Glossary

a
accident
Without prejudice to the limitation of the risk that the parties establish in the contract, accident is understood as the bodily injury derived from a sudden, violent, external cause, unintended by the insured, which causes temporary or permanent disablement or death.
b
beneficiary
THE BENEFICIARY. The natural or legal person or persons designated to receive from the insurer the payment derived from the insurance policy taken out. Regulated by the Law of Contracts only for life insurance.
c
civil liability insurance
Civil liability insurance obliges the insurer, within the limits established by Law and in the contract, to cover the risk of the arising of the obligation of the insured to compensate a third party for damages caused by an unforeseen event, provided for in the contract, and of whose consequences the insured is civilly liable, according to law.
claim incident
A claim incident is the occurrence of an incident contemplated in the policy and which gives rise to the fulfilment of the obligations assumed by the insurer under the contract. The occurrence of the claim incident is what gives rise to the indemnity, the repair of the loss or damage suffered or the payment of the agreed sum insured.
clauses
Special conditions or clauses make up that document which includes any modifications, extensions, or cancellations of the general conditions of the policy, as a result of any specific agreements reached between the parties.
compensation principle
The insurance against damages is taken out in order to compensate for possible losses the insured may suffer as a result of the occurrence of a given risk. The purpose of the insurance is, in this sense, strictly that of compensation or repair of damages or losses (compensation principle), excluding the possibility of it becoming a source of profit for the insured.
copy of policy
In the event of loss or misplacement of the policy, the insurer, at the request of the policyholder or the insured or beneficiary, is obliged to issue a copy or duplicate of the policy, which will be identical in effect to the original. The request must be made in writing.
credit insurance
With credit insurance, the insurer undertakes, within the limits established by Law and in the contract, to indemnify the insured for losses ultimately suffered as a consequence of the permanent Insolvency of their debtors.
d
deductible
The deductible is an amount, established in the policy, which is deducted from the compensation to be paid by the insurer in the event of a claim incident, it being, therefore, a way of the insured participating in the cost of the claim incident.
duplicate copy of policy
In the event of loss or misplacement of the policy, the insurer, at the request of the policy-holder or the insured or beneficiary, is obliged to issue a copy or duplicate of the policy, which will be identical in effect to the original. The request must be made in writing.
e
excess or deductible
The excess or deductible is an amount, established in the policy, which is deducted from the indemnity payable by the insurer in the event of a claim, it being, therefore, a way by which the insured shares in the cost of the claim.
endorsements
The documents subscribed to by the policyholder and the insurer when updating an insurance contract already in force. The endorsements and appendices then become part of the body of the policy.
f
fire insurance
Under fire insurance, the insurer undertakes, within the limits established by Law and in the contract, to indemnify the Insured for loss of or damage to the insured property caused by fire. Fire is defined as the combustion and burning by flames which are capable of spreading, of an object or objects that were not intended to be burnt in the place and at the time it occurs.
first loss
It is the form of insurance that provides coverage up to a certain amount, regardless of the total value.
full value insurance
The sum insured must correspond to the real total value of the different insured interests.
g
general terms and conditions
The general terms and conditions make up the set of clauses which, drafted by the insurance company, regulate the future contractual relationships, and have as their aim the achievement of uniformity between contracts issued en masse. The content and form of the general conditions must comply with the requirements established by the Insurance Contracts Act, aimed specifically at protecting consumers.
i
inland transit insurance
Under an Inland transit insurance the insurer undertakes, within the limits established by Law and in the contract, to indemnify the Insured for loss or damage suffered during or as a consequence of the transport of goods, of the means of transport used or of other insured goods.
insurance against theft
Insurance against theft obliges the insurer, within the limits established by Law and in the contract, to compensate for the damages derived from the illegitimate removal by third parties of the insured objects. The cover includes the damages caused by the act of crime in any of its forms.
