Package policy

A general insurance policy that combines a number of different classes of insurance.

Particular average

In marine insurance, partial loss or damage of the subject-matter of insurance by a marine peril.

Particular charges

In marine insurance, expenses incurred by or on behalf of the assured to prevent or minimise a loss of the subject-matter of insurance by an insured peril, once such peril has occurred. These are payable in addition to the sum insured.

Particular risks

Those risks that are localised or apply to individuals or a small section of the community. See Fundamental risks.

Particulars of claim

The preferred term for "statement of claim" under civil procedure rules, setting out details of the amounts being claimed by the claimant.

Payroll basis

A type of cover under a business interruption policy whereby wages, salaries and National Insurance contributions are all covered in full; the premium is heavily discounted for this element in recognition of the fact that the whole amount is not realistically at risk. See Dual wages basis.

Pecuniary insurance

A general term used to group together insurances that relate to money or consequential monetary loss, including money, fidelity guarantee and business interruption. It has its origins in the categories used in the Department of Trade and Industry returns.

Penalty

The sum payable under a bond for a breach of its terms.

Performance bond

Same as Contract guarantee.

Peril

(a) A possible cause of loss, such as fire.

(b) A defined contingency insured under a property or pecuniary policy.

Perils of the sea

This refers to fortuitous accidents and casualties as opposed to the ordinary action of weather. The ship's log will provide evidence of this.

Period of grace

Same as days of grace.

Permanent partial disablement (PPD)

A benefit payable under a personal accident policy that provides cover for different specified percentages of the permanent total disablement amount for loss of (use of) specific parts of the body, for example the big toe or the index finger. Benefits are provided on what is known as the continental scale.

Permanent total disablement (PTD)

A benefit payable under a personal accident policy only if the insured person is totally disabled and unable to carry out any occupation. Some policies extend cover so that disability relates only to the insured person's usual occupation.

Personal accident and sickness insurance

As Personal accident insurance but with the addition of a capital sum for blindness or paralysis and a weekly benefit for sickness.

Personal accident insurance

A general insurance benefit policy that pays capital benefits (or weekly benefits for a specified period) for death or disablement consequent on accident. Policies may be issued for individuals or for groups.

Physical hazard

A factual characteristic of the insured risk (or some physical aspect closely related to it) that increases the possibility of a loss arising from a peril or event covered by the policy or that may adversely influence the extent of loss, damage or liability.

Pilferage

(a) Loss of stock that cannot be attributed to particular incidents or events.

(b) Abstraction of small items/amounts from goods being transported.

Plain English

A campaign that has gained ground and whose endorsement many insurers in the UK consider valuable as a marketing aid. It is particularly prevalent as a feature of motor insurance, the Crystal mark award for clarity being highly prized.

Pluvius insurance

Insurance in respect of loss from adverse weather conditions, notably rainfall, commonly used for events such as motor racing meetings and weddings.

Pneumoconiosis

A medical condition that arises from the inhalation of dust; a source of many long-tail employer's liability claims. See also Asbestosis.

Policy

A document that is evidence of the existence of the contract of insurance and sets out the agreed terms, conditions and limitations.

Policy fee

A charge made by an insurer for issuing a policy, as distinct from the risk premium.

Policyholder

The insured person, persons or company.

Political risks exclusion

A policy exclusion found principally in investment or credit insurance (though it is also used in property insurances for overseas risks) to describe those risks that arise directly from political action or by virtue of a political state of affairs beyond the control of the parties to the insurance contract, such as currency transfer delays, moratoria or civil war.

Pollution liability

A liability, linked to contamination, which is excluded from most public and marine liability policies unless caused by a sudden, identifiable, unintended and unexpected incident. See also Environmental impairment liability.

Preamble

Same as recital clause.

Premises risk

A term used in public liability insurance where the only significant risk relates to the possibility of injury or damage to those visiting the premises and where measures of exposure such as turnover are not relevant. Such risks are often flat-rated.

Premium

The consideration payable by the insured for an insurance.

Pressure plant

See Boiler and pressure plant.

