General Insurance


Impact Damage

A part of the cover under the Standard Fire and Special Perils Policy. Cover is against loss or damage to the insured property caused by impact by any Rail/Road vehicle or animal by direct contact not belonging to or owned by

  • the Insured or any occupier of the premises or

  • their employees while acting in the course of their employment

Implied Warranty

An implied warranty is not expressed in the policy specifically but which is understood by both parties to be forming part of the contract and binding on both. An implied warranty must be strictly complied with. In the event of a breach of the warranty the insurer is discharged from liability as from the date of the breach, but the insurer may waive the breach or the breach may be excused by statute. Due diligence is an example of implied warranty in respect of all policies. Seaworthiness and Legality of Adventure are two examples in relation to Marine Insurance


Bursting of a property inwards due to a sudden decrease in pressure. Loss/damage to the insured property due to implosion is covered under the standard fire and special perils policy.

Identification of Animal

The methods used for recognition. Identification of the animal at time of insurance is essential so that the claim is settled only for the animal to which the cover was provided.

Important Notice

It is customary to attach a red line clause called as Important Notice to the certificates and policies of insurance to guide the insured regarding claims procedure this clause deals with the duty of the insured to minimise losses and preserve recovery rights, arrangement of survey and documentation of the claims.

Imported models

Vehicles manufactured in any country other than India. Insurance companies in India follow certain self-imposed guidelines in insuring imported vehicles in view of the problems encountered in connection with obtaining spare parts for replacement of damaged ones in the event of an accident and also excessive repair costs. It is also the normal practice for the insurer to arrange for an inspection of the vehicle proposed for insurance before accepting to cover.


Any betterment effected in either a building or equipment through expenditure of money or labour which is more than required for a mere replacement or repair or restoration to the original condition. Property insurance policies do not normally cover the increase in cost incurred for any such improvement in an item which was affected by an insured peril.

Imputed Negligence

Case in which responsibility for damage can be transferred from the negligent party to another person, such as an employer.

In course of employment

The term which is applicable in respect Workmen's Compensation or the Employer's Liability Insurance, is defined by the courts as commencing at the end of the individual's journey from his house to employer’s premises and stops at the commencement of his return journey, unless the employee is rendering service to his employer or is discharging some obligation imposed upon him by the contract of employment even outside his work place.

Inadvertent Error

Mistake or fault committed unintentionally, accidentally. Property Insurance Policies admit claims for loss/damage caused to the insured property by an insured peril, resulting from such inadvertent errors of the insured or others.

In-built XL Protections

Protection of a quota share treaty by a common account XL protection which is in-built. Reinsurers of quota share have to avail XL protection compulsorily and pay the XL premium cost.

Inchmaree clause

Part of the insurance coverage granted under the Institute Hull Clauses which relates to loss or damage to the insured vessel caused by negligence of master and/or crew and other additional perils such as loss or damage to the hull and machinery caused by bursting of boilers, breakage of shafts or any other latent defect.

Incidental Contract

Incidental (and not the main) reason for forming a contract. This is relevant in respect of Group Insurance Policies like Group Personal Accident Insurance or Group Medi-claim Insurance where the group should exist for some other homogenous functioning and should not have been formed only for availing a group policy with an intention to get premium discounts. Eg. Employees of a firm or company, members of a co-operative society or association or club etc.

INCO Terms

Internationally accepted and employed terms for contracts of sale, first published by the International Chamber of Commerce (ICC) in 1936. They were revised more than 7 times since then. It modifies some of the existing terms in an updated format for ease of use and also for providing traders, lawyers, transport officials and insurers with a modern text reflecting the latest changes in the trading environment.


Cash flow from all sources, normally expressed on an annual basis


One who is not legally capable of entering into a contract. Ex. Mentally ill, minors etc. Contract of Insurance entered into with an incompetent person is not legally valid.

Increase in Cost of Working

This is the abnormal expenditure incurred by the insured to avert or minimise the adverse effect on the business arising out of the property damage and the consequent business interruption so that loss on the net profit and the standing charges would get avoided or at least minimised. Examples of such expenditure are rent for temporary premises, overtime wages to hasten the process of repairs to the damaged item, hire of machinery until affected one is set right etc.

Incurred Claims

Incurred claims equal the claims paid during the policy year plus the claim reserves as of the end of the policy year, minus the corresponding reserves as of the beginning of the policy year. The difference between the year end and beginning of the year claim reserves is called the increase in reserves and may be added directly to the paid claims to produce the incurred claims.

