Ignition temperature

Also known as auto-ignition temperature. The temperature above which combustion is self-supporting. See Flashpoint.

Impact

An additional peril that may be added to a property or business interruption insurance covering the risk of third party (or sometimes own) vehicle and animal damage to insured property.

Implied conditions

Those conditions that are assumed to apply by law to an insurance contract whether specifically stated in the contract or not, for example to act as if uninsured by safeguarding property.

In and out policy

A policy covering stockbrokers against losses due to infidelity of their staff, forged or stolen documents and the misappropriation or loss of documents or money.

Inception

The actual commencement of policy cover.

Inception hazard

The level of risk posed (usually in property insurance) of an incident that could give rise to the operation of an insured peril.

Income protection

A long-term insurance that pays a regular benefit for periods of disability that exceed the deferred period up to the chosen ceasing age. Also known as permanent health insurance (PHI), long-term disability insurance and disability insurance.

Increase in cost of working (ICOW)

Also known as additional expenditure. One element of cover provided under a business interruption policy that is designed to allow the insured to incur reasonable additional expenditure to avoid or diminish any reduction in turnover following a loss, but not exceeding the amount of the loss that would otherwise be payable under the policy. See also Additional increase in cost of working.

Indemnity

(a) For general insurance policies (other than those providing defined benefits and business interruption policies): exact financial compensation sufficient to place the insured in the same financial position after a loss as he enjoyed immediately before the loss occurred.

(b) For business interruption policies: exact financial compensation sufficient to place the insured in the same financial position after a loss as he would have enjoyed had the loss not occurred.

(c) A term used in private household insurance to describe the basis of settlement for a loss that takes into consideration wear and tear and depreciation, as opposed to new for old cover.

Indemnity period

A period (usually not less than 12 months) chosen by the holder of a business interruption policy as the time limit for determining payment of a claim. It is intended to represent the maximum period required to return to full trading including regaining market share.

Indemnity to principal

A requirement in a contract for the contractor to provide an indemnity to a principal, or a requirement for the contractor to extend his public liability policy so that the principal is indemnified as if he were the insured; the indemnity to principal clause satisfies this second requirement. The extension to cover is usually provided freely by insurers where the contract is one for the performance of work.

Independent liability method

A means used to calculate the apportionment of a loss between insurers liable to share the loss under contribution rules. Each insurer's liability is assessed as if it were the only policy and the insured element then shared in proportion to each insurer's liability.

Index-linking

An ongoing method of adjusting sums insured and premiums in line with a stated index (usually of prices or incomes).

Inland marine

Insurance transacted by marine insurers on risks other than a, for example traffic on inland waterways.

Inspection

See Engineering insurance.

Instalment premium

A premium that is expressed as annual but is met by a series of payments at more frequent intervals, the total being payable even if the insured event occurs when one or more instalments are outstanding.

Institute clauses

Marine policy wordings and clauses drafted by a joint committee of the International Underwriters' Association of London (IUA) — previously the Institute of London Underwriters (ILU) — and Lloyd's Underwriters' Association (LUA) and published by Witherby.

Insurable interest

A financial relationship recognised at law between the insured and the subject-matter of the insurance giving the legal right to insure. The insured shall be so related to the subject-matter that he will benefit from its safety or the absence of liability or will be prejudiced by its loss, damage or the existence of liability.

Insurance

See Certificate of insurance.

Insurance ombudsman

A person appointed under the terms of the Financial Services Compensation Scheme who investigates and adjudicates on differences between insurers and insured, if requested by the insured. Procedural requirements exist and there is a financial ceiling for eligible claims.

Insurance premium tax (IPT)

A levy, expressed as a percentage of premiums, imposed by the UK government and payable in respect of general insurances. The tax does not apply to reinsurances or to ocean hull and ocean cargo business.

Insure

(a) To grant insurance.

(b) To obtain insurance.

Insured

The person or legal entity covered by an insurance policy.

Insured only driving

Same as owner only driving.

Insurer

The party to an insurance contract that undertakes to pay valid claims. Same as assurer (used in marine and life classes of business).

Internal risks

The term used to describe motor trade insurances that relate to vehicles (owned or in the motor trader's custody or control) while not on a public road. Cover is provided on a third party, or damage and third party basis. See Comprehensive road and garage, Road risks.

Interruption insurance

Same as Business interruption insurance.

Intervening cause

A new cause (novus actus interveniens) that breaks a chain of events, introducing a new dominant element. See Proximate cause.

Introductory discount

A common practice in private motor insurance to permit a no-claim discount in order to attract good quality business where there is no transferable no-claim discount possible, for example an additional car or previously driving a company car.

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