General Insurance



A sale contract under which the seller has the responsibility of placing the cargo on board and also incurs the ocean freight and obtain the bill of lading. It is for the buyer to arrange for an insurance cover for the voyage and until the cargo reaches the destination.


A sale contract under which the seller is obliged to place the cargo on board the ship, pay the ocean freight and arrange insurance cover for the cargo during the voyage and until the cargo reaches the destination. He should arrange the insurance cover upon terms current in the trade, which will be for the benefit of the buyer. Seller should then arrange immediate delivery of all relevant documents including the Insurance Policy for the requirements and benefit of the buyer.


Consignments in a completely knocked down condition, which are assembled at destination to be made into whole units.


Consignments in a completely knocked down condition which are assembled at destination to be made into whole units.


Commodities like Sugar, Flour or Cement tend to get caked because of water absorption from the air. Marine Cargo Insurance Policies for such cargo, providing even widest coverage normally exclude caking risk, unless caused by a direct contact with water.

Calendar Year Experience

Business results during a calendar year analysed and experience studied on a calendar year basis.


The discontinuance of an insurance policy before its normal expiry date stipulated in the policy

Cancellation Clause

The clause appears in most of the period policies. This gives the privilege to both the insurer and the insured to cancel the policy if they don’t want the same to continue until the normal date of expiry. The conditions of cancellation differ among different policies. The exact provision in respect of a particular policy will be found incorporated in the policy.

Cancellation of Insurance-Motor

A policy can be cancelled only after ensuring that the vehicle is insured elsewhere and the original Certificate of Insurance of the policy that is cancelled is surrendered. Insurer should inform the Regional Transport Authority by registered A.D. about the cancellation of the insurance.

Cancellation of Treaty

A clause in the treaty reinsurance wording which outlines the procedure for termination of the obligations under the treaty by both the cedent and the reinsurer.

Cancellation Returns Only

Refund by the Marine Hull Insurers of pro-rata monthly premium for each un-commenced month of the policy when the policy is cancelled before the normal expiry date by mutual agreement between the insured and the insurer.


(1) The amount of capital available to an insurance company for underwriting general insurance coverage or coverage for specific perils.

(2) The amount of insurance a company is able to write, due to limitations on or availability of capital.

Capacity of the parties to contract

One of the essential elements for a contract to be legally valid. Applicable to insurance contracts also. Every person should be major by age, of sound mind and not disqualified by any law to which he is subject in order that he is considered competent to contract. Insurer also must have legal capacity to contract.

Capital- Authorized

This represents the shareholders contribution towards the capital of the company

Capital- Paid up

This represents the maximum amount up to which the company can raise capital by way of issue of various types of shares. This amount is fixed while incorporating the company and can be changed by following the procedure prescribed in the companies Act.

Capital, Share

Out of the authorized capital the company may choose to issue shares only to some extent. The portion for which shares are issued and allotted is called the Issued Capital. Out of the issued capital also the company may collect the entire amount of the shares in one or two stages which are called calls. So the amount, which the shareholders have been called to pay is called the Called up capital. Out of the called up amount also some shareholders might not have paid the amount due and hence the amount, which is actually paid by the shareholders is called the Paid up capital of the company. In normal parlance the capital of a company will refer to the paid up capital only.

Capital Sum Insured

The term used in personal Accident Insurance policies to denote the sum payable under the policy for death or Loss of Two Limbs or Two eyes or for other Permanent Total disablement. Insurer normally tends to limit this sum with regard to individual persons based on the earning capacity of such persons in order that the persons do not over insure for their advantage.

Captain's protest

When the ship encounters heavy weather or any other accident or that the cargo suffers some accidental damages Captain of the Ship signs a declaration giving details of the accident and damage. This he does mainly to avoid any claim that may be lodged at a later date against the Ship management for negligence. This declaration is called Captains Protest. This document is requisitioned by the insurer in case of a claim for heavy weather damage to the insured cargo.

Captive Insurance Company

A company formed solely to insure the risks of its own parent company and all units coming within the group, with the primary objective of

  • Providing the specific insurance covers for the group

  • Achieving reduction in cost and also save on the tax angle

  • Securing best of terms from the international market and

  • Directly obtaining investment return on its invested capital.


Glass containers protected by basket work for liquid cargo shipments, particularly acids.

Cargo Insurance

Insurance of all types of goods and merchandise in transportation by Sea, Air, Rail or Road Transport where such goods or merchandise are transported under Contract of affreightment.

