General Insurance


Economic Limit in increased cost of working

The term relates to the limit up to which the insurer will pay under a fire consequential loss policy for the additional cost of working incurred by the insured to avoid totally or partially, the reduction in turnover during the indemnity period. Economic limit means the extent of gross profit saved by the incurring of the additional cost of working.

E & O.E

Errors and omissions excepted.

Each and Every Loss

Excess of Loss Reinsurance arranged on "Any One Event" basis under which each and every loss arising out of the one event will be accumulated and XL recovery effected of such accumulated loss in excess of the underlying loss retention of the reinsured. An event of loss is defined as 168 consecutive hours and each and every loss during that period is aggregated as stated above for application EL recovery.

Each and every risk each and every loss

The term relates to Treaty Reinsurance. The agreement provides for the reinsured to determine what is one risk, (Ex. whether it is one building or one group of buildings under one roof) and what is one loss. (Ex. Limiting the period and geographical scope of a loss occurrence)

Earned Premium

The portion of the premium which is the property of an insurance company, based on the expired portion of the policy period. For example, an insurance company is considered to have earned 75 percent of an annual premium after a period of nine months of an annual policy has elapsed.

Earned Premium – Reinsurance

In relation to reinsurance, is the premium ceded and included in the year in question plus reserve for unexpired risk brought forward or portfolio premium entry less reserve for unexpired risk at the end of the current year or portfolio premium withdrawn.

Earthquake Fire and Shock

An extension of cover provided to the standard fire and special perils policy on payment of extra premium. Loss/damage to the insured property caused by fire or shock or both resulting from earthquake is payable as per this extension.

Earthquake Zone

For the purpose of differentiating the more earthquake-prone areas from the less-prone ones and providing different rating structures for the earthquake cover under the Fire Policy the Tariff Advisory Committee has divided the whole of India into four Earthquake Zones. Details of classification of the Zones are provided in the Fire Tariff

Economic Life

Balance of period for which a machine or other property will earn to its owner more than the maintenance and/or the operating expenses for the same. This is the prime factor which is taken into account while fixing the market value of the item for insurance purposes.

Economic Loss

The estimated total cost, both insured and uninsured, incurred by an individual or family or a business house, arising out of the consequences of any accident or mishaps (such as motor vehicle accidents, work accidents, personal accidents and fires); includes such factors as property damage, funeral expenses, wage loss, and medical, hospital and legal costs as also third party liabilities

Economically Vulnerable or Backward Classes

As per IRDA Regulations, means persons who live below the poverty line.

Effective Date

The actual date on which the insurance coverage granted under an insurance policy will come into force.

Efficient level of risk

The amount of risk remaining after an individual or business pursues activities such as loss control, loss financing, and internal risk reduction, to the point where marginal benefit equals marginal cost

Eight System

A system followed in reinsurance in connection with Premium Portfolio Adjustment for ascertaining unexpired risk liabilities. Policies issued during the period of twelve months are segregated into eight blocks each of one and half month. Then unexpired premium is computed by unexpired risk period of each block.

Ejusdem generis

Means "of the same kind". Where general words follow specific words which have a quality in common, the general words are considered to refer merely to things of the same kind.

When the policy mentions a list of named perils and end the list with the words and all other perils such expression is subject to the legal principle of ejusdem generis and means only perils similar to the ones specified earlier.

Electrical Clause

A clause appearing as a part of the General Exclusions in the Standard Fire and Special Perils Policy relieving the insurer of liability for loss or damage to any electrical and/or electronic equipment or installation arising from over-running, excessive pressure short circuiting, arcing, self-heating or leakage of electricity, from whatever cause. But the damages to any adjacent insured item consequent upon such over-running etc. is payable under the policy.

Electronic Data Processing Coverage (EDP)

Specialized type of insurance designed to cover computer equipment, data systems, information storage media, and expense or income losses related to EDP losses.

Electronic Equipment Insurance

Policy which provides coverage against sudden and unforeseen material damages to any electronic equipment due to any cause, subject to certain exclusions. Broadly the cover is against Fire and Allied Perils, Explosion, Machinery Breakdown, short circuit and other electrical causes theft, burglary, water damage, humidity, faulty operation, gross negligence, lack of skill, falling object, entry of foreign bodies, etc. The policy is also extended to cover loss or damage to the external data media as also the cost of reconstruction of data on such external data media. Further coverage is also provided for additional expenditure incurred as a result of the result of the failure of the electronic system necessitating the use of a substitute system. The policy will be subject an excess in respect of claims on all the above heads.


A governmental prohibition, either on political considerations or economic reasons against shipping movement, cargo or trade.

Prohibition by the government for shipment of certain goods or merchandise to another country. Marine Insurance of such goods to such country will not be considered legally valid.


Fraudulent use or misappropriation of another's property or money which has been entrusted to one's care.

EML Underwriting

Term used in connection with Engineering Reinsurance where the ceding company's retention and the treaty reinsurers' share are assessed as a percentage of the Estimated Maximum Loss arising out of one loss event.


