Indemnity

The legal principle which ensures that a policyholder is restored to the same financial position after the Loss as he was in immediately prior to the Loss.

Inner Limit

A limit of cover within the policy providing cover for certain activities at a different limit to the main indemnity of the policy. This inner limit may be on a different basis for example an aggregate limit whereas the main policy is “any one claim”. The excess may also be different to that of the main policy.

Innocent Non-Disclosure Clause

This clause states that where you are able to establish to the underwriters satisfaction that any non-disclosure or misrepresentation of material facts was innocent then underwriters will not avoid liability under the policy. In practice this can be difficult to achieve as you will undoubtedly be asking the underwriter to admit a claim he may otherwise avoid.

Insurance

A contract whereby a sum of money or some other benefit is payable upon the happening of an event which involves a degree of uncertainty, either as to the happening of the event or as to the date on which the event will occur.

Insurance Brokers Registration Council (IBRC)

The regulatory body set up under the Insurance Brokers (Registration) Act 1977.

Insurance Premium Tax

Tax levied by the UK governments on certain classes of insurance. Commercial insurance cover including Professional Indemnity Insurance is taxed at 5%.

Insured’s Contribution

The amount the insured agreed to pay in respect of a loss as a result of a claim on the policy. This could be an agreed percentage or a fixed sum. See also Excess, Excess cost in addition and Excess costs inclusive.

Insured

The Policyholder - the person(s) protected in case of a Loss or Claim.

Insurer

The person offering insurance policies in return for a Premium.