Glossary of Terms

Glossary of Terms


Accident – an unexpected event or circumstance without deliberate intent.

Accrued bonuses – the accumulated bonus given in addition to the sum assured by the insurer on a with-profits basis.

Accrued interest – the accumulated interest since the principal investment into the Wealth Enhancer

Actuary – business professional who analyses probabilities of risk and risk management including calculation of premiums, dividends and other applicable insurance industry standards.

Advance Payment Bond – a cover which protects a contractor against defaulting from an advance payment agreement.

Agent – an individual or company who sells insurance policies on behalf of Sacos.

All Machinery Insurance – a cover which protects the insured against cost of repair or replacement of essential plant or machinery in a construction business, arising from accidental causes.

Approved repairer – a repairer from our approved network authorised to repair the damaged vehicle of the insured.

Arbitration – a binding dispute resolution tactic whereby a conciliator with no interest in the outcome intercedes.

Assumed reinsurance – the assumption of risk from another insurance entity within a reinsurance agreement or treaty.

Assured – refers to the policyholder and is more commonly used to refer to life assurance policyholders. In Group Personal Accident, the term refers to the employer of the insured person.


Beneficiary – an individual who may become eligible to receive payment as a result of the death of the insured.

Bodily injury – physical injury incurred as a result of an accident.

Both to blame collision clause – the insurer indemnifies the insured against any liability arising from a “Both to blame collision clause” charge brought about by a third party carrier.

Broker – an individual who receives commissions from the sale and service of insurance policies. These individuals work on behalf of the customer and are not restricted to selling policies for a specific company but commissions are paid by the company with which the sale was made.


Claim – a request made by the insured for insurer remittance of payment due to loss incurred and covered under the policy agreement.

Commercial Motor Vehicle Insurance – coverage for motor vehicles owned by a business engaged in commerce that protects the insured against accidental collision or overturning, fire, lightning, burglary, theft, malicious acts and damage in transit including during the processes of loading and unloading, legal liability to third parties,

Commercial Property – property insurance coverage sold to commercial ventures.

Commission – a percentage of premium paid to agents by insurance companies for the sale of policies.

Comprehensive Cover – a motor insurance coverage which protects the insured against collision or overturning caused as a result of accidental impact or mechanical breakdown, fire, explosion, lightning, self-ignition, burglary, theft, attempted theft and malicious act.

Conditions – also referred to as provisions, these are contingencies outlined in an insurance policy.

Contents – household goods and all other personal property, all of which are owned by or are the legal responsibility of the insured or of any permanent member of the insured’s household.

Contractors’ All Risk (CAR) –this coverage insures against loss to buildings in the course of construction. The coverage also includes machinery and equipment used in the course of construction and to materials incidental to construction.

Contractual Liability – liability coverage of an insured who has assumed the legal liability of another party by written or oral contract. Includes a contractual liability policy providing coverage for all obligations and liabilities incurred by a service contract provider under the terms of service contracts issued by the provider.

Corporate Health Insurance – health insurance issued to employers, associations, trusts, or other groups covering employees or members and/or their dependents, to whom a certificate of coverage may be provided.

Covered lives – The total number of lives insured, including dependents, under individual policies and group certificates.


Damage caused by aircraft – destruction of or damage caused by aircraft and other devices or articles dropped therefrom excluding destruction or damage occasioned by pressure waves caused by the aircraft and other aerial devices travelling at sonic or supersonic speeds.

Date of commencement – date when the organisation first became obligated for any insurance risk via the issuance of policies and/or entering into a reinsurance agreement. Same as “effective date” of coverage.

Date of issue – date when an insurance company issues a policy.

Date of maturity – the effective date in which the policy has reached its maturity and policy payment is due.

Direct loss – Damage to covered real or personal property caused by a covered peril.

Directors and Officers Liability – liability coverage protecting directors or officers of a corporation from liability arising out of the performance of their professional duties on behalf of the corporation.


Effective date – date at which an insurance policy goes into force.

Employers’ Liability Policy – employers’ liability coverage for the legal liability of employers arising out of injuries to employees.

Endorsement –an alteration to the terms of the policy.

Engineering insurance – a generic term used to describe coverage related to construction.

Exceptions – see exclusions.

Excess – Portion of the insured loss paid by the policy holder.

