General Insurance


Gainful Employment

A term used in connection with the Permanent Total Disablement condition under a personal accident insurance policy. The disablement is of permanent and irrecoverable nature and is absolutely total, in the sense that the insured person is prevented from engaging in any employment, which would gain him financial benefits. (Ex. Paralysis)

Garbling Clause

The clause, in relation to marine/transit insurance of commodities like tobacco, coffee beans or grain, provides that the insurer will pay the cost of garbling (sifting and cleansing to separate sound from the whole), as such an exercise prevents further damage and reduces the claim.

General Average

A loss, which arises in consequence of extraordinary sacrifices made, or expenses incurred for the preservation of the ship and cargo in time of common peril comes within General Average and must be borne proportionally by all those interested in the adventure. The principle of General Average forms part of Maritime law and is applicable whether or not the parties to a maritime adventure are insured.

General Average contribution

The monetary contribution required of ship owners and cargo owners in respect of general average expenditures and general average sacrifices.

The underwriter is liable for the general average contribution paid or payable by the assured when the general average act is performed to prevent loss from an insured peril. Such liability however is limited to the proportionate amount of the contribution payable by the insured, if the contributory value of the interest is more than the insured value.

General Average Counter Guarantee

When the ship owner declares General Average, he insists on production of an unlimited guarantee to be provided by underwriters. The underwriters issue unlimited guarantee against the assureds counter guarantee whereby he commits to reimburse the underwriters the overpayment resulting from underinsurance. When the Adjustment is completed, the insurers first pay the contribution payable by the insured interest. If the contributory value of the insured interest happens to be more than the sum insured, the counter guarantee is invoked by the insurers and the insured is asked to pay back the excess amount paid on his behalf.

General average Deposit

In the absence of any acceptable form of guarantee, the receiver of the cargo will be required to pay a deposit into the general average fund before taking delivery of the cargo. The amount to be paid as a general average deposit is usually slightly higher than the estimated contribution. A deposit receipt is issued against the money thus deposited and the deposit earns interest. When the adjustment is completed, the holder of the deposit receipt is paid the difference between the deposit plus accrued interest, and the contribution.

General Average Essentials

  • The whole adventure must be in peril

  • The peril must be imminent

  • The act must be voluntary

  • The act must be reasonable and prudent

  • The act must be for saving all the interests involved

  • The sacrifice or the expenditure must be extraordinary in nature

General Average Expenditure

An extraordinary expenditure incurred by the ship owner intentionally and reasonably to preserve from peril the property involved in a common maritime adventure (e.g. port of refuge expenses, salvage remuneration, etc.) is known as General Average Expenditure. Such an expenditure is recoverable from the general average fund but not directly from the underwriters. The underwriter’s liability for such expenditure would be only that part of the expenditure that related to the general average contribution payable by the insured interest.

General Average Fund

A Fund created by the ship-owner and the average adjuster appointed on the declaration of general average, from out of the deposits collected in connection with the general average adjustment. Ship-owner has authority, without waiting for the final adjustment, to draw from the fund for general average expenditure.

General Average Guarantee

Where the cargo underwriters are prepared to commit themselves to paying the contribution assessed against the insured cargo owner, they will give a written guarantee to pay the contribution attaching to the insured interest. Such guarantee is acceptable to the ship-owner only if it guarantees payment of the full contribution assessed against the insured cargo. The underwriters issue such an unlimited guarantee after obtaining from the insured a counter guarantee to reimburse the underwriters for any overpayment due to under-insurance.

General Average Loss

A general average loss is a loss caused by or directly consequential to a general average act. It includes general average expenditure as well as a general average sacrifice.

General Average Refund

This relates to the difference between the General Average Deposit collected and the actual general average contribution in respect of any interest saved by general average measures. Such refund is payable only to the party who holds the deposit receipt.

General Average Sacrifice

Sacrifice of one or more interests involved in the adventure for saving rest of major interests

General Damages

Damages awarded to an injured person for intangible loss which does not readily lend itself to quantitative measurement. Frequently called pain and suffering. General damages are distinguished from special damages which are awarded for actual economic loss, such as medical costs, legal charges, cost of repairing/replacing damaged property, loss of income, etc.

General Insurance Business

Means fire, marine or miscellaneous insurance business, whether carried on singly or in combination with one or more of them

General Liability Insurance

Coverage that pertains, for the most part, to claims arising out of the insured's liability for injuries or damage caused by ownership of property, manufacturing operations, contracting operations, sale or distribution of products, and the operation of machinery, as well as professional services

General Operating Expense

Administrative expenses incurred by an insurance company which does not include agents' commission and taxes paid by the company.

Geographical Limitation

Territorial jurisdiction of the insurance coverage. Normally the personal lines of insurances and liability insurances confine the coverage to accidents taking place within the country unless specifically incorporated in the policy otherwise. Insurance for motor vehicles is extended on request to include Lahore, Nepal and Bhutan without any additional premium and Bangladesh by charging a flat additional premium as given in the All India Motor Tariff.

