General Insurance


Balances-Reinsurance Company

The direct insurer will be having transactions with the reinsurance companies either on treaty basis or facultative basis, which will involve premium cessions as well as claim recoveries. This will also have reinsurance commission transactions. All the balances in the reinsurance accounts are grouped under the reinsurance company balances and shown on the assets side or liability side of the balance sheet, depending on the nature of balance.

Back-Up XL Covers

Sometimes it is possible that XL Cover expires before its natural expiry date due to one reinstatement provision exhausting the cover limits by two total losses. Back-Up XL Covers are arranged as additional reinstatement covers for the remaining period.

Baggage insurance

Insurance Policy providing cover against loss of or damage to accompanied personal baggage of the insured or insured's family member(s) due to fire, theft or any accident during the course of journey including stoppage en-route, anywhere in India. The policy normally excludes routine travels like going to and returning from office, theft from unattended vehicle, articles worn on the body of the person, war etc. It is possible that the policy is modified to suit the exact needs of the proposer subject to mutual consent and the insurer following the procedure of "file and use" laid down by the Regulatory Authority.


A person who has legal possession of goods belonging to others and is supposed to take such care of goods as the owner would take. He has the insurable interest in such goods and can insure the same in his name.


Contract concerning transfer of property from bailor to a bailee.


The person who transfers his property to the temporary care, control and custody of another, while retaining the ownership with him.


Material carried in vessel to ensure stability when the vessel is without any cargo.

Bank Guarantee

In relation to Insurance, guarantee executed by a bank in favour of an insurer, guaranteeing payment of premium by the insured in relation to certain policy/policies, within the period stipulated in the guarantee. In India as per the provisions of the Insurance Act and the Rules thereunder Premium shall be physically paid to the insurer in almost all cases on or before the commencement of cover. The Act and the Rules provide that only in cases where the premium is not ascertainable at the time of commencement of cover a bank guarantee shall be accepted by the insurer.

Bankers Indemnity Policy

A specially designed insurance policy for the banks. Main Coverage is against

• Loss/destruction of money and/or securities because of fire, riot and strike terrorism, burglary, whether in the premises or outside, caused by either employees or other persons

• Money and/or securities, whilst in transit, lost, stolen, misappropriated or made away with, either due to negligence, or fraud of the employees of others

• Forgery or alteration committed by employees and outsiders, resulting in financial loss to the bank

• Loss of money or goods held in trust by reason of dishonesty or criminal act of the employees


Smaller size Vessels for carriage of cargo from port to port-most of them used for carrying bulk cargo-some used for carriage from shore to ship. They are either dumb or power driven. They have the risk of capsizing during inclement weather


Wrongful act wilfully committed by the master or crew to the prejudice of the owner or the charterer of the vessel. Deliberate running aground, setting on fire and scuttling of the ship by the crew are instances of barratry. Loss or damage arising from barratry of the ship is covered under ITC-Hulls and ICC (A) Clauses.

Base Premium

Premium charged by the direct insurer on the policy

Basic Commission

The commission on a reinsurance proportional treaty which is always applied on the written premium of the treaty.

Basic Premium

The Gross Premium charged by the insurer to the insured under a policy.

Basic Rate

The rate of premium shown in the Rate Guide or Manual of the Insurance Company for a specific insurance cover.

Basis of Loss Settlement

A separate section inserted in all the policies spelling out the basis of settlement of different types of claims under the policy.

Basis of Valuation Clause

1. Provision describing the method of calculating the value of cargo for the purpose of declaration under marine cargo insurance open covers and open policies.

2. Provision appearing in the conditions relating to the fire declaration policies for stocks, dealing with the valuation of stocks for periodical declaration purposes.


An individual designated in a will to receive an inheritance, or the individual designated to receive the proceeds of an insurance policy, retirement account, trust, or other asset.

Bill of Exchange

It is the bill drawn by exporter against the importer.

Bill of Lading

A bill of lading is a receipt signed on behalf of the ocean carrier, indicating in what apparent order and condition the goods have been received on board. It is not necessarily the complete contract of carriage of goods but is usually the best evidence of the contract. It is also a document of title and thus a document of transfer.

Binder (or binding receipt)

In lines other than life and health, a binder is an acknowledgement (usually from the agent) that insurance applied for is in force whether or not premium settlement has yet been made or the policy issued. In life and health insurance, binders are not issued, but if premium settlement is made with the application, what is often erroneously referred to as a "binder" is issued. Actually this is a conditional binding receipt.

Blanket insurance

(1) Property-liability insurance that covers more than one type of property in one location in one policy or form instead of under separate items, or one or more types of property at more than one location; (2) A contract of health insurance that covers all of a class of persons not individually identified.

Bodily Injury

Physical injury, including sickness, disease, mental injury, shock or death.

Bodily injury liability

The liability which may arise from injury or death of another person.

Boiler and machinery policy

Insurance against loss due to accidents to boilers, pressure vessels or other machinery including the equipment itself, as well as liability arising out of the accident.

Builder's risk coverage form

A commercial property coverage form specifically designed for buildings in the course of construction.

Builder's risk insurance

Insurance against loss to buildings or structures in the course of construction.


It is a theft committed by breaking into or out of the premises. Evidence of breaking in, is necessary.

Burning Ratio

The ratio of losses suffered to the amount of insurance in effect.

Business Interruption Insurance

Insurance for a business owner against losses resulting from stoppage of business because of fire or other insured peril. The insurance provides reimbursement for lost net profits and necessary standing expenses.

Breach of condition

When a condition of the insurance contract is broken by the assured, the insurer may avoid the contract from the inception.


Middleman who represents an insured in the solicitation, negotiation or procurement of contracts of insurance, and who may render services incidental to those functions. He also represents insurer for certain purposes such as delivery of the policy or collection of the premium.