BIBF Professional Award for Specialist Insurance Practitioner cheat sheet

Insurable interest requires a pecuniary or legally recognised relationship between the insured and the subject matter at the time of loss; without it the contract is unenforceable.

Indemnity restores the insured to the pre-loss financial position; valued policies, reinstatement cover and agreed-value sums displace strict indemnity.

Utmost good faith (uberrimae fidei) imposes a duty of fair presentation on the insured and a duty to underwrite and handle claims in good faith on the insurer.

Proximate cause is the dominant, effective cause linking loss to an insured peril; concurrent causes are resolved by the dominant cause or by the policy's express wording.

Risk classification: pure vs speculative, fundamental vs particular, diversifiable vs non-diversifiable. Only pure, particular, diversifiable risks are conventionally insurable.

Insurability tests: measurable loss, large number of homogeneous exposures, accidental occurrence, calculable probability, and premium that is economically acceptable.

Moral hazard concerns dishonest intent; morale hazard concerns carelessness or indifference. Both are managed through deductibles, conditions and claims investigation.

Risk management sequence: identify, analyse, evaluate, treat (avoid, reduce, retain, transfer), monitor and review.

Pooling converts individual uncertainty into predictable aggregate loss frequency; the law of large numbers improves credibility as exposure count rises.

A contract requires offer, acceptance, consideration, intention to create legal relations, capacity and legality; the premium is the consideration moving from the insured.

Policy documents are construed contra proferentem against the drafter, with words given their ordinary meaning read in context of the whole policy.

Conditions precedent to liability (e.g. notification, record keeping) must be satisfied before the insurer's duty to pay arises; warranties are stricter still.

Subrogation transfers the insured's recovery rights against third parties to the insurer after indemnity is paid, preventing double recovery.

Contribution applies between insurers covering the same interest, peril and period; it is typically apportioned rateably by independent liability or by sum insured.

The doctrine of privity generally confines contractual rights to the parties, subject to statutory exceptions for third-party beneficiaries.

Misrepresentation and non-disclosure remedies are usually proportionate: the insurer may avoid, adjust the claim proportionately, or retain premium depending on culpability.

A deductible reduces the claim payment; a franchise means no payment at all unless the loss exceeds the stated amount.

Limitation periods bar stale claims and vary by jurisdiction and cause of action; contractual time bars in policies can be shorter than statutory limits.

Licensing regimes require insurers, brokers and intermediaries to be authorised before transacting regulated business; unauthorised activity is a criminal or administrative offence.

Solvency frameworks (e.g. risk-based capital regimes) require insurers to hold capital against underwriting, market, credit and operational risk with a defined solvency ratio.

Conduct regulation addresses fair treatment of customers, product governance, disclosure of remuneration, complaints handling and claims transparency.

Anti-money laundering duties include customer due diligence, beneficial ownership identification, sanctions screening and suspicious activity reporting.

Data protection principles: lawful basis, purpose limitation, minimisation, accuracy, retention limits, security and data-subject rights.

Outsourcing and third-party risk rules require due diligence, contractual controls, exit plans and notification to the regulator for material arrangements.

Senior manager and certification regimes allocate prescribed responsibilities to named individuals, with personal accountability for breaches.

Market-conduct reporting and complaints data are used by regulators to benchmark firms; persistent outliers attract supervisory intervention.

Underwriting cycle: soft markets erode rates and widen terms; hard markets tighten capacity, raise rates and restrict cover. Cycle length varies by line.

Technical premium = expected loss cost + expenses + cost of capital + profit margin; loading accounts for volatility and uncertainty.

Risk selection tools: proposal forms, surveys, loss runs, financial statements, credit checks, sanctions screening and site inspections.

Loss ratio = incurred losses / earned premium. Combined ratio = loss ratio + expense ratio. A combined ratio above 100% indicates underwriting loss.

Capacity is constrained by treaty limits, capital, accumulation controls and reinsurance protection; line size is set as a percentage of capacity.

Terms and conditions are used as risk mitigants: deductibles, sub-limits, exclusions, warranties, aggregate limits and claims-cooperation clauses.

Portfolio management uses exposure accumulation modelling, catastrophe scenarios and concentration limits by geography, occupancy and peril.

Referral and authority frameworks: underwriters act within defined binding authorities; risks outside authority escalate to senior or specialist referral.

Claims lifecycle: notification, acknowledgement, coverage verification, reserving, investigation, adjustment, settlement, recovery and closure.