Incurred Loss

Sum total of the amount of all claims reported and paid during the policy period and the estimated amount of all claims reported during the policy period but remaining unpaid. For all practical purposes this is arrived at by taking the claims paid during the policy year plus the loss reserves as at the end of the policy year, minus the corresponding reserves as at the beginning of the policy year. The difference between the year end and beginning of the year loss reserves is called the increase/decrease in reserve and may be added/subtracted directly to/from the paid claims to produce the incurred loss.

Incurred Loss Ratio

The ratio that the incurred loss bears to the gross premium

Incurred-but-not-Reported (IBNR) Reserves

Liability account on an insurer's balance sheet reflecting claims that are expected based upon statistical projections but which have not yet been reported to the insurer

Indemnifiable Loss

Loss recoverable under the policy in view of its being caused by peril insured against

Indemnification of Loss

Compensation to the victim of a loss, in whole or in part, by payment, repair, or replacement.

INDEMNIFY: To restore the victim of a loss, in whole or in part, by payment, repair or replacement.


Recipient of an indemnity payment


Provider of an indemnity payment


To compensate the sufferer of the loss to the extent of the loss suffered by him

Indemnity Period

A term related to the consequential loss insurance covers. Indemnity Period is the period during which the business of insured will be affected either totally or even partially arising out of the damage to the Business Property by an insured peril. This period will start either from the time of the damage to the property or afterwards depending upon exactly when the business results will get affected and continue until such time when the business activities are wholly resumed and reach normalcy. This period is different from the period of insurance under the policy. While the commencement of the indemnity period will be sometime during the period of insurance the termination of the same may go beyond the date of expiry of the policy.

Independent Survey Report

A report of inspection, of a property proposed for insurance or of a property or an interest which is the subject of an insurance claim, by an independent surveyor.


Adjusting of values over time to reflect the impact of inflation

Indian Carriage of Goods by Sea Act – Carrier not responsible

As per Article IV-Rule 2, significant Causes of loss/damage to cargo for which carrier is not responsible/liable are:

  • Fire

  • Perils of the Sea

  • Act of God

  • Act of War

  • Strikes or lock-outs, Riots and civil commotions

  • Insufficiency of Packing of cargo

  • Insufficiency or inadequacy of marks

Any other cause arising without the actual fault or privity of the carrier

Indian Carriage of Goods by Sea Act – Limit of Liability of Carrier

As per Article IV-Rule 5 Monetary liability of the carrier for the cargo carried is limited to Sterling Pounds 100 per package or unit, or the equivalent of that sum in other currency, unless nature and value of such goods have been declared by the shipper before the shipment and inserted in the B/L.

By agreement between the carrier and the shipper another maximum amount may be fixed but that maximum amount shall not be less than Sterling Pounds 100.

Indian Carriage of Goods by Sea Act – Notice of Loss to Carrier

As per Article III-Rule-6, unless notice of loss or damage to cargo is given in writing to the carrier, before or at the time of removal of the cargo into the custody of the importer or his agent, or if the loss is not apparent, within three days, such removal shall be prima facie evidence of the delivery by the carrier as described in the bill of lading.

Notice within three days need not be given if the state of the cargo at the time of such removal been the subject of joint survey or inspection

Carrier will any case not liable unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered

Indian Carriage of Goods by Sea Act, 1925, The

The Act defines the rights, liabilities and immunities of a ship-owner in respect of loss or damage to the cargo carried

Indian Post Office Act, 1898

The Act defines the liability of the Postal Authorities for loss, mid-delivery, delay or damage to any article in the course of transmission by registered post.

Indian Railways Act

The duties, obligations and responsibilities of the railways are governed by the provisions of the Indian Railway Act 1890 and Amendment Act, 39 of 1961. The act also prescribes time limit and procedure for lodging claims and filing suits

Indian Reinsurer

An insurer who carries on exclusively reinsurance business and is approved in this behalf by the Central Government.

Industrial All Risks policy

A comprehensive insurance cover introduced mainly for the benefit of industrial houses. Cover is against all accidental loss or damage to all fixed or moving assets like building, machinery, stocks etc. with named exclusions. While consequential loss by fire and allied perils is compulsory as a part of the package, Machinery loss of profit cover is optional.