Cargo Plan

Plan depicting space in a ship occupied by cargo.

Cargo Thefts (Maritime Frauds)

One of the major causes of maritime frauds. These are caused by the owners of the ships who are paper companies, deviating the route, after taking the cargo on board and discharging them into a Port of Convenience, by using falsely registered vessels. Thefts are also caused by the collusion between the shipper and the consignee by tampering of the cargo either on board the vessel or at the terminal point at destination port and stealing the cargo and later putting a claim on consignee's insurer.

Carriage by Air Act, 1972 – Claim on Air Carrier

As per Section 26 of the Act, in case of loss or damage to luggage complaint should be lodged with the carrier within three days of discovery of such loss/damage and in case of goods the period for reporting is within seven days. Failure on the part of the owner or the person entitled to delivery shall result in no action lying against the carrier.

Carriage by Air Act, 1972– Defence of Carrier

As per Section 20 of the Act, the carrier is not liable if he proves that he and his agents have taken all necessary measures to avoid the damage or that it was impossible for him or them to take such measures. The carrier is also not liable if he proves that the damage was occasioned by negligent pilotage or negligence in the handling of aircraft.

Carriage by Air Act, 1972– Liability of Air carrier

As per Section 18 of the Act, the Carrier is liable for damage sustained in the event of the destruction or loss of, or damage to, any registered luggage or any goods, if the occurrence which caused the damage so sustained took place during the carriage by air. The term carriage includes the period during which the luggage or goods are in charge of the carrier, whether in an aerodrome or on board an aircraft.

Carriage by Air Act, 1972– Limitation of Liability

As per Section 22 of the Act, for registered luggage and goods the liability of the carrier is limited to 250 francs per kilogramme unless the actual value of the goods were declared to the carrier by the goods owner when the goods were handed over for carriage.

Carriage by Air Act, 1972– Time Limit for Suit

As per Section 29 of the Act, the right of recovery for loss or damage shall be extinguished if an action against the carrier is not brought within two years reckoned from the date of arrival of the aircraft at destination or the date on which it ought to have arrived.

Carriage by Air Act, 1972

This act gives effect to the provisions of the Warsaw Convention, 1929 and The Hague protocol, 1955 relating to international carriage of passengers and goods by Air.

The act defines the liability of the Air Carriers for death or injury to passengers and for loss of or damage to registered luggage and cargo. It also mentions the time limits within which claim notice is to be served and suit to be filed against the Air Carrier.


Ships, Airlines, Railways, Road Carriers or any other person or organisation who carry goods for transport.

Carrier's Act, 1865– Notice of Loss

As per Section 10 of the Act no suit shall be instituted against a common carrier of the loss/damage to goods, unless notice in writing has been given within six months from when the loss/damage first came to the knowledge of the goods owner or his agent

Carriers' Legal Liability Insurance

Policy intended to cover the legal liability of the Transport Carrier for loss or damage to goods entrusted to him for transport from one place to another. As the title of the policy implies, it does not cover any contractual liability assumed by the carrier. Insurer's, for underwriting considerations, tend to limit the coverage only in respect of loss or damage to goods arising out of a fire or any other accident to the carrying vehicle and also insist that the carrying vehicle should also be covered comprehensively under motor insurance

Casualty insurance

That type of insurance that is primarily concerned with losses caused by injuries to persons and legal liability imposed for such injury or for damage to property of others. It also includes such diverse forms as Plate Glass, insurance against crime, such as robbery, burglary or forgery, Boiler and Machinery insurance, and Aviation insurance. Many casualty companies also write surety business.


Event which causes loss of extraordinary magnitude, such as a hurricane or tornado.

Causes of loss

Under the latest commercial property forms, this term replaces the earlier term "perils" insured against.


To transfer to a reinsurer all or part of the insurance or reinsurance risk written by a ceding company.

Ceding Commission

In calculating a reinsurance premium, an amount allowed by the reinsurer for part or all of a ceding company's acquisition and other overhead costs, including premium taxes. It may also include a profit factor. See Overriding Commission.


The amount of a risk which the insurance company reinsures: the amount passed on to the reinsurer.

Chartered Property Casualty Underwriter (CCU)

Professional designation granted to persons in the property and liability insurance field who pass a series of rigorous examinations and meet specified eligibility requirements.


  1. A formal request for payment of a loss under an insurance contract or bond; (2) The actual amount of the final settlement.


One who seeks reimbursement for loss under the terms and conditions of the insurance contract.

Claim Amount

It is the amount payable by the insurer under a policy on a claim arising.