The term 'employee' is deemed to mean all existing employees (officers, clerks and sub-staff) whether permanent or temporary, whole time or part time, on contract or otherwise, including apprentices, on the salary roll of the bank at all its offices, but shall not include any director or partner other than salaried.

Employers Liability Insurance

Coverage against common law liability of an employer for accidents to employees, as distinguished from liability imposed by workers compensation law.

Employer Form

Refers, in relation to the Fidelity Guarantee Insurance, to a form to be completed by the insured (employer) which is in the nature of a proposal form and which will form the basis of the contract. This will seek for details about the employer as also the nature of the duties of the employee who should be guaranteed, the system of check in the company past defalcation if any by the employee etc. At the end, the insured will make a declaration certifying to the truthfulness of the statements made by him.


Memorandum issued in connection with effecting some additions, alterations or deletions in the terms of coverage granted under the standard form of policies, either at the time of issue of the standard policy at the time of commencement of insurance or any time during its currency based on mutual agreements between insured and insurer. This will be signed by the authorised signatory of the insurer and once issued, the policy and the endorsement together will constitute the evidence of the contract.

Energy Insurance Package Policy

Against all the risk exposures connected with the Oil and Energy Risks Coverage is under five sections as per details below:

  • Property Insurance Coverage for all off shore property comprising of Platform, Pipelines, Materials on Board Rigs, Cargo, Drill Barges and Drill Ships, Multipurpose support vessels and Seismic and other vessels-Cover including War and Strike Risks.

  • Property Insurance Coverage for all onshore property, including Land Rigs and Drilling Equipment

  • Expenses of Well Control

  • Third Party Liabilities, comprising of Specified Offshore and Marine Liabilities and other liabilities

  • Terrorism Coverage in respect of all interruptions

In view of the complexities of the risk and substantial reinsurance requirement, the coverage is always finalised under the direct involvement of the reinsurers right from the beginning and the cover granted as per international practices.

Energy Treaty

Reinsurance Treaty in respect of offshore drilling rig platforms In an Oil Field in the deep seas pipelines for oil supply to onshore storage units, refineries etc. which are defined as Marine Hull Offshore Business

Entrepot trade

The term refers to import of goods for purposes of immediate re-export to another country. Goods imported under this arrangement are not subject to import duty.


As defined in the National Environment Tribunal Act,1995, includes water, air, and land and the interrelationship which exist among and between water, air and land, and human beings, other living creatures, plants, micro-organism and property.

Environment (Protection) Act 1986

A comprehensive umbrella legislation for enforcement of measures for protection of the environment and for co-ordination of the activities of the Central and State Pollution Control Boards constituted under the Water and Air Acts.

Environment Relief Fund

Fund established as per the provisions of the Public Liability Insurance Act, 1961. The relief fund shall be utilised for paying relief under the award made by the Collector under the Public Liability Insurance Act and shall meet the excess over the amount paid under the insurance policy

Environmental Damage

The injurious presence in or on land, the atmosphere, or any water course or body of water of solid, liquid, gaseous, or thermal contaminants, irritants, or pollutants.

Environmental Impairment Liability Insurance

Coverage designed to cover losses and liabilities arising from damage to property by pollution.

Environmental Pollutant

Any solid, liquid or gaseous substance present in such concentration as may be or tend to be, injurious to environment

Environmental Pollution

The presence in the environment of any environmental pollutant.

Environmental Risks

Risks attributed to the release of contaminants into the air and the disposal of industrial wastes on land and into water courses.

Equipment Leasing

Equipment purchased and leased out to another. Owner benefits by the lease rental as also by tax benefits. Insurance Policies for the leased property will be issued in the name of the owner only but the lessee's interest can be noted in the policy if required by the parties.

Equitable interest

An interest recognisable at law.

Erection All Risks Insurance

Policy intended to cover the projects whilst in course of construction. The policy provides coverage to all project machinery and materials against all risks, subject to certain named exclusions. The cover is extended to include all civil engineering works connected with the project, insured's surrounding property and third party liability. The period of the policy will commence from the arrival of the first consignment of the project materials at the site of erection and continue until the erection and testing is completed and the project commissioned. The sum insured will represent the estimated completed value of the project. Suitable amounts of coverage will have to be chosen by the insured for surrounding property and third partly liability coverage. This policy is wholly governed by Tariff.

Error, Omission & Alteration Clause

A Clause in proportional treaty wordings which provides that any accidental or inadvertent error or omission shall not prejudice the treaty and the same will be corrected as soon as possible and necessary adjustments will be made.


Provision for automatic increases on some defined basis in premiums and sums insured.

Estimated Maximum Loss (EML)

An expression used in fire, explosion and material damage policies only. An estimate of the monetary loss which could be sustained by insurers on a single risk as a result of a single fire or explosion considered by the underwriter to be within the realms of possibility.

Ex Gratia

A payment made where there is no legal liability


Specified hazards for which a policy will not provide benefit payments. (Often called Exceptions)


(1) State of being subject to the possibility of loss; (2) extent of risk as measured by payroll, gate receipts, area, or otherwise; (3) possibility of loss to a risk being caused by its surroundings.

Extended Reporting Period (ERP)

A period allowed for making claims after expiration of a "claims made" liability policy. Also known as a "tail".