Minimum Sum Insured under the policy should be Rs.100 crores. This Policy is specially rated as per the guidelines of the tariff advisory committee

Inevitable Accident

Accident, to which no fault can be attributed to anybody.

Infidelity Exclusion

In relation Money (in Transit) Insurance, loss of money to the insured caused by the act of fraud/dishonesty of its employee, is not payable unless discovered within 48 hours of their occurrence. However insurers would agree to delete this exclusion on payment of extra premium.

Infidelity of Employee

In relation to fidelity guarantee insurance, or to that section of any other policy which deals with fidelity guarantee coverage, refers to financial losses to insured caused by an act of infidelity or dishonesty on the part of a covered employee.


Rise in the prices of goods and services as happens when demand increases over supply.

Inflation Factor

Adjustment in property insurance to reflect increased construction costs. See "Escalation Clause"

Inflation Rate

Rate of increase in prices of goods and services. Indices published by the Reserve Bank of India and some industrial agencies furnish the inflation rate in respect of different category of goods which are depended upon insurers and surveyors while assessing the market value of the property insured as also the property affected by an insured peril.

Information Technology Insurance Policy

Policy providing coverage to Information Technology companies or Organisation against their civil liability for any claim for

  • Breach of duty or

  • For breach of contract where the act, error or omission giving rise to the breach of contract also gives rise to breach of duty

  • Breach of confidentiality or

  • Defamation

In respect of any information technology services or information technology products that are provided by the insured in the conduct of their business. Defence cost are also payable provided the defence of any claim against the insured is undertaken with the consent of the insurer. This is normally a claims made policy.

Inherent Vice

A term relevant in Marine Cargo Insurance. This is a quality inherent in a cargo which produces damage to the cargo without the involvement or impact of an outside agency. Inherent vice is not a risk but is only an inevitability. Policies of marine insurance, even on all risks basis exclude losses caused by inherent vice.


Performing of some organisational functions within an organisation without having the services of outside agencies who carryout and/or specialise in such functions. In general insurance there exists the practice of in-house loss surveyors Lawyers for part of the organisations' function in the respective areas.

Inland Marine Insurance

A branch of the insurance business which developed from the insuring of shipments which did not involve ocean voyages. Exposures eligible for this form of protection are described in the nationwide definition of Marine Insurance. Such diverse properties as bridges, tunnels, jewellery, and furs can now be written under Inland Marine forms.

Inland Transit Clause A

This clause is attached to policies covering transportation of goods by road or rail. This insurance covers the goods against all risks of physical loss or damage. However, it does not cover all losses. The policy is subject to exclusions like, inherent vice, wilful misconduct of the insured, ordinary losses, delay and insufficiency of packing.

Institute Cargo Clauses

Treaty wordings developed by the International Chamber of Commerce. There are three basic sets of these clauses (A, B and C). The A clause covers "all risks", subject to specified exclusions. The B and C clauses cover specified "risks", subject to specified exclusions. (See actual ICC Clauses treaty wordings via "Ocean Reference" link at left)

Insurable Interest

A direct monetary interest in the insured property sufficient to result in monetary loss should the property be damaged or destroyed.

Insurable Risk

A risk which meets most of the following requisites: (1) The loss insured against must be defined; (2) It must be accidental; (3) It must be large enough to cause hardship to the insured; (4) It must belong to a homogenous group of risks large enough to make losses predictable; (5) It must not be subject to the same loss at the same time as a large number of other risks; (6) The insurance company must be able to determine a reasonable cost for the insurance; (7) The insurance company must be able to calculate the chance of loss.


A system to protect persons, groups, or businesses against the risks of financial loss by transferring the risks to a large group who agree to share the financial losses in exchange for premium payments.


The person whose risk is transferred and shared; the party to an insurance agreement whom the insurer agrees to indemnify for losses, provide benefits for or render services to.


The company or group offering protection through the sale of an insurance policy to an insured; the party to an insurance agreement who undertakes to indemnify for losses, provide pecuniary benefits, or render services.


Any person who, or organisation which, gives advice by way of directly offering, advertising or on a person-to-person basis in respect of an insurance product and includes the promotion of such a product or the facilitation of an agreement or contract between an insurer and a customer. Intermediaries are generally divided into separate classes. The most common types are 'independent intermediaries' who represent the buyer in dealings with the insurer (also known as independent brokers) and 'agents' (which generally include multiple agents and sub-agents) who represent the insurer.