Reserving methods include case reserves, average reserves, development triangles and Bornhuetter-Ferguson or chain-ladder projections for IBNR.

Indemnity settlement options: repair, replacement, reinstatement, cash payment, or salvage disposal; choice depends on policy wording and economics.

Average (underinsurance) applies where the sum insured is less than the value at risk: payment = loss x (sum insured / value at risk).

Salvage and subrogation recoveries reduce net claim cost; salvage rights transfer to the insurer after indemnity is paid.

Fraud indicators: late notification, inconsistent accounts, exaggerated values, staged documentation, unusual policy timing and reluctance to provide records.

Large or complex losses require forensic accounting, engineering assessment, business interruption quantification and specialist adjusters.

Good-faith claims handling obligations include timely communication, reasoned coverage decisions, and fair treatment of vulnerable customers.

Property perils: fire, lightning, explosion, storm, flood, escape of water, theft, impact, subsidence and malicious damage; each has distinct exclusions.

Basis of settlement: reinstatement (new for old), indemnity (market value less depreciation), or agreed value. Reinstatement usually requires rebuilding at the same site.

Average condition, reinstatement memoranda, debris removal, professional fees and increased cost of working extensions are common policy features.

Business interruption insures loss of gross profit or revenue plus increased cost of working following insured physical damage at the premises.

Gross profit = turnover - (cost of raw materials + consumable supplies + other variable costs); often expressed as turnover less specified working expenses.

Rate of gross profit = gross profit / turnover. Claim = rate of gross profit x reduction in turnover + increased cost of working, subject to limits.

Indemnity period is the maximum period over which loss is measured, beginning at the date of damage; it must exceed the realistic restoration period.

Maximum indemnity period selection depends on repair lead times, planning permission, plant replacement and market recovery time.

Denial-of-access, loss of attraction, utility failure and supplier/customer extensions cover consequential loss without physical damage to the insured's own property.

Public liability covers third-party bodily injury and property damage arising from the insured's business; product liability covers goods supplied.

Employers' liability covers injury to employees arising out of employment; statutory schemes may mandate minimum cover.

Occurrence policies respond to injury or damage occurring during the policy period regardless of when claimed; claims-made policies respond to claims first made and notified during the period.

Retroactive dates on claims-made policies define how far back cover extends; a retroactive date of inception excludes prior acts.

Aggregate limits cap total payments in a period; reinstatement of limits may be automatic or purchased.

Professional indemnity covers negligent advice or services; coverage typically excludes deliberate wrongdoing, insolvency and contractual penalties.

Directors' and officers' liability covers wrongful acts in a managerial capacity, with exclusions for fraud, personal profit and prior-known circumstances.

Liability reserving must consider long-tail development, inflation of awards, legal costs and the potential for multiple claimants per occurrence.

Marine hull and machinery covers physical damage to vessels; cargo covers goods in transit; P&I covers third-party liabilities including crew injury and pollution.

Institute Cargo Clauses A, B and C provide all-risks, named-perils and restricted named-perils coverage respectively, with war and strikes usually separate.

Incoterms allocate risk and cost between buyer and seller; the point of risk transfer determines who must insure and for what period.

General average requires cargo interests to contribute proportionately to a voluntary sacrifice or expenditure to save the adventure.

Particular average is partial damage borne by the owner of the damaged property; total loss may be actual or constructive.

Aviation hull and liability policies cover aircraft damage and third-party or passenger liabilities, with strict airworthiness and crew-licensing warranties.

Transport cover includes carrier's liability, freight forwarder's liability and stock throughput for goods moving through the supply chain.

Marine warranties (seaworthiness, class, trading limits) are conditions of cover; breach discharges the insurer from liability from the date of breach.

Cyber cover typically combines first-party (data restoration, business interruption, incident response) and third-party (privacy, network security liability) elements.

Cyber exclusions and sub-limits address systemic events, infrastructure failure, war, and silent cyber in traditional property and liability policies.

Construction: contractors' all risks (CAR) covers works, plant and third-party liability during construction; erection all risks (EAR) covers installation projects.

Construction covers typically include testing and commissioning, maintenance periods, defects liability and delay-in-start-up extensions.

Energy insurance splits into upstream (exploration and production), midstream (transport) and downstream (refining and retail), with distinct perils.

Political violence, terrorism and war covers address confiscation, sabotage, riot and civil commotion, often with government-backed reinsurance schemes.

