Salvage

(a) Property saved.

(b) That which remains of the subject-matter of insurance after an insurer has agreed a total loss settlement.

(b) The remuneration payable (other than by contractual obligation) to an outside party who takes part in a successful operation to save life or property at sea.

Schedule

The part of an insurance policy where all the specific risk details and variables are grouped together.

Seasonal increase clause

A provision often found in combined or package policies for shops, providing a set percentage increase in stock values over the Christmas period. A more tailor-made approach to increases and timings is usually available on request. A provision for seasonal increases is also found in many household contents policies.

Selection (against the insurer)

(a) The situation that arises when an insurer offers insurance on terms that in some way favour a class of below-average risks and the insurer attracts a disproportionate amount of such non-preferred business. This would most often occur where insurance is offered in a grouped way, for example if motor insurance were offered grouped by age range, it would naturally attract those at the younger end of each range.

(b) The insuring (or insuring on fuller conditions) of only what the insured regards as more hazardous risks. This occurs in marine cargo insurance where war risks cover is requested only when there is a real or imminent risk at a particular destination.

(c) A term describing a situation where the insured has knowledge of the risk but does not disclose this to the insurer. See Duty of disclosure, Utmost good faith.

Self-insurance

Creating and maintaining a fund to deal with identified contingencies, often used in conjunction with other risk management techniques.

Seller's/buyer's interest

See Contingency insurance.

Sentimental value

Any value attached to an article for personal or emotional reasons that is greater than its intrinsic or replacement value. It is uninsurable, since it goes beyond the exact financial compensation that is the aim of indemnity.

Short period rate

A rate of premium or sliding scale of rates that apply to insurances effected for less than one year or cancelled by the insured mid-term. The rate or scale is higher than the pro rata premium. However, if an insurer opts to give notice of cancellation mid-term, the refund of premium is normally pro rata.

Sickness benefit

A weekly benefit payable for sickness that leads to an enforced absence from work, subject to a maximum period of 52 or 104 weeks and usually available only with personal accident insurance.

Silent risk

A term used of a manufacturing or commercial risk where there are no longer any trade processes being carried on.

Slander

Defamation that is in a transient or non-permanent form, often the spoken word. See also Libel.

Social, domestic and pleasure

A class of use in a private motor policy that permits no business use. If silent on the subject, it does allow for travel to and from the insured's normal place of work, though some insurers specify this for clarity.

Soft market

An insurance market where an excess of capacity forces premium rates down, sometimes to levels that would in normal circumstances be considered uneconomic.

Sonic bangs exclusion

An exclusion found in all property and motor non-marine insurance policies relating to damage resulting from pressure waves caused by aircraft travelling at sonic or supersonic speeds.

Special condition of average

A more flexible version of the condition of average that is commonly used for agricultural produce. It requires that the sum insured must represent at least 75% of the full value if average is not to be applied. The sum insured still remains as the maximum liability of the insurer. See also Average, Two conditions of average.

Special perils

Same as Additional perils.

Special types

A general term used in motor insurance to describe vehicles of special construction, for example mobile cranes, excavators and dumpers.

Specification

An addendum to a fire policy that forms part of the schedule giving details of the property insured by the policy.

Specified vehicle

See Goods in transit.

Specified working expenses

Also known as uninsured working expenses. Those expenses that are itemised as not being insured under a business interruption policy because they vary in direct proportion to any change in turnover.

Spent conviction

A conviction that is treated as if it never happened and therefore does not need to be declared, but only after a defined period of time has elapsed (which varies according to the original sentence passed). The concept was introduced in the Rehabilitation of Offenders Act 1974.

Spontaneous Combustion

The ignition of a substance from heat engendered within itself.

Sprinkler leakage insurance

A policy that covers damage caused by the accidental discharge of water from sprinkler installations. Cover is usually provided on a first loss basis.

Sprinkler system

A local automatic fire detection and extinguishing system consisting of a pressurised water pipe network with jets, usually sealed by glass bulbs that fracture above certain temperatures. It may also be triggered by some other mechanism.

Standard construction

A term used in fire and other property insurances to denote the minimum requirements for construction of buildings in order to attract standard rates for the trade or occupation. Broadly speaking this means buildings of uncombustible materials such as brick, stone or concrete walls and slated, tiled, metal or asbestos roofs. It is commonly abbreviated to "bsst".

Standard fire policy

A term that continues to be used to describe what is now the ABI recommended wording for fire insurance policies. This form is used as the basis for fire policy wordings by most insurance companies (though not Lloyd's, which has its own standard form — see Lloyd's fire policy). Its use is not mandatory.

Standing charges

A term used in business interruption insurance to describe the expenses of running a business that are fixed or do not reduce proportionately to any reduction in turnover.

State of the art defence

A defence claiming that reasonable care was taken, or that there was a lack of foreseeability, in the light of the level of knowledge at the time of the incident giving rise to the action.

Statutory Declaration

A written statement, solemnly declared before a magisterial officer, signed as being true (under the terms of the Statutory Declarations Act 1835). The Road Traffic Acts require the completion of such a declaration when a certificate of motor insurance that should be returned to an insurer has been lost or destroyed. See Lost certificate declaration.

Storm and tempest

An additional peril that may be added to a fire insurance policy covering damage caused by exceptional weather conditions but specifically excluding damage by frost, subsidence or landslip.

Strict liability

A liability that arises without requiring proof of fault or negligence, such as injury or damage caused by defective products or the escape of things that are dangerous.

Subject-matter of insurance

The thing or liability that is described in the policy as being covered.

Subject-matter of the contract

The financial interest of the insured in the subject-matter of insurance.

Subrogation

The right of an insurer under a policy of indemnity, after having indemnified the insured, to stand in the insured's place and be entitled to any rights and remedies to which the insured would be entitled in order to minimise or eliminate the insurer's loss.

Subrogation condition

A condition that appears in all policies of indemnity, changing the position that applies at common law by giving the insurers the option to pursue their subrogation rights at any time, regardless of whether the claim has yet been paid.

Subrogation Waiver

The agreement by an insurer that subrogation rights will not be pursued in specified circumstances.

Subsidence and heave

An additional peril that may be insured under a fire policy, automatically included in household policies, covering the movement of land, other than normal settlement and coastal erosion. It is always subject to a substantial excess.

Subterranean fire

An additional peril that may be insured under a fire policy along with earthquake. It relates to fires of volcanic origin.

Sum assured

Same as sum insured.

Sum insured

The sum expressed in a policy as the maximum amount for which the insurer is liable under a policy providing indemnity or the amount payable by way of benefit in other insurances such as life and personal accident.

Suppliers' extension

An extension to a business interruption policy that provides cover for increase in cost of working and reduction in turnover as a consequence of physical damage by insured perils at the premises of suppliers of goods or services (either on a specified or non-specified basis).

Surveyor

A person qualified by knowledge and skill to report on the condition and value of property and the cause of damage to it. Surveyors have a growing role in loss prevention in the marine market and are much used for pre-shipment surveys of valuable cargoes. See also Fire surveyor.

Back to Top