Damages

Financial compensation or sums awarded by a court or agreed between the parties to an action that falls under one or more of the following headings:

(a) Special damages (those that are compensatory in nature, such as loss of earnings).

(b) General damages (those that relate to less easily defined amounts, for example pain and suffering).

(c) Exemplary (or punitive) damages (intended to punish a defendant rather than measuring the claimant's loss). See also Contemptuous damages, Nominal damages.

Data protection

Protection provided to individuals under the terms of the Data Protection Act 1998 in relation to the holding and use of personal data by third parties.

Day one cover

A means of making provision for inflationary increases for buildings or machinery sums insured under a property policy during the forthcoming period of insurance. This is usually on an adjustable basis and the pro rata condition of average is triggered only if the declared value of property was understated at the beginning of the period of insurance. See also Average condition.

Days of grace

Also known as "period of grace". A period (usually 15 days) after the renewal date of a policy during which cover continues provided that the premium is paid during that time and also provided that the insured has not indicated an intention not to renew the policy. For private and commercial motor insurance (involving the issue of a certificate of motor insurance) no period of grace is permitted. However, insurers always print a 15 day certificate on their renewal documentation granting the minimum cover required by law. In strict terms it is this cover only that applies between renewal date and the date of payment of the premium. Some classes of insurance (such as professional indemnity) offer no days of grace.

Declaration

(a) A statement on a proposal form signed by a proposer affirming the truthfulness of answers "to the best of his or her knowledge or belief".

(b) A periodic return made by the insured under a declaration policy, for example monthly stock values.

Declaration-linked Policy

A means of insuring business interruption risks, without the application of average, by linking sums insured to actual trading figures and adjusting premiums at the end of the policy period to reflect actual exposure.

Declaration policy

A policy under the terms of which the insured is obliged to declare periodically the value of items that fluctuate throughout the year, for example monthly stock values, the premium being adjusted to reflect actual exposure at the end of the policy year.

Declared value

The insured's estimate of the total reinstatement cost of buildings or machinery insured under a fire policy on a day-one basis.

Declinature

The refusal of an insurer to accept a new proposal or renew an existing policy.

Deductible

The first amount of each and every loss for which the insured is responsible. The amount is usually expressed as a fixed sum and historically has tended to be very sizeable (if relatively modest it was termed an excess). However, in current practice these terms are interchangeable.

Defective title indemnity

A policy covering any capital loss or damages awarded against an insured who has acquired property, arising from the fact that title to it is in some way defective, often through documents being lost.

Defendant

The party being sued in a legal action. See Claimant.

Deferred (or deferment) period

Same as time excess.

Delay

(a) A section of a holiday or travel policy that provides for a fixed sum to be paid if the commencement of a holiday is delayed through specified events, such as industrial action.

(b) A standard exclusion in cargo insurance, though a potential cause of financial loss to traders.

Demurrage

An amount payable to a ship owner or railway operator for failure to load or discharge goods within an agreed period.

Denial of access

An extension of cover available under a business interruption policy that provides indemnity in the event of damage (by perils insured under the policy) being caused elsewhere than at the insured premises but as a result of which there is no, or limited, access to the insured premises, thus affecting turnover.

Deposit premium

(a) An initial payment in advance as a deposit pending determination of the actual premium.

(b) A premium for an adjustable policy where the exposure factors can only be estimated in advance; this is subsequently adjusted at the end of the policy period to reflect actual exposure; see Adjustable premium.

Description of use

One of the main sections prescribed by the Road Traffic Act 1988 and found in a certificate of motor insurance specifying the use to which the vehicle may be put. Cover for use beyond the scope of that stated in the certificate wording is excluded (except as required by the Act).

Design risks

A general term that includes designing, planning and the formula or specification of goods. If this work is carried out in isolation and does not involve actual work to be carried out or products supplied — being carried out for a fee — it is generally excluded from the cover provided by a public/products liability policy: professional indemnity cover is more appropriate.

Deterioration of refrigerated stock insurance

A policy that covers damage to or deterioration or putrefaction of goods consequent on failure or breakdown of refrigeration plant provided that the cause is not the deliberate act of the electricity supply company.

Difference in conditions policy (DIC)

A master policy that provides an agreed policy wording for a multinational organisation, so that claims that fall within its terms but outside any locally arranged cover will be paid under the master policy. It is often combined with a difference in limits policy as a single arrangement.

Difference in limits policy (DIL)

A master policy that provides an agreed level of cover for a multinational organisation, so that it acts as a topping up mechanism for claims that fall within its limits but that exceed any locally arranged cover. It is often combined with a difference in conditions policy as a single arrangement.

Digital communicator

An intruder signalling method that uses a standard telephone system signalling to a central station with disadvantages of no continuous monitoring and possible interference from use of the line for speech.

Direct line

An intruder signalling method using a dedicated intruder alarm system signalling to a central station with continuous signal monitoring.

Direct writers

The term used to describe (mainly private motor) insurers who have pioneered the use of call centre technology and encouraged members of the public to insure directly, without the involvement of any intermediary.

Directors' and officers' liability cover

A policy providing cover for directors and officers of companies in respect of claims made against them in that capacity.

Disclosure

(a) See Duty of disclosure.

(b) The preferred term for discovery under the Civil Procedure Rules, by which parties to an action are bound to divulge all relevant information.

Discovery

See Disclosure.

Discovery period

(a) The period within which a defalcation must be
discovered and notified to insurers under a fidelity guarantee policy.

(b) An extensible period under a claims-made liability policy for acts committed during the policy period but discovered after its expiry.

Double or dual insurance

More than one insurance on the same risk. See also Contribution.

Dual wages basis

One element in a business interruption policy, which continues in use in some territories, that provides cover for 100% of wages for a chosen period plus a much lower percentage for the balance of the indemnity period, with a consolidation option. Payroll basis has largely superseded this method in the UK.

Duty of disclosure

The duty of the proposer voluntarily to disclose all material facts about the risk whether requested or not. See also Utmost good faith.

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