| Term | Definition |
| < | Greater or higher |
| > | Lower or reduced |
| Ab Initio | Ab initio is a Latin term. Where an Insured has provided false or fraudulent information when applying for insurance, the insurer can avoid the contract ab initio, meaning from inception. A policy contract avoided in this way is deemed as not having been in effect at all. The Insurance Contracts Act allows an insurer to avoid or cancel a policy ab initio (from inception) if the Insured has made fraudulent misrepresentations or deliberate non-disclosure when proposing the insurance to the insurer. |
| Abandonment | Arising, usually during the course of a claim settlement, the Insured may be able to or have the right to, abandon or surrender insured property to the Insurer in lieu of financial settlement or recompense from the insurer, as a partial or total settlement of the claim. |
| Abandonment (Marine Insurance) | Detailed in the Marine Insurance Act 1909 Sections 66-69 Abandonment is a condition precedent to a Constructive Total Loss being declared and there are a set of procedures and legal consequences surrounding the Insured giving of Notice of Abandonment to the Insurer. It should be noted that (a) the Insurer is not bound to accept the Notice of Abandonment however if the notice is properly given the Insured is not prejudiced by the fact that the Insurer did not accept the notice and (b) the Insurer may waive the requirement for notice of abandonment to be given. No notice is required if, at the time the Insured becomes aware of the loss, there is no possibility of benefit to the Insurer if notice was given. |
| Absolute | Means that any loss due to the excluded peril whether as the remote or proximate cause is not covered. E.g. This policy does not cover any loss occasioned by or happening through faulty workmanship, faulty design or faulty materials. Please refer to the actual policy wording before making your final decision. |
| Absolute Liability | The term used to describe liability for damages even though prima facie fault and or negligence cannot be proved. |
| Acceptance | Acceptance of the insurance contract by an insurance underwriter. Usually refers to the point in time at which the insurer places cover on a proposed item(s). |
| Accident Cover | Insurance covering a claim for injury or death arising from an unforeseen event (Accident) or violence. Can be subject to test or requiring evidence to establish the cause as being Violent, External and Visible means. This test or requirement is usually applied, because one may reasonably argue that becoming ill is an accident, thereby making an "Accident Only" type policy a De Facto Accident and Illness Policy. Applying the Violent, External and Visible means test and or requirement more clearly defines the intent of the cover provided. |
| Accident Year | May also be referred to as "year of occurrence". Insurers calculate Profits or Losses based on information for the accident year rather than strictly a fiscal year basis. Loss payments and reserves on losses are allocated to the year in which the loss has occurred (accident year). Information on loss payments and or reserves for losses which have occurred within a particular accident year are monitored in time intervals (e.g. monthly, quarterly, yearly). The losses allocated to a given accident year are measured against the earned premium income of the same annual period. Statistical information gathered on an accident year basis is important to insurers for future underwriting decisions. Loss incurred but not reported are part of this equation. See also IBNR. |
| Accidental Damage | Mostly refers to damage to property rather than injury. May also be referred to Fortuitous Loss and Damage. Damage or injury occurring from an unexpected, unforeseen mishap or untoward event. Loss arising from an event which is not expected or designed. In many policies such as an ISR or Business Pack the meaning of this term is defined. |
| Accidents | In insurance terms, events that are not deliberately caused by the insured and that are not inevitable. Thus, if you deliberately cause damage by driving your car into a tree, the damage is not insured. Similarly, insurers may argue that if you carry out a large excavation in soft soil without appropriate bracing, damage to surrounding property is inevitable and you may not be able to claim any insurance. |
| Accounting Year | May also be called fiscal or financial year, and may vary from the calendar year. In Australia, the accounting year is typically from 1 July to 30 June, but it can be altered by agreement with the Australian Tax Office. In New Zealand, the accounting year is from 1 April to 31 March. |
| ACCOW | Additional Increased Cost of Working - Sometimes referred to in some policies as Additional Expenditure |
| Accumulation Control | The monitoring by insurers of aggregate property sums insured by geographical reporting areas such as ICA zones. |
| ACOD | Accident Circle Occupational Diseases clauses |
| Acquisition Costs | The cost of the Insurer acquiring a business including commissions, brokerage, taxes, etc. but not including general administrative costs and or operating expenses. For a reinsurer it is the acquisition costs including reinsurance commission, reinsurance brokerage, reinsurance premium tax and other costs (such as fire brigade charges and other levies). |
| ACR | Additional Case Reserves |
| Act of God | A term that is no longer widely used in the Australian or New Zealand insurance markets, but refers to an act occasioned exclusively by naturally occurring forces, being uncontrolled and uninfluenced by the power of man. An act of God is typically of such a character and/or magnitude that it could not have been overcome, prevented or escaped from by any amount of foresight or prudence, e.g.. tsunami, tempest, lightning, perils of the sea, earthquakes. |
| Activation | The implementation of Business Continuity procedures, activities and plans in response to a Business Continuity Emergency, Incident, Event and/or Crisis (E/I/E/C) See: Invocation |
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