Ghost Animals

Animals which do not exist. It is possible that insurance is taken for animals that do not exist and subsequently putting in a claim by falsifying the records and claim documents.


A process related to the cotton commodity. Cotton staples will be combed in order to remove the cotton seed. This process will be carried out in the ginning section of the factory. The process increases the fire hazard.


"Goods" means goods in the nature of merchandise, and does not include personal effects or provisions and stores for use on board

Goods Carriage

Means motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods.

Goods in Trust or on Commission

The person who holds the property of another either in trust or commission is deemed to possess an insurable interest in such property> he can accordingly insure them in his name.

Goods sent on approval

One of the terms of sale of goods. Here the property in the goods passes from the seller to the buyer

a) When the buyer signifies his approval to the seller or does any act adopting the transaction

b) If he does not signify his approval but retains the goods without giving notice of rejection within the time stipulated in the contract, or if no time has been fixed, within a reasonable time.

Seller has insurable interest in the goods until one of the above two alternatives takes place.


Reputation of a business, expressed in monetary value. Normally Goodwill is not insured by the property insurers as there is no yardstick by which it can be measured.

Good Faith

A basic principle of insurance. The Assured and his broker must disclose and truly represent every material circumstance to the Underwriter before acceptance of the risk. A breach of good faith entitles the Underwriter to avoid the contract. (Proposed changes in law may affect this definition - also see "Utmost Good Faith".)

Gramin Personal Accident Insurance

A special personal accident insurance policy introduced for the benefit of the people living in rural areas of the country. With a sum insured per individual as Rs.10, 000 at a premium of rs.5 only the policy provides cover against death, loss of limbs and/or eyes and permanent total disability arising out of any accident.

Grievous Injury

Any injury that endangers the life of the person or causes the sufferer to be in severe bodily pain or unable to follow his ordinary pursuits for a number of days. This term is specifically used in connection with "Hit and Run" motor accident cases where a specified compensation is payable for grievous injuries.

Gross Domestic Product

Measurement of the values of all goods and services produced in a period of a year.

Gross Loss

Loss incurred by the direct insurer for the 100% of any one risk insured by him

Gross National Product (GNP)

Total final value of goods and services produced in a national economy over a particular period of time, usually one year. The GNP growth rate is the primary indicator of the status of the economy.

Gross Negligence

Reckless action without any regard to consequences.

Gross Net Premium Income

When net account of a company is protected by an XL Cover, the premium for the net account is pro-rata to the line retained on risks. Such net account premium is Gross Net Premium of the Company. The word gross signifies that the premium is before any deductions

Gross Premium

The premium paid by the policyholder

Gross Profit

The sum insured in respect of the Consequential Loss Policy is based on the Gross Profit of the business. It represents the sum total of the Net profit and the insured standing charges, or if there be no Net profit, the amount of the insured standing charges less such proportion of any trading loss as the amount of the insured standing charges bears to all the standing charges of the business

Gross Rate

The sum of the pure premium and a loading element.

Gross Vehicle Weight

Means in respect of any vehicle, the total weight of the vehicle and load certified and registered by the Registering Authority as permissible for the vehicle

Group Discount

Discount allowed in the premium arrived as per manual or prospectus rates depending upon the number of persons covered under a Group Personal Accident or Group Medi-claim Insurance Policy. Group Discounts are also allowed in the Industrial All Risks Policy, Householder's Comprehensive Insurance Policy, shop Keeper's Package Policy also, where the discount depends upon the number of sections of coverage availed.

Group Insurance

Insurance coverage for a group of individuals engaged in some common activity. Ex-Employees of an organisation, members of an association of professionals, farmers registered as a society for rural activities etc. Insurers issue group policies in accident insurance, medical insurance, professional indemnity insurance, etc.

Group Medi-claim Insurance

Medi-claim Insurance Policy issued in favour of an enterprise or an organisation or any employer, to cover their employees and dependants. These policies are also issued to associations, clubs etc. for the benefit of their members. The essential requisites for a group policy are: Some common relationship among the persons to be insured and a central point for administration of the policy scheme.

Group Personal Accident Insurance

Personal Accident Insurance Policy issued in favour of an enterprise or an organisation or any employer, to cover their employees (and dependants also sometimes). These policies are also issued to associations, clubs etc. for the benefit of their members. The essential requisites for a group policy are: Some common relationship among the persons to be insured and a central point for administration of the policy scheme.

Growth Rate

Percentage change in the quantum of business when compared with the business in a base year. Growth rate in business of every year over the business in the previous year is assessed by the insurance companies to assess the business performance vis a vis the target fixed, analyse the reasons for shortfall if any, and to take corrective measures as are needed. Growth Rates in business of the individual Field Personnel is also assessed, every year, for ascertaining the individual employee's eligibility for annual increment and growth incentive as per scheme.