The component of insurance which is passed to a re-insurer by a primary insurer who has insured the original risks. A cession may be the entire amount or a portion of single risks, a specifically defined group of policies, or classes of business, as outlined in the reinsurance contract.

Latin term meaning “from the beginning”. Usually used in reference to contracts to indicate their existence or validity relates back to their creation like an (unlawful) contract ‘ab initio’ meaning the contract was void during its entire alleged existence.

Deliberate voluntary relinquishment of property or a right, normally because the expense involved in salvaging or recovering the property or right would be greater than its value once recovered or preserved. Also known as Constructive Total Loss.

An event or happening which is unforeseen and unintended.

Insurance risks which are accepted by an insurer, not necessarily because the underwriter believes that they are a good underwriting proposition, but more to assist or support a broker whose relationship or volume of business the underwriter values.

An event or happening which is generally considered as being beyond human control (earthquake, lightning, flood, cyclone or other natural event).

A concentration of risk where an insurer may find it has multiple risks of the same category or geographic location which substantially increases the overall exposure.

A loss is generally defined as an actual total loss where the subject matter of the insurance is either totally destroyed or changed to be unable to be used effectively.

Latin term meaning “in proportion to the value”. The term is generally used in commerce in reference to certain duties, called ad valorem duties, which are levied at certain rates per cent on the value of the subject matter.

The increased costs incurred after a property damage loss, to limit any reduction in turnover or revenue, and to maintain normal business operations. These expenses could include such items as hiring alternate premises, temporary staff, additional freight or storage etc. (Most policies limit the amount they will pay for these costs to the amount th [..]