Specialty lines include fine art, specie, contingency, event cancellation, trade credit, surety, and warranty and indemnity for transactions.

Emerging risk assessment must consider aggregation, model uncertainty, silent cover, and contractual liability for intangible assets such as data.

Facultative reinsurance is placed risk by risk; treaty reinsurance covers a defined portfolio automatically under agreed terms.

Proportional treaties: quota share (fixed percentage of premium and loss) and surplus (shares above a retained line).

Non-proportional treaties: excess of loss (layer above a retention) and stop loss (aggregate loss ratio protection).

Ceding commission compensates the cedant for acquisition costs; profit commission shares favourable treaty results.

Reinstatement provisions restore exhausted excess-of-loss cover, usually for an additional premium calculated pro rata.

Reinsurance recoveries are assets subject to credit risk; collateral, letters of credit and rated reinsurers mitigate counterparty exposure.

Follow-the-settlements and follow-the-fortunes clauses bind the reinsurer to the cedant's good-faith claim settlements.

Retention selection balances cost of reinsurance against volatility and capital relief; net retention drives the cedant's risk appetite.

Aggregation and clash covers protect against accumulation from a single event affecting multiple policies or lines.

Core functions: product development, pricing, underwriting, policy administration, claims, finance, actuarial, compliance and distribution.

Premium accounting distinguishes written premium, earned premium (pro rata over the policy term) and unearned premium reserve.

Distribution channels include brokers, agents, direct and digital; each carries different conduct, remuneration and disclosure obligations.

Bordereaux are schedules of risks or claims used for treaty reporting, premium settlement and reinsurance recovery.

Key performance indicators: retention rate, new business conversion, loss ratio, expense ratio, claims cycle time and complaints ratio.

Operational resilience requires business continuity plans, tested disaster recovery, and controls over critical third-party providers.

Financial reporting for insurers covers technical provisions, deferred acquisition costs, investment return and solvency capital position.

Complaints handling must follow defined timeframes, root-cause analysis and escalation to the ombudsman or regulator where unresolved.

Acting with integrity means honest disclosure to clients, insurers and regulators, including prompt reporting of errors and conflicts.

Conflicts of interest must be identified, disclosed and managed; placing business with an affiliated insurer requires clear client consent.

Client money rules require segregation, reconciliation and statutory trust arrangements to protect premium and claim funds.

Competence obligations require practitioners to work within their expertise and to maintain continuing professional development.

Confidentiality duties restrict use of client information to the purpose for which it was provided, subject to legal and regulatory disclosure.

Fair treatment of customers includes clear communication, suitable products, transparent pricing and fair complaint outcomes.

Whistleblowing and speaking-up duties require reporting of suspected wrongdoing to the appropriate internal or regulatory channel.

Remuneration transparency: commissions, fees and profit shares must be disclosed so clients understand how the adviser is paid.

Insurable interest must exist at inception for property and at the time of loss for life; absence renders the contract unenforceable.

Indemnity restores the insured to the pre-loss financial position; valued and reinstatement policies displace strict indemnity.

Proximate cause is the dominant and effective cause of loss; where causes are concurrent, policy wording or the dominant cause decides.

Insurability requires measurable accidental loss, a large pool of homogeneous exposures, calculable probability and an acceptable premium.

Moral hazard reflects dishonest intent; morale hazard reflects carelessness. Deductibles and conditions mitigate both.

Risk treatment options are avoidance, reduction, retention and transfer; insurance is a transfer mechanism, not elimination of risk.

The law of large numbers improves loss predictability as the number of independent similar exposures increases.

Pure risks have only loss or no-loss outcomes; speculative risks involve gain or loss and are generally uninsurable.

A valid contract needs offer, acceptance, consideration, intention, capacity and legality; the premium is the insured's consideration.

Policy wording is construed contra proferentem against the drafter, with words given their ordinary meaning in context.

Conditions precedent to liability must be met before the insurer pays; warranties are stricter and breach discharges liability.

Subrogation transfers the insured's third-party recovery rights to the insurer after indemnity, preventing double recovery.

Contribution applies between insurers covering the same interest, peril and period, usually apportioned rateably.

Misrepresentation remedies are typically proportionate: avoidance, proportionate adjustment of claim, or retention of premium depending on culpability.

A deductible reduces the claim payment; a franchise means no payment unless the loss exceeds the stated amount.