insurance agent
Agents are those natural or legal persons who, by means of entering into an agency contract with an insurance company, undertake to carry out mediating activities between the policyholders and the insured, on the one hand, and the insurance bodies authorised to exercise private insurance activities, on the other.
insurance broker
Insurance brokers are natural or legal persons who carry out private insurance activities without holding any exclusive relationship with the insurance companies and who are independent of the latter, offering impartial professional advice to those requesting cover for the risks to which their persons, estates, interests or liabilities are exposed.
insurance contract
Insurance brokers are natural or legal persons who carry out private insurance activities without holding any exclusive relationship with the insurance companies and who are independent of the latter, offering impartial professional advice to those requesting cover for the risks to which their persons, estates, interests or liabilities are exposed.
insurance policy
The insurance Policy is the set of documents that contain the terms, conditions and agreements that make up the insurance contract. It is therefore, the documentary evidence of the existence of an insurance contract between the parties, and of the terms, conditions and agreements upon which the contractual relationship is based.
insurance policy-holder
The insurance policyholder is the natural or legal person who takes out the insurance contract with the insurer. That is, the person who signs the policy and thereby assumes the obligations and rights derived from the contract.
Insurance proposal
The proposal form is the document by which an insurance contract is requested. This document expresses the intention on the part of the future policyholder to take out an insurance policy, and it is addressed to the insurer; it must contain a description of the risk to be insured, with the details required by the insurer to provide him with adequate knowledge of the risk and to enable him establish, on the basis thereof, the price, the terms and conditions under which the coverage requested can be offered. For this reason, any inaccuracy, non-disclosure or misrepresentation in the details requested will affect the validity of the insurance contract.
Insurance quotation
Once he has knowledge of the nature of the risks through the insurance proposal form, the Insurer can make an assessment of the risk and, if it is found to be acceptable, he will put forward an insurance quotation, to be accepted or rejected by the prospective policyholder. The insurance quotation is a document issued by the insurer at the request of the insured, whereby the insurer offers a quotation of the terms and conditions under which it agrees to cover the risk proposed.
insurance request
The request form is the document by which an insurance contract is requested. Said document reflects the will to take out an insurance policy, which the future policy-holder addresses to the insurance body and which must contain a description of the risk to be covered, with the details required by the insurer to ensure adequate knowledge and establish, depending on the nature, the price, terms and conditions under which the requested cover can be offered. For this reason, inaccuracy, concealment or falsity of the requested details will affect the validity of the subscribed contract.
insured
THE INSURED. The natural or legal person who is exposed to the risk, either in respect of their person or their property or their estate.
insured amount
SUM INSURED OR INSURED VALUE: As established in Article 27 of the Spanish Insurance Contracts Act -L.C.S.-, the sum insured represents the maximum limit of the indemnity to be paid by the insurer in respect of each claim.
insured interest
Insured interest is understood as the relationship existing between the insured and the element exposed to risk, by virtue of which the occurrence of a claim may cause the insured to suffer financial loss, either directly, if the consequences of the claim affect the insured’s own estate (if the insured is the owner), or indirectly, if in any way the insured has an interest or liability with regard to the property damaged or destroyed (for example, if the insured is a bailee, liable for the preservation thereof).
insured object
The insured object is the element that is exposed to the risk covered by the insurance.
insured value
As is established in Article 27 of the Spanish Insurance Contracts Act -L.C.S.-, the sum insured represents the maximum limit of the indemnity to be paid by the insurer in respect of each claim.
insurer
THE INSURER. The legal person who, legally constituted and operating in accordance with applicable legislation, carries out the assumption of the risks of others as a professional activity, in consideration of the receipt of a certain price, called the premium.
l
land transport insurance
The general terms and conditions make up the set of clauses which, drafted by the insurance company, regulate the future contractual relationships, and have as their aim the achievement of uniformity between contracts issued en masse. The content and form of the general conditions must comply with the requirements established by the Insurance Contracts Act, aimed specifically at protecting consumers.
