrence that triggers policy response.

Employment Related Benefits

Wages, superannuation, or other entitlements due to employees.

Endorsement

A written amendment to an insurance policy.

Extension / Extension of Cover

An additional benefit or broadened coverage in a policy.

Fraudulent Non-Disclosure

Failure to disclose material facts with intent to deceive.

Fraud

Dishonest or deceptive conduct intended for financial gain.

Insurance Premium

Insurance Premium is the amount paid by the insured to the insurer in exchange for coverage under the policy for a specified period.

Loss

Loss is the financial harm, damage, or liability incurred by an insured.

Loss of Income

Loss of Income is a reduction in business earnings or revenue.

Loss of Profits

Shortfall in expected profits.

Excess

The first amount an insured must pay towards a claim before the insurer pays.

Retroactive Date

The earliest date from which a policy will cover past acts or events.

Subrogation

The insurer’s right to recover for monies paid to an insured, from a third party responsible for the loss.

Claims-Made Policy

Cover that is triggered if a claim is made during the policy period, not when the act occurred.

Occurrence based policy

Occurrence based policy is the cover that applies if the incident happens during the policy period, no matter when the claim is made.

Policy Schedule

Policy schedule the document that sets out the specific coverage details for an insured risk.

Period of Insurance

Period of Insurance is the timeframe stated in the policy schedule for which coverage is in effect.

Renewal

Renewal is the process by which an insurance policy is replaced with a new contract for a subsequent period following expiry of the current policy.

Cancellation

Cancellation defines the terminating an insurance policy before expiry.

Insured

Insured is the person or organisation entity covered by the policy.

Sum Insured

Sum Insured is the maximum amount an insurer will pay under a policy for an insured event.

Underinsurance

Underinsurance is when the sum insured is less than the actual value at risk.

Insurer

The company which ultimately provides the policy of insurance and pays for losses covered under the policy.