Jargon explained - B
-
Definition
The maximum limit that could be paid for all eligible claims for a particular type of benefit in a policy year.Explanation
Used when talking about insurance policy benefits.
A benefit could be a payment or a service. The benefit allowance (this is also referred to as 'limit') for each benefit sets the limit for the particular type of benefit in a specified period.
For example, Jason has a medical insurance policy that provides psychiatric treatment as a benefit. The benefit has a benefit limit of £500 per policy year. This means that the most Jason could claim for psychiatric treatment in a policy year would be £500.
Benefit limits can have different amounts, and they can run over different periods. -
Definition
An award that an employer may be required to pay an employee.Explanation
Used when talking about Legal Expenses cover and particularly cases of unfair dismissal of employees.
Where an employment tribunal finds an employee has been unfairly dismissed they may make an award of compensation. This will consist of two elements, Basic Award and Compensatory Award. The Basic Award is a calculation dependant on the age of the employee, their length of service and their weekly pay (subject to a limit). -
Definition
Cover that protects the policyholder against loss of income resulting from the loss of business records relating to money they are owed.Explanation
Used when considering types of Business Interruption cover.
If a policyholder chooses Book Debts cover, it protects them against the loss of income from amounts they are owed. The policyholder proves how much income they are unable to collect from debtors using past trading records and experience.
Book Debts cover is sometimes called Accounts Receivable cover or Customer's Outstanding Balances. -
Definition
Insurance protecting against the business loss of income resulting from the interruption or interference to the business as a result of a fire or other insured peril.Explanation
Used when considering types of insurance cover for businesses.
The main benefit of Business Interruption is that it helps to limit the effect reduced levels of income can have on a business. This cover will pay for the loss of income and continuing costs at a time when turnover is reduced.
Business Interruption insurance is sometimes also known as consequential loss, loss of profits or loss of income insurance. -
Definition
This is when a member on a No Claims Discount policy chooses to cancel a claim against the policy so that their renewal premium is not affected by the claim.Explanation
Used when talking about premiums and no claims discounts.
If a member makes a claim, they'll lose their no claims discount (unless they've protected it). The effect of losing their no claims discount is that their premium increases.
The short-term cost for the member of paying the claim is off-set by the longer-term savings the member makes on their premiums.