An insurance Risk Library to help you demystify the complexities of insurance

Insurance of the Insureds legal Liability to another person/entity

Insurance which is based on Indemnity to the Insured as opposed to Third Party insurance which covers the Insured's legal Liability to another person/entity

This is a form of partial insurance where the Insured decides that it is extremely unlikely he could suffer a Total Loss and therefore selects a Sum Insured which reflects the estimated maximum probable loss any one time. First Loss policies are free of Underinsurance (Average) penalties

Compensation paid by the insurer out of sympathy (not out of obligation) in terms of a loss suffered by the Insured which is not covered in terms of the Insurance Contract

A controlled method (usually by way of a fixed percentage) of increasing the value of the insured property, during the Period of Insurance, given the exponential increase in Reinstatement / Replacement Costs over a period of time. This is an effective way of reducing the possibility of Underinsurance applying to your claim

A Policy which covers property which runs on low tension power e.g. computer, faxes etc

A duty, imposed by our Common Law, on the part of the Insured to disclose all Material Facts relating to the proposed Risk

Also termed E-Insurance. Legal Liability and First Party losses may arise from a variety of causes given the proliferation of computers. The following are typical exposures all businesses face in this Age of Technology: Web site content, unauthorised access (hackers), viruses transmitted to Third Parties, business to business exposures to name but a few

A hold harmless is an agreement between two parties that obligates one party to protect another against certain risks of legal Liability. A word of caution though you need to ensure that you are not creating Contractual Liability which increases your insurers Liability Risk beyond Common Law. If so, you run the risk of your insurer rejecting Liability losses arising out of your hold harmless agreement as these losses would then be of a contractual nature

This endorsement adds another Insured to your Insurance Policy. The person or party that is added then is entitled to compensation in terms of your Policy Contract

Legal Liability which arises out of Contract, as distinct from Common and Statute Law

Legal Liability which arises out of law based on judicial decisions (precedents) and custom, as distinct from Statute Law

Insurance against financial loss, other than property loss, arising from an Insured Peril

Employees who suffer occupational injury/death are precluded from suing their employers in terms of current legislation. They are compelled to seek relief via the COID commissioner. The employer on the other hand is compelled by law to register and pay the commensurate fees for all employees as defined in the Act. Failure to do so renders the employer liable to pay staunch penalties in addition to the possibility of compensating the unregistered employees for occupational injury/death

A Liability Policy that only covers claims reported during the currency of the Policy which occur on or after the Retroactive Date stated in the Policy

The direct, dominant cause of a loss not the remote cause. The insurer is only liable if the Proximate Cause of the loss claimed for was an Insured Peril

The natural person or legal entity named as the Policyholder/Insured in the Policy Contract who is entitled to compensation, providing they have an Insurable Interest in the insured property

The act of placing you, the Insured, in the same financial position you enjoyed before the loss. Factors like Underinsurance, inadequate Sums Insured and Excesses can deprive you of receiving a full Indemnity

If you underinsure your assets in terms of the basis of valuation stipulated in your Insurance Contract (e.g. Full New Replacement Value VAT inclusive) then insurers will deduct the percentage of underinsurance off your claim. For example, if you insure 75% of the Full Value at Risk, insurers will deduct 25% off your claim for Underinsurance

Only events which are sudden and unforeseeable are covered as they are accidental in nature. Inevitable events, like Wear & Tear, are thus not insurable as it is inevitable that property will depreciate over time

An act which is beyond human control e.g. storm, earthquake etc