Limitation periods and contractual time bars restrict late claims and vary by jurisdiction and cause of action.

Authorisation is required before transacting regulated insurance business; unauthorised activity is an offence.

Risk-based capital regimes require capital against underwriting, market, credit and operational risk with a defined solvency ratio.

Conduct rules require fair treatment of customers, product governance, remuneration disclosure and transparent claims handling.

AML duties include customer due diligence, beneficial ownership checks, sanctions screening and suspicious activity reporting.

Data protection principles are lawful basis, purpose limitation, minimisation, accuracy, retention limits, security and data-subject rights.

Material outsourcing requires due diligence, contractual controls, exit plans and regulator notification.

Senior manager regimes allocate prescribed responsibilities to named individuals with personal accountability.

Complaints and conduct data are used by regulators to benchmark firms and target supervisory intervention.

Technical premium = expected loss cost + expenses + cost of capital + profit margin, with loadings for volatility.

Loss ratio = incurred losses / earned premium; combined ratio = loss ratio + expense ratio. Above 100% indicates underwriting loss.

Soft markets erode rates and widen terms; hard markets raise rates, restrict cover and tighten capacity.

Risk selection uses proposal forms, surveys, loss runs, financial statements, credit checks, sanctions screening and inspections.

Capacity is constrained by treaty limits, capital, accumulation controls and reinsurance protection; line size is a percentage of capacity.

Terms used as mitigants include deductibles, sub-limits, exclusions, warranties, aggregates and claims-cooperation clauses.

Portfolio management uses catastrophe scenarios and concentration limits by geography, occupancy and peril.

Binding authorities define underwriter limits; risks outside authority escalate to senior or specialist referral.

Claims lifecycle: notification, acknowledgement, coverage verification, reserving, investigation, adjustment, settlement, recovery and closure.

Reserving uses case reserves, average reserves, development triangles and chain-ladder or Bornhuetter-Ferguson projections for IBNR.

Settlement options are repair, replacement, reinstatement, cash payment or salvage disposal, depending on wording and economics.

Average (underinsurance): payment = loss x (sum insured / value at risk).

Salvage and subrogation recoveries reduce net claim cost; salvage rights transfer to the insurer after indemnity.

Fraud indicators include late notification, inconsistent accounts, exaggerated values, staged documents and unusual policy timing.

Large losses require forensic accounting, engineering assessment and specialist adjusters for quantification.

Good-faith handling requires timely communication, reasoned coverage decisions and fair treatment of vulnerable customers.

Property perils include fire, lightning, explosion, storm, flood, escape of water, theft, impact and subsidence, each with distinct exclusions.

Basis of settlement is reinstatement, indemnity or agreed value; reinstatement usually requires rebuilding at the same site.

Common extensions include average waiver, debris removal, professional fees and increased cost of working.

Business interruption covers loss of gross profit plus increased cost of working following insured physical damage.

Gross profit = turnover - (raw materials + consumable supplies + other variable costs).

Rate of gross profit = gross profit / turnover; claim = rate x reduction in turnover + increased cost of working, subject to limits.

The indemnity period starts at the date of damage and caps the measurement window; it must exceed realistic restoration time.

Extensions cover denial of access, loss of attraction, utility failure and supplier or customer disruption without damage to the insured's property.

Public liability covers third-party injury and property damage from the insured's business; product liability covers goods supplied.

Employers' liability covers employee injury arising out of employment; statutory minimum cover may apply.

Occurrence policies respond to injury or damage during the period; claims-made policies respond to claims first made and notified in the period.

Retroactive dates on claims-made policies determine how far back cover extends; inception retroactive dates exclude prior acts.

Aggregate limits cap total payments in a period; reinstatement may be automatic or purchased.

Professional indemnity covers negligent services, excluding deliberate wrongdoing, insolvency and contractual penalties.

D&O covers wrongful acts in a managerial capacity, excluding fraud, personal profit and prior-known circumstances.

Long-tail reserving must allow for inflation of awards, legal costs and multiple claimants per occurrence.

Hull and machinery covers vessel damage; cargo covers goods in transit; P&I covers third-party liabilities including pollution.

Institute Cargo Clauses A, B and C provide all-risks, named-perils and restricted named-perils cover; war and strikes are separate.

Incoterms allocate risk and cost between buyer and seller and determine who insures and for what period.

General average requires cargo interests to contribute proportionately to a voluntary sacrifice or expenditure saving the adventure.

