General Insurance



Policy Proof of Interest. Under an ordinary marine policy the assured has to prove his insurable interest at the time of loss to substantiate a claim. A PPI policy dispenses with the need for the assured to prove his interest at the time of loss. The mere production of the policy is deemed sufficient proof of interest. There are certain insurable interests which, although they exist, are difficult to be established or extent of which is difficult to arrive at. Increased Value of the cargo is an example of the former and Anticipated Freight is an example for the latter.


In general insurance, comprehensive insurance scheme, in favour of an individual or an enterprise or an industry covering assets, personnel, interests and liabilities against a bundle of perils.

P.A. Flight Coupons

Passenger's Flight Insurance Coupon covers death and/or permanent disability arising out of a bodily injury caused by violent, accidental, external and visible means whilst in or entering into or descending from any aircraft owned and/or operated by a regular airline over a schedule route by which the insured is travelling as a fare paying passenger during the flights specified. Rate of premium is Rs.5/- per Rs.50,000/- for a flight of not more than 24hrs duration.

Package Policy

A combination of two or more individual coverage into a single policy. A Householders Comprehensive Insurance Policy, for example, is a package combining property, personnel and liability coverage for the householder.

Packing List

Statement furnishing details of the contents of a package or a container. This document is required by the insurer in case of a claim for shortage of contents in the package caused during transportation and preferred under the relevant cargo insurance policy. Packing List helps for a comparison of the contents packed with the contents received at destination.

Paid Losses

Total amount of all the losses paid by an insurance company in a given period

Pain and Suffering

Refers to the suffering attributable to the injury sustained by the person in an accident and to any consequential surgical operation. This is one of the heads of damages allowed in relation to any motor third party insurance claim. Past and future suffering, pain, duration and its severity are taken into account. Damages are given both for mental and physical pain and suffering.

Pair & Set Clause

Where the value of certain articles such as a pair of diamond earrings depends on their continuance as a pair or set, the value is drastically diminished if one of the pair or set is damaged or destroyed. Naturally, the insured would prefer to abandon the remaining earring to the underwriter and to claim a total loss. By inserting Pair & Set Clause, the insurer limits his liability to the insured value of the damaged part or lost object.


Assembly of one or more packages on a pallet base and properly secured to it.


This is a special packing method where bundles, bales, cases etc. are placed in wooden platforms and then securely tied. Pallets are then lifted by fork-lifts or cranes and placed into the holds of the vessels.

Partial Disability

The result of an illness or injury which prevents an insured from performing on or more of the functions of his/her regular job

Partial Loss

A loss under an insurance policy which does not either; (1) completely destroy or render worthless the insured property; or (2) exhaust the insurance applying thereto.

Particular Average

Accidental partial loss of the subject matter insured proximately caused by an insured peril. In a freight at risk policy the term may be applied to a claim for loss of freight following particular average loss of goods.


A term used in the Marine Insurance Act (1906) to denote a hazard. The principle of proximate cause is applied to an insured peril to determine whether or not a loss is recoverable. In modern practice the term "risk" often replaces "peril".

Physical Damage

Damage to or loss of an automobile resulting from a named peril

Physical Hazard

A condition of the subject of insurance which creates or increases the chance of loss, such as structural defects, occupancy, or similar conditions


Petty theft, especially theft of articles in less than package lots.

Policies Issued Basis

When excess of loss reinsurance treaties are concluded on Policies issued basis, the treaty will only cover those policies that have been issued or renewed at dates falling within the period of the treaty.


The written statement of a contract effecting insurance, or certificates thereof, by whatever name called and including all causes, riders, endorsements and papers attached thereto and made part thereof.


The person (or persons) whose risk of financial loss from an insured peril is protected by the policy.

Policyholder's Funds

Monies set aside by insurers to cover outstanding liabilities to Policyholders. Also known as technical reserves

Policyholder's Surplus

Amount over and above liabilities available for an insurer to meet future obligations to its policyholders

Policy Period

The period during which the policy contract affords protection.

Policy Term

The period for which an insurance policy provides coverage


A risk sharing mechanism in which the members of a group agree to be collectively responsible for losses

Pre-Existing Conditions

A physical condition of an insured person which existed prior to the issuance of the policy.


The particular location of a property or a portion thereof as designated in a policy.


The payment for an insurance policy, usually paid periodically (annually, semi-annually, quarterly, or monthly).

Premium Notice

Notice of a premium due, sent out by the company or one of its agencies to an insured. Synonym for “Renewal Notice".


The applicant for, or subject of, insurance; the one from whom an agent derives his or her authority

Prior Damage

Pre-existing damage that occurred prior to the loss in question.


Cancellation of an insurance contract by the insurance company, allowing a policyholder a share of the premium relating to the remainder of the time under the contract that bears to the total contract premium.

Pro Rata Cancellation

Cancellation with a return of premium charged for the period of time the policy was in force equal to the ratio of the total premium to the total policy period

Products Liability Insurance

Provides protection against claims arising out of the use, handling or consumption of a product.

Professional Liability Insurance

Liability insurance to indemnify professionals, doctors, lawyers, architects, etc., for the loss or expense resulting from claim on account of bodily injuries because of any malpractice, error or mistake committed or alleged to have been committed by the insured in his profession.

Proof of Loss

A statement made to the insurance company under oath setting out the basis of an insured's claim under the insurance policy.

Property Damage (Liability) Insurance

Protection against liability for damage to the property of another not in the care, custody and control of the insured, as distinguished from liability for bodily injury.

Property Insurance

Insurance which indemnifies a person with an interest in physical property for its loss or the loss of its income-producing ability.


A person interested in taking out insurance has to make an offer by means of a proposal. This is an application for the cover required, or for obtaining quotations of the premium chargeable

Proposal Form

It is a form which is to be completed for securing an insurance policy


Proposer is a person who proposes the insurance policy

PROSCRIPTION: Outside of the time period in which a legal action can be commenced.


A form, which is often part of the proposal form, giving details of the cover available with particulars of extra benefits and rebates

Protection and Indemnity (P & I) Insurance

Liability insurance coverage in an ocean marine policy

Provision for Unexpired Risks

Amount set aside on the balance sheet in addition to unearned premiums with respect to risks to be borne by the insurance undertaking after the end of the financial year, in order to pro-vide for all claims and expenses in connection with insurance contracts in force in excess of the related unearned premiums and any premiums receivable on those contracts


The terms or conditions of an insurance policy

Proximate Cause: The immediate and effective cause of loss or damage. It is an unbroken chain of cause and effect between the occurrence of an insured peril or a negligent act and resulting injury or damage.

Public Liability/Third Party Liability

The insured's liability at law (excluding liability to an employee arising out of employer/employee relationship) to pay compensation for death, injury or illness sustained by any person or damage to property caused by explosion or collapse of boiler and pressure plant or use of lilting and handling plant

Punitive Damages

Damages awarded separately and in addition to the compensatory damages, usually on account of malicious or wanton misconduct, to serve as a punishment for the wrongdoer and possibly as a deterrent to others

Pure Risk

A condition in which there is the possibility of loss or no loss only