legal defence insurance
Under legal defence insurance, the insurer undertakes, within the limits established by Law and in the contract, to bear any costs that the insured may incur as a result of his participation in administrative, judicial or arbitration proceedings, and to provide judicial and extra-judicial assistance derived from the insurance cover.
legal liability insurance
Under a legal liability insurance the insurer undertakes, within the limits established by Law and in the contract, to cover the risk that the Insured may become liable to compensate a third party for damages caused by an unforeseen event, provided for in the contract, for the consequences of which the insured is liable, according to law.
letter of guarantee
A Letter of Guarantee is a document issued by the insurance company as provisional documentation of the existence of a given insurance cover. It is normally issued at the request of the policyholder or the insured, when there is an urgent need to justify the existence of an insurance policy for a given risk, before potential creditors, etc., and the insurance body has not yet had time to issue the corresponding policy.
life assurance
Under life assurance the insurer undertakes, in consideration of the receipt of the premium stipulated and within the limits established by Law and in the contract, to pay to the beneficiary a capital amount, an income or other agreed benefits, in the event of either the death or the survival of the insured, or of both events together.
life insurance
Life insurance obliges the insurer, by means of the reception of the stipulated premium and within the limits established by Law and in the contract, to pay the beneficiary a capital amount, income or other agreed payments, in case of death or survival of the insured, or both events together.
o
over-insurance
Over-insurance is understood as the situation whereby the sum insured is significantly higher than the value of the insured interest.
p
partial value insurance
The procedure is identical to that of full value insurance, with one difference: a percentage of the full value is established, which constitutes the sum insured and, therefore, the maximum limit of the indemnity. The premium is calculated on the basis of the full value with a discount in recognition of the fact that the insured sum is only a part of the total.
periodic premium
The periodic premium is the premium paid periodically, within the terms agreed upon for the duration of the insurance contract.
s
single premium
A single premium is that by means of the payment of which, the policyholder frees himself entirely of the obligation of paying any further sums for this item, for the entire duration of the insurance. That is, it is an advance of all the premiums that would have to be paid for successive renewal periods for the term of the contract.
society of certified professionals in insurance mediation
Societies of Certified Professionals in Insurance Mediation are corporations subject to public law, with legal personality and full capacity to act towards the fulfilment of their purposes, constituted by those physical persons who wish to join voluntarily, as long as they are in possession of the "Certified Diploma in Insurance Mediation".
special conditions
Special conditions or clauses make up that document which includes any modifications, extensions, or cancellations of the general conditions of the policy, as a result of any specific agreements reached between the parties.
specific terms and conditions
Specific terms and conditions make up the document detailing the particular details of each contract, (known as the policy Schedule, in English).
supplements
The documents subscribed by the policy-holder and the insurer when updating an insurance contract in force. The supplements and appendices then become part of the body of the policy.
surety bond
Under a surety bond, the insurer undertakes, in the event of non-fulfilment by the policyholder of their legal or contractual obligations, to indemnify the Insured, as compensation or penalty, for damages suffered in their estate, subject to the limits established by law or in contract. All payments made by the insurer must be reimbursed by the policyholder.
t
the principle of indemnity
The insurance against loss or damage is taken out in order to compensate possible losses which the insured may suffer as a result of the occurrence of a given risk. The purpose of the insurance is, in this sense, strictly that of indemnity or repair of loss or damages suffered (the principle of indemnity), the insurance not being permitted to become a source of profit for the insured.
theft insurance
Under a Theft Insurance contract the insurer undertakes, within the limits established by Law and in the contract, to indemnify the Insured against loss of damage derived from the unlawful appropriation by third parties of the insured objects. The cover includes the damage caused by the perpetration of the crime in any of its forms.
u
under-insurance
Under-insurance. The application of the proportional rule of “average”: In those cases in which, when the claim occurs, the sum insured is lower than the value of the insured interest (under-insurance), the insurer will only indemnify the loss or damage caused in the same proportion as the sum insured covers the insured interest.