Particular average is partial damage borne by the owner; total loss may be actual or constructive.

Aviation hull and liability policies carry strict airworthiness, crew-licensing and trading-warranty conditions.

Transport cover includes carrier's liability, forwarder's liability and stock throughput across the supply chain.

Marine warranties such as seaworthiness, class and trading limits discharge the insurer from breach date if broken.

Cyber cover combines first-party elements (data restoration, business interruption, incident response) with third-party privacy and network liability.

Cyber exclusions and sub-limits address systemic events, infrastructure failure, war and silent cyber in property and liability policies.

Construction: contractors' all risks covers works, plant and third-party liability; erection all risks covers installation projects.

Construction extensions include testing and commissioning, maintenance periods, defects liability and delay in start-up.

Energy insurance splits into upstream, midstream and downstream, each with distinct perils and accumulation profiles.

Political violence, terrorism and war covers address confiscation, sabotage and riot, often backed by government reinsurance schemes.

Specialty lines include fine art, specie, contingency, event cancellation, trade credit, surety and warranty and indemnity.

Emerging risk assessment must address aggregation, model uncertainty, silent cover and liability for intangible assets such as data.

Facultative reinsurance is placed risk by risk; treaty reinsurance covers a defined portfolio automatically.

Proportional treaties are quota share (fixed percentage of premium and loss) and surplus (shares above a retained line).

Non-proportional treaties are excess of loss (layer above retention) and stop loss (aggregate loss ratio protection).

Ceding commission compensates acquisition costs; profit commission shares favourable treaty results with the cedant.

Reinstatement provisions restore exhausted excess-of-loss cover, usually for additional premium calculated pro rata.

Reinsurance recoveries carry credit risk; collateral, letters of credit and rated reinsurers mitigate exposure.

Follow-the-settlements and follow-the-fortunes clauses bind reinsurers to good-faith cedant settlements.

Retention selection balances reinsurance cost against volatility and capital relief; net retention drives risk appetite.

Aggregation and clash covers protect against a single event affecting multiple policies or lines.

Core functions are product development, pricing, underwriting, policy administration, claims, finance, actuarial, compliance and distribution.

Written premium, earned premium (pro rata over the term) and unearned premium reserve are distinct accounting measures.

Distribution channels include brokers, agents, direct and digital, each with different conduct and disclosure obligations.

Bordereaux are schedules of risks or claims used for treaty reporting, premium settlement and reinsurance recovery.

KPIs include retention rate, conversion, loss ratio, expense ratio, claims cycle time and complaints ratio.

Operational resilience requires tested business continuity, disaster recovery and controls over critical third parties.

Insurer financial reporting covers technical provisions, deferred acquisition costs, investment return and solvency capital.

Complaints handling requires defined timeframes, root-cause analysis and escalation to the ombudsman or regulator.

Integrity requires honest disclosure to clients, insurers and regulators, including prompt reporting of errors and conflicts.

Conflicts of interest must be identified, disclosed and managed; affiliated-insurer placement requires clear client consent.

Client money rules require segregation, reconciliation and statutory trust arrangements for premium and claim funds.

Competence obligations require working within expertise and maintaining continuing professional development.

Confidentiality restricts use of client information to the purpose provided, subject to legal and regulatory disclosure.

Fair treatment of customers includes clear communication, suitable products, transparent pricing and fair complaint outcomes.

Speaking-up duties require reporting suspected wrongdoing through internal or regulatory whistleblowing channels.

Remuneration transparency requires disclosure of commissions, fees and profit shares so clients understand adviser payment.

Insurable interest is a pecuniary or legally recognised relationship with the subject matter; without it the contract is unenforceable.

Indemnity restores the pre-loss financial position; valued policies and reinstatement cover displace strict indemnity.

Utmost good faith imposes fair presentation on the insured and good-faith underwriting and claims handling on the insurer.

Proximate cause is the dominant effective cause of loss; concurrent causes are resolved by dominant cause or express wording.

Risk classification distinguishes pure from speculative, fundamental from particular, and diversifiable from non-diversifiable risk.

Insurability tests are measurable loss, homogeneous exposures, accidental occurrence, calculable probability and acceptable premium.

Moral hazard concerns dishonest intent; morale hazard concerns carelessness. Deductibles and conditions mitigate both.

Risk management sequence: identify, analyse, evaluate, treat (avoid, reduce, retain, transfer), monitor and review.

