Radioactive contamination

An exclusion found in all general insurance policies stating that no cover is provided for loss or damage caused by radioactive materials.

Rate of gross profit

Under a business interruption policy, gross profit expressed as a percentage of turnover during the financial year immediately before the date of the incident giving rise to the damage, adjusted for discernible business trends.

Ratification

The act of a principal treating a contract as valid, either expressly or by conduct, when there has been a breach or it is flawed is some way.

Rebuilding cost index

An index used to update sums insured for property insurances related to buildings, once the full rebuilding cost has been established as a baseline.

Receiver

A person appointed by a court to administer the property of a bankrupt or insane person (or property under litigation).

Recital clause

Also known as the preamble. The part of an insurance policy that identifies the parties to the contract and incorporates the proposal and declaration into the policy.

Recommended repairers

Also known as approved repairers. Motor repairers appointed by an insurance company as preferred repairers of their insureds' vehicles because of guarantees regarding workmanship, agreed hourly rates and the provision of courtesy cars. Insurers will normally permit certain repairs to be carried out without inspection, or with the use of remote digital cameras for approving repair estimates.

Rectification

Correction by a court of the wording of a contract where it is clear that, as originally expressed, it does not reflect the agreement reached between the parties.

Refrigerated stock

See Deterioration of refrigerated stock.

Rehabilitation

See Spent conviction.

Reinstatement

(a) The option available to an insurer to make good damaged property as a means of providing indemnity; in exercising this option the insurer foregoes the protection of the sum insured, must take full responsibility for the property during the period of reinstatement, and must restore to substantially the same as the pre-loss condition.

(b) The restoration of the sum insured after the payment of a claim, usually by the payment of an additional premium; see also Automatic reinstatement.

(c) The restoration of protection under a non-proportional treaty reinsurance arrangement; provision may be made for a maximum permitted number of reinstatements in any one period.

Reinstatement memorandum

An extension to a property insurance policy that moderates the operation of the average condition so that it applies only in circumstances where the sum insured represents less than 85% of the full reinstatement value. It is commonly used for commercial buildings and machinery items, but not for stock.

Reinsurance

The transfer of all or part of the risk assumed by an insurer (the reinsured or cedant) to another insurer (the reinsurer).

Removal of debris

(a) A clause in a property policy extending cover to include costs of clearing away debris, dismantling, shoring and propping up following insured damage to property.

(b) An extension to a marine cargo insurance subject to exclusions (notably pollution liability).

Renewal

See also Days of grace.
(a) For general insurance business, the continuance of an insurance beyond the initial period; the insurer is not bound to offer renewal, nor the insured to accept.

(b) For long-term insurances, the anniversary date of the policy on which the premium falls due; the insurer is bound to continue on the same terms, though the assured may allow the policy to lapse by non-payment and forfeit some or all policy benefits.

Repetitive strain injury (RSI)

Injury arising from the continued and repeated use of particular muscles or tendons, especially when using a computer keyboard. It is a source of a large number of employer's liability claims.

Replacement

One of the options available to an insurer when settling a claim under a policy of indemnity.

Replacement vehicle

See Courtesy car.

Representation

A statement by one party to a contract, on which the other party relies. In insurance this refers to a statement made by a proposer of a fact related to the risk proposed for insurance.

Restrictive covenant indemnity

A policy that pays up to a chosen limit in circumstances where a known breach of the terms of a restrictive covenant on buildings or land is subsequently enforced.

Retail prices index

An index that takes account of changes in cost of a wide range of consumer products. Used extensively in index-linked contracts to alter sums insured and premiums each renewal date, such as household contents, some life assurance contracts.

Retention

(a) The part of a risk that is the insured's responsibility.

(b) The part of a risk retained by an insurer (cedant) and not reinsured.

Reverse damages

An extension to a household or employer's liability policy giving cover to an insured person or employee in circumstances where a judgment has been made against a third party for personal injury to the insured or employee but the judgment remains unsatisfied after a specified period.

Riot

(a) A term legally defined by the Public Order Act 1986 when three or more persons with a common purpose for which they are prepared to help one another by force, display force or violence so as to alarm somebody of reasonable firmness and courage.

(b) An additional peril (often linked to damage by malicious persons) under a property insurance policy.

Risk

A term used in many different ways, most notably:
(a) the uncertainty of loss or damage.

(b) The subject-matter of insurance.

(c) Probability of misfortune.

(d) The peril or contingency insured against.

(e) Danger.

(f) Volatility of investment.

Risk management

The process of identification and control by elimination, reduction, retention or transfer of the untoward events that pose a threat to the running of a business or jeopardise its solvency.

Road risks

The term used to describe motor trade policies that cover vehicles owned by or in the custody or control of motor traders while the vehicles are being used on a public road or temporarily garaged in the course of a journey. See Comprehensive road and garage, Internal risks, Named driver basis, Points basis, Trade plate basis.

Robbery

Stealing using actual or threatened force (abbreviated from the Theft Act 1968). See Aggravated burglary, Burglary, Theft.

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