Excess of loss reinsurance – loss sharing mechanism where an insurer pays all claims up to a specified amount and a reinsurance company pays any claims in excess of stated amount.

Exclusions – also referred to as exceptions, these are losses, damage or services that are not covered under an insurance policy.


Fees payable – fees incurred but not yet paid.

Fire and Special Perils –coverage for businesses against multiple perils including fire, burglary, theft, lightning, flood, storm etc.

Fire Policy – coverage protecting the insured against the loss to commercial or personal property from damage caused by the peril of fire or lightning etc.


Gross Written Premium – total premiums generated from all policies (contracts) written by an insurer within a given period of time.

Group Personal Accident Policy – coverage written on a group basis (e.g. employees of a single employer) that pays scheduled benefits or medical expenses caused by accidental injury or accidental death.


Hazard – circumstance which tends to increase the probability or severity of a loss.

Health Insurance – coverage against medical, obstetric care and surgical expenses for inpatient treatment incurred by the insured.

Householder’s Policy – a package policy combining real and personal property coverage with personal liability coverage. Coverage applicable to the dwelling, appurtenant structures, unscheduled personal property and additional living expense are typical. Includes mobile homes at a fixed location.

Hull Insurance – coverage for damage to a vessel or aircraft and affixed items.


Indemnity, Principle of – a general legal principle related to insurance that holds that the individual recovering under an insurance policy should be restored to the approximate financial position he or she was in prior to the loss. Legal principle limiting compensation for damages be equivalent to the losses incurred.

Individual Health – health insurance where the policy is issued to an individual covering the individual and/or their dependents in the individual market. This includes conversions from group policies.

Insurance – an economic device transferring risk from an individual to a company and reducing the uncertainty of risk via pooling.

Insured – a person or business covered by an insurance policy.

Insurer – a registered insurance company in Seychelles.


Junior Plan – a life assurance plan designed for children above the age of one. The child is referred to as the insured.

Jurisdiction clause – a cause which determines the limits to the policy in terms of jurisdiction.


Lapse – termination of a policy due to failure to pay the required renewal premium.

Liability Insurance – a generic term used to refer to a coverage which indemnifies the insured from the risk of lawsuit and legal liability such as malpractice, injury or negligence.

Limits – maximum value to be derived from a policy.

Loss of Use – policy providing protection against loss of use due to damage or destruction of property.


Malpractice – alleged misconduct or negligence in a professional act resulting in loss or injury.

Malicious damage – loss or damage directly caused by any malicious act of any person whether or not such act is committed in the course of a disturbance of peace.

Marine Cargo – coverage for ocean transportation exposures; goods or cargoes; ships or hulls; earnings; and liability.

Marine Hull – a coverage which protect the insured’s vessels.

Marine insurance –a generic term used to describe coverage against assets such as vessels, boats, ships etc.

Market value – fair value or the price that could be derived from current sale of an asset.

Maturity – the policy has reached its full term.

Mortgage Protection – coverage to provide security on loans provided by financial institutions in the event of the insured’s death or Total and Permanent Disability.

Motor Insurance Disc – a disc that is provided to the insured by the insurer upon payment of motor insurance.


Named Peril Coverage – insurance for losses explicitly defined in the policy contract.

Negligence – failure to exercise reasonable consideration resulting in loss or damage to oneself or others.


Peril – the cause of property damage or personal injury, origin of desire for insurance.

Period of insurance – the period in which the insurance is covered under the policy.

Permanent Life Insurance – policy that remains active for the life of the insured.

Personal Accident – a coverage which protects the insured against bodily injury resulting from an accident.

Personal Auto Policy – coverage designed to insure private passenger automobiles and certain types of trucks owned by an individual or husband and wife.

Policy – a written contract ratifying the legality of an insurance agreement between the insurer and the insured.

Policy period – time period during which insurance coverage is in effect.

Policyholder – an individual or business which has signed a policy with the insurer, also referred to as the insured.

Pool – an association organized for the purpose of absorbing losses through a risk-sharing mechanism thereby limiting individual exposures.

Preferred risk – insured, or applicant for insurance, who presents likelihood of risk lower than that of the standard applicant.

Premium – Money charged for the insurance coverage reflecting expectation of loss.