Pooling converts individual uncertainty into predictable aggregate loss frequency through the law of large numbers.

Contract formation requires offer, acceptance, consideration, intention, capacity and legality; premium is the insured's consideration.

Policy wording is construed contra proferentem against the drafter, with ordinary meaning read in context.

Conditions precedent to liability must be satisfied before payment; warranties are stricter and breach discharges liability.

Subrogation transfers the insured's recovery rights against third parties to the insurer after indemnity is paid.

Contribution applies between insurers covering the same interest, peril and period, typically apportioned rateably.

Misrepresentation remedies are proportionate: avoidance, proportionate claim adjustment, or premium retention depending on culpability.

A deductible reduces the claim payment; a franchise means no payment unless loss exceeds the stated amount.

Limitation periods and contractual time bars restrict late claims and vary by jurisdiction and cause of action.

Insurers, brokers and intermediaries must be authorised before transacting regulated business; unauthorised activity is an offence.

Risk-based solvency regimes require capital against underwriting, market, credit and operational risk with a defined solvency ratio.

Conduct regulation covers fair treatment, product governance, remuneration disclosure, complaints handling and claims transparency.

AML duties include customer due diligence, beneficial ownership identification, sanctions screening and suspicious activity reporting.

Data protection principles are lawful basis, purpose limitation, minimisation, accuracy, retention limits, security and data-subject rights.

Material outsourcing requires due diligence, contractual controls, exit plans and regulator notification.

Senior manager regimes allocate prescribed responsibilities to named individuals with personal accountability for breaches.

Market-conduct and complaints data benchmark firms; persistent outliers attract supervisory intervention.

Technical premium = expected loss cost + expenses + cost of capital + profit margin, with loadings for volatility and uncertainty.

Loss ratio = incurred losses / earned premium; combined ratio = loss ratio + expense ratio. Above 100% is an underwriting loss.

Soft markets erode rates and widen terms; hard markets raise rates, restrict cover and tighten capacity.

Risk selection tools include proposal forms, surveys, loss runs, financial statements, credit checks, sanctions screening and inspections.

Capacity is constrained by treaty limits, capital, accumulation controls and reinsurance; line size is a percentage of capacity.

Terms as mitigants include deductibles, sub-limits, exclusions, warranties, aggregate limits and claims-cooperation clauses.

Portfolio management uses catastrophe scenarios and concentration limits by geography, occupancy and peril.

Binding authorities define underwriter limits; risks outside authority escalate to senior or specialist referral.

Claims lifecycle: notification, acknowledgement, coverage verification, reserving, investigation, adjustment, settlement, recovery and closure.

Reserving methods include case reserves, average reserves, development triangles and chain-ladder or Bornhuetter-Ferguson IBNR projections.

Settlement options are repair, replacement, reinstatement, cash payment or salvage disposal, depending on wording and economics.

Average (underinsurance): payment = loss x (sum insured / value at risk).

Salvage and subrogation recoveries reduce net claim cost; salvage rights transfer to the insurer after indemnity is paid.

Fraud indicators include late notification, inconsistent accounts, exaggerated values, staged documents and unusual policy timing.

Large or complex losses require forensic accounting, engineering assessment and specialist adjusters.

Good-faith handling requires timely communication, reasoned coverage decisions and fair treatment of vulnerable customers.

Property perils include fire, lightning, explosion, storm, flood, escape of water, theft, impact and subsidence, each with distinct exclusions.

Basis of settlement is reinstatement, indemnity or agreed value; reinstatement usually requires rebuilding at the same site.

Common features include average conditions, reinstatement memoranda, debris removal, professional fees and increased cost of working.

Business interruption covers loss of gross profit plus increased cost of working following insured physical damage at the premises.

Gross profit = turnover - (raw materials + consumable supplies + other variable costs).

Rate of gross profit = gross profit / turnover; claim = rate x reduction in turnover + increased cost of working, subject to limits.

The indemnity period begins at the date of damage and caps measurement; it must exceed realistic restoration time.

Extensions cover denial of access, loss of attraction, utility failure and supplier or customer disruption without damage to the insured's property.

Public liability covers third-party injury and property damage from the business; product liability covers goods supplied.

Employers' liability covers employee injury arising out of employment; statutory minimum cover may apply.

Occurrence policies respond to injury or damage during the period; claims-made policies respond to claims first made and notified in the period.

Retroactive dates on claims-made policies define how far back cover extends; an inception retroactive date excludes prior acts.