Primary insurance

(a) The first layer of an insurance arrangement.

(b) A term used to refer to direct insurance, to distinguish it from reinsurance.

Probable maximum loss (PML)

Same as estimated maximum loss.

Product guarantee insurance

A specialist extension to cover (not included under the standard terms of a public/products liability policy) that provides for legal liability for injury or damage caused by products and that arise from the failure of the product to fulfil its intended function. See also Efficacy risk, Product recall insurance.

Product liability insurance

A policy that is subject to a limit of indemnity for any one loss or series of losses flowing from one event and an aggregate limit for the policy period, designed to pay for third party property damage and personal injury arising from goods sold, supplied, repaired, serviced or tested by the insured. Cover is often provided as an extension to a public liability policy.

Product recall insurance

A specialist extension to cover (not included under the standard terms of a public/products liability policy) that provides for the costs associated with recalling faulty or dangerous goods, provided the insured has made the decision to recall them and failure to recall is likely to create a legal liability otherwise provided for by the policy. See also Product guarantee insurance.

Professional indemnity insurance

A claims-made policy covering legal liability for losses sustained as a result of wrong, negligent or misleading advice or treatment given by a skilled professional. Such insurances are commonly found in the legal, insurance and medical professions.

Profit commission

An additional remuneration paid to an intermediary, often in connection with scheme arrangements, to reward a pre-agreed satisfactory loss ratio for the business.

Profits insurance

Same as business interruption insurance.

Promissory warranty

A declaration by the insured that a state of affairs exists or will continue to exist during the currency of the policy, for example the setting of an intruder alarm at specific times. See Warranty.

Property owners' liability

A separate policy or standard part of a household buildings insurance providing cover for legal liability for third party personal injury and property damage arising from the ownership of the buildings.

Proposal

An application for insurance. Practice varies in different classes of insurance as to the form a proposal takes. Printed forms are common for many types of insurance (in which case, in addition to the main questions, the proposer is required to sign a declaration stating that information is full and complete to the best of the proposer's knowledge and belief). Telephone calls are often used, and no paper record kept, particularly for private motor insurance by direct writers.

Proposer

The person, persons or company submitting a proposal for insurance.

Pro rata

Proportionate.

Pro rata condition of average

See Average condition.

Prospectus

A publication, sometimes accompanying or forming part of a printed proposal form, giving a description of the cover provided by the standard policy and details of optional extensions or restrictions.

Protected no-claim discount

An option available to private motor policyholders, who have (usually) at least four claim-free years, to pay an additional premium in return for their no-claim discount remaining intact even if there are (a defined modest number of) fault claims in the future.

Protection and indemnity club

A mutual indemnity marine association. See Protection and indemnity risks.

Protection and indemnity risks

Certain risks (including some major areas of marine liability insurance) not readily available in the marine insurance company market or Lloyd's that are catered for by protection and indemnity clubs.

Protracted default

In credit insurance, failure to pay a debt within 90 days.

Proviso

A condition in a contract of insurance that goes to the heart of the contract, the terms of which must be met for the insurance to remain valid. See Material damage warranty.

Proximate cause

Defined as "the active, efficient cause that sets in motion a train of events which brings about a result, without the intervention of any force started and working actively from a new and independent source" (Pawsey v Scottish Union and National 1907). It follows that it is not necessarily the first or last, but the dominant cause.

Public liability insurance

A policy that is subject to a limit of indemnity for any one loss or series of losses flowing from one event, designed to pay for third party property damage and personal injury arising from the business of the insured. Cover is often extended to include products liability insurance. Liability policies may be issued on a losses occurring or claims made basis.

Public utilities clause

An extension to the provisions of a business interruption insurance that provides cover in the event of an insured peril causing damage to the premises of the specified supply authority, leading to a reduction in turnover at the insured's premises.

Punitive damages

Also known as exemplary damages. Damages awarded by a court, not on the basis of compensation, but in order to punish the defendant because of some particular aspect of the loss or damage or the defendant's conduct. It is mainly a feature found in the US legal system.

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