Insurance companies love to use jargon. Some insurance policies make attempts to write in plain English, but even the best have trouble resisting some words like “third party” or “product liability”.
Here are simple explanations for some of the most common insurance terms you might come across through your business and vehicle insurance:
It doesn’t mean you, the reader. The insurers use it to mean a range of different people depending on the type of insurance. It generally means you the business, you the owner, you the employee and you the family members. Also called: The Insured;
Third part means everyone who isn’t “You” (the 1st party) or the insurer (the 2nd party). It means the man on the street, the building down the road and the customers you do work for.
Liability means “responsibility.” When it is paired with something like “public liability” it means responsibility to the public at large, and “legal liability” means your responsibility to follow the law.
Period of Insurance
Period of Insurance means the dates that the insurance policy runs for. The start date is the “inception date” and the end date is the “expiry date.” The days between is the period you have paid insurance for.
Market Value means the worth of the item (like a car, a prime mover, a spray-gun) before the claim happened. It takes into account the individual item, so the market value for a 2010 Toyota Hilux that has been polished every week would be different to one that goes bush and has never gotten a service.
Total Loss means it would cost the insurance company more to repair the item than it would be replace the item. Also called: Write Off
Endorsement means one of 2 things. It can mean an update to your insurance – like changing your postal address. It can also mean a change to your insurance cover – like removing cover for overspray, or adding cover for your tools of trade.