Professional Indemnity – coverage available to pay for liability arising out of the performance of professional or business related duties, with coverage being tailored to the needs of the specific profession. Examples include abstracters, accountants, insurance adjusters, architects, engineers, insurance agents and brokers, lawyers, real estate agents, stockbrokers.

Proposal form – a form completed by the insurer when applying for insurance coverage.

Proposer – a parent or guardian who takes out a policy on behalf of a child. The child is referred to as the insured in this case.

Provisions – see conditions.

Public and Product Liability – insurance coverage protecting the manufacturer, distributor, seller, or lessor of a product against legal liability resulting from a defective condition causing personal injury, or damage, to any individual or entity, associated with the use of the product.


Reinstatement – a clause that states when coverage terms are reset after the insured files a claim. In Fire Policy, the clause refers to the restoration of the damaged property.

Reinsurance – a transaction between a primary insurer and another licensed (re) insurer where the reinsurer agrees to cover all or part of the losses and/or loss adjustment expenses of the primary insurer. The assumption is in exchange for a premium. Indemnification is on a proportional or non-proportional basis.

Reinsurer – company assuming reinsurance risk.

Renewable Term Insurance – insurance that is renewable for a limited number of successive terms by the policyholder and is not contingent upon medical examination.

Reported losses – Includes both expected payments for losses relating to insured events that have occurred and have been reported to the insurance company, but not yet paid.

Risk – Uncertainty concerning the possibility of loss by a peril for which insurance is pursued.

Road Fund License – license issued to a vehicle owner by the Seychelles Licensing Authority which provides permission to operate a vehicle on the road.


Schedule – a document forming part of the policy which includes details of the insured and specifies the coverage provided.

Self insurance – in the event of damage to an underinsured property, the insurer will only bear a portion of the cost of damage which reflects the portion of the sum assured against the real value of the property. By virtue of the underinsurance, the insured accepts the risks of self financing part of the damage.

Strike and riot – any act committed in the course of a disturbance of the public peace by any person taking part together with others in such disturbance; any wilful act of anyone striker or locked-out worker done in furtherance of a strike or in resistance to a lock-out whether or not such act is committed in the course of a disturbance of the public peace.

Subrogation – situation where an insurer, on behalf of the insured, has a legal right to bring a liability suit against a third party who caused losses to the insured. Insurer maintains the right to seek reimbursement for losses incurred by insurer at the fault of a third party.

Subrogation clause – section of insurance policies giving an insurer the right to take legal action against a third party responsible for a loss to an insured for which a claim has been paid.

Sum assured – the maximum amount payable under the policy, before bonuses are added.

Sum insured – the maximum amount payable under the policy in respect of any claim for loss or damage following the occurrence of an insured event.

Surrender value – calculation based on total premiums paid, accrued benefits, bonuses and outstanding dues. The surrender value is due only after 3 full years of premium payment and before the date of maturity.

Survival benefits – benefits accrued on the policy upon survival of the insured on the date of maturity.


Term – period of time for which policy is in effect.

Terrorism – an act of violence or an act dangerous to human life, tangible or intangible property or infrastructure with the intention or effect to influence any government or to put the public or any section of the public in fear.

Third party – person other than the insured or insurer who has incurred losses or is entitled to receive payment due to acts or omissions of the insured.

Third Party Only – a motor insurance cover which protects only a third party against loss or damage caused by the insured.

Total and Permanent Disability – certified by a medical practitioner that the insured/assured is completely impaired and is unable or unfit for work.

Travel Insurance – covers financial loss due to trip cancellation/interruption; lost or damaged baggage; trip or baggage delays; missed connections and/or changes in itinerary; and casualty losses due to rental vehicle damage.

Treaty – a reinsurance agreement between the ceding company and reinsurer.


Underwriter – person who identifies, examines and classifies the degree of risk represented by a proposed insured in order to determine whether or not coverage should be provided and, if so, at what rate.

Underwriting – the process by which an insurance company examines risk and determines whether the insurer will accept the risk or not, classifies those accepted and determines the appropriate rate for coverage provided.

Underwriting risk – section of the risk-based capital formula calculating requirements for reserves and premiums.

Unit-linked fund – a pool of investments for the Wealth Enhancer product.

Unitholders – investors within the unit-linked fund.


Workers’ Compensation – insurance that covers an employer’s liability for injuries, disability or death to persons in their employment, without regard to fault, as prescribed by state or federal workers’ compensation laws and other statutes.

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