Claims-made coverage

A policy providing liability coverage only if a written claim is made during the policy period or any applicable extended reporting period. For example, a claim made in the current reporting year could be charged against the current policy even if the injury or loss occurred many years in the past. If the policy has a retroactive date, an occurrence prior to that date is not covered. (Contrast this with "Occurrence Coverage")

Claims reserve

Claims provision, provision for outstanding claims/claims outstanding, claims reserve, total claim liability.

Claim settling agents

They are appointed by insurer in a foreign country abroad for survey/settlement of claims arising out of policy issued in the home country for overseas medi-claim and marine insurance policies.

Classification clause (cargo)

A clause in a cargo insurance open cover which details the minimum classification for an overseas carrying vessel that is acceptable to the insurers for carriage of the insured goods at the premium rates agreed in the contract. Goods carried by lower class vessels are accepted under the open cover, subject to payment of an additional premium.


Sentences and paragraphs describing coverage's, exclusions, duties of an insured, and termination of coverage, and other such parts of the insurance policy.


(1) In property insurance, a clause under which the insured shares in losses to the extent that he is underinsured at the time of loss. (2) In health insurance, a provision that the insured and insurance company will share covered losses in agreed proportion. In health insurance, the preferred term is "percentage participation".


Two or more insurers jointly covering the same risk.

Collision Coverage

Physical damage protection for the insured's own automobile(s) for damage resulting from a collision with another object or upset.

Combined ratio

A rough indication of the profitability of a property and liability insurer's underwriting operations, generally computed by adding the ratio of losses incurred to premiums earned and expenses incurred to premiums written.

Commercial General Liability (Cgl) Coverage Part

General liability coverage which may be written as a monoline policy or part of a commercial package. "CGL" now means commercial general liability forms which have replaced the earlier "comprehensive" general liability forms. The latest forms include all sub lines, provide very broad coverage, and two variations are available, "Occurrence" and "Claims Made" coverage.

Commercial Lines

Insurance for businesses, professionals, and commercial establishments.

Common law

Common law comprises the body of principles and rules of action, relating to the government and security of persons and property, which derive their authority solely from usages and customs of immemorial antiquity, or from the judgments and decrees of the courts. It is outside the laws created by enactment of statutes.

Comprehensive Coverage

Traditional name for physical damage coverage for losses by fire, theft, vandalism, falling objects and various other perils. On Personal Auto Policies this is now called "other than collision" coverage. On commercial forms, it continues to be called "comprehensive coverage".

Comprehensive General Liability Policy

A policy covering a variety of general liability exposures, including Premises and Operations (OL&T or M&C), Completed Operations, Products Liability, and Owners and Contractors Protective. Contractual Liability and Broad Form coverages could be added. In most jurisdictions the "Comprehensive General Liability Policy" has been replaced by the newer "Commercial General Liability (CGL)" forms which include all the standard and optional coverages of the earlier forms.

Comprehensive Personal Liability Policy (CPL)

A personal liability contract. It provides personal liability coverage for the individual and family needs arising out of numerous personal activities and situations, such as the ownership of residential property, ownership of pets, sports activities, and many other everyday activities.


Deliberate suppression of material facts that would affect the validity of a policy of insurance.


Those provisions in insurance contracts that qualify the insurer's promise of indemnity or impose obligations on the insured.

Consequential Loss

A loss arising indirectly from an insured peril.

Constructive Total Loss

A partial loss of sufficient degree to make the cost of repairing as much or more than the property is worth or is insured for.

Contractual Liability

Liability assumed under any contract or agreement. Coverage is generally limited in liability policies, but in most cases may be provided for an additional premium.


The term relates to circumstances where more than one party covers the risk. Each party is deemed to be liable for his proportion of the loss. If the Assured recovers in full from one insurer, that insurer is entitled to recover from the other insurer for that part of the loss which should have been paid by the latter. The term is used in marine insurance, also in relation to contributions paid by the Assured in connection with salvage and / or general average.

Co-Payment: The portion, either a percentage or a fixed dollar amount, of a medical bill that a patient pays. The insurer pays the rest.

Cover Note

A cover note is a document issued in advance pending the issue of the policy, and is normally required if the policy cannot for some reason or other be issued straight away. Cover notes can also be issued during the course of negotiations to provide cover on a provisional basis. A cover note is not a stamped document but is honoured, all the same, by all parties concerned.

Credit insurance

A form of guarantee to manufacturers and wholesalers against loss resulting from default on the part of debtors.