Broker Resources
Insurance terms, explained.
A working glossary of the underwriting, cover and claims terms brokers use every day, written in plain language for the South African specialist insurance market.
Why terms matter
Clear language protects the client.
Specialist insurance is a technical trade. Two policies can look identical on page one and respond completely differently to the same loss, because of a single warranty, excess or aggregate limit buried further down. When a broker and an underwriter use the same words to mean the same thing, that gap closes.
The vocabulary of underwriting is part of the working relationship rather than something left to a call centre. Brokers who can explain a sum insured, an average clause or a warranty in a short conversation place better business, and their clients understand exactly what they are buying before a claim ever arises.
The definitions below are the terms that come up most often in broker conversations with us. They are grouped by where they sit in the insurance cycle: how a risk is assessed, what the cover says, what happens at claim stage, and how the broker channel itself operates. Use them as a starting point, then test the specific wording of the policy schedule, because the contract always governs.
- UnderwritingUnderwriting
- The process of assessing a risk, deciding whether it can be insured and on what terms. A specialist underwriter looks at the details of the risk itself rather than applying a generic checklist.
- PremiumCover
- The amount a client pays for their insurance cover over a period, usually a year. Premium reflects the likelihood and severity of the insured risk, the excess chosen and the limits of cover.
- ExcessCover
- The first portion of a claim the client agrees to carry. A higher excess usually lowers the