Aggregate limits cap total payments in a period; reinstatement of limits may be automatic or purchased.

Professional indemnity covers negligent advice or services, excluding deliberate wrongdoing, insolvency and contractual penalties.

D&O covers wrongful acts in a managerial capacity, excluding fraud, personal profit and prior-known circumstances.

Long-tail reserving must allow for award inflation, legal costs and multiple claimants per occurrence.

Hull and machinery covers vessel damage; cargo covers goods in transit; P&I covers third-party liabilities including pollution.

Institute Cargo Clauses A, B and C provide all-risks, named-perils and restricted named-perils cover; war and strikes are separate.

Incoterms allocate risk and cost between buyer and seller and determine who insures and for what period.

General average requires cargo interests to contribute proportionately to a voluntary sacrifice or expenditure saving the adventure.

Particular average is partial damage borne by the property owner; total loss may be actual or constructive.

Aviation hull and liability policies carry strict airworthiness, crew-licensing and trading-warranty conditions.

Transport cover includes carrier's liability, forwarder's liability and stock throughput across the supply chain.

Marine warranties such as seaworthiness, class and trading limits discharge the insurer from breach date if broken.

Cyber cover combines first-party (data restoration, business interruption, incident response) and third-party (privacy, network liability) elements.

Cyber exclusions and sub-limits address systemic events, infrastructure failure, war and silent cyber in property and liability policies.

Construction: contractors' all risks covers works, plant and third-party liability; erection all risks covers installation projects.

Construction extensions include testing and commissioning, maintenance periods, defects liability and delay in start-up.

Energy insurance splits into upstream, midstream and downstream, each with distinct perils and accumulation profiles.

Political violence, terrorism and war covers address confiscation, sabotage and riot, often backed by government reinsurance schemes.

Specialty lines include fine art, specie, contingency, event cancellation, trade credit, surety and warranty and indemnity.

Emerging risk assessment must address aggregation, model uncertainty, silent cover and liability for intangible assets such as data.

Facultative reinsurance is placed risk by risk; treaty reinsurance covers a defined portfolio automatically under agreed terms.

Proportional treaties are quota share (fixed percentage of premium and loss) and surplus (shares above a retained line).

Non-proportional treaties are excess of loss (layer above retention) and stop loss (aggregate loss ratio protection).

Ceding commission compensates acquisition costs; profit commission shares favourable treaty results with the cedant.

Reinstatement provisions restore exhausted excess-of-loss cover, usually for additional premium calculated pro rata.

Reinsurance recoveries are assets subject to credit risk; collateral, letters of credit and rated reinsurers mitigate exposure.

Follow-the-settlements and follow-the-fortunes clauses bind reinsurers to good-faith cedant claim settlements.

Retention selection balances reinsurance cost against volatility and capital relief; net retention drives risk appetite.

Aggregation and clash covers protect against a single event affecting multiple policies or lines.

Core functions are product development, pricing, underwriting, policy administration, claims, finance, actuarial, compliance and distribution.

Written premium, earned premium (pro rata over the policy term) and unearned premium reserve are distinct accounting measures.

Distribution channels include brokers, agents, direct and digital, each carrying different conduct and disclosure obligations.

Bordereaux are schedules of risks or claims used for treaty reporting, premium settlement and reinsurance recovery.

KPIs include retention rate, new business conversion, loss ratio, expense ratio, claims cycle time and complaints ratio.

Operational resilience requires tested business continuity, disaster recovery and controls over critical third-party providers.

Insurer financial reporting covers technical provisions, deferred acquisition costs, investment return and solvency capital position.

Complaints handling requires defined timeframes, root-cause analysis and escalation to the ombudsman or regulator.

Integrity requires honest disclosure to clients, insurers and regulators, including prompt reporting of errors and conflicts.

Conflicts of interest must be identified, disclosed and managed; affiliated-insurer placement requires clear client consent.

Client money rules require segregation, reconciliation and statutory trust arrangements for premium and claim funds.

Competence obligations require working within expertise and maintaining continuing professional development.

Confidentiality restricts use of client information to the purpose provided, subject to legal and regulatory disclosure.

Fair treatment of customers includes clear communication, suitable products, transparent pricing and fair complaint outcomes.

Speaking-up duties require reporting suspected wrongdoing through internal or regulatory whistleblowing channels.

Remuneration transparency requires disclosure of commissions, fees and profit shares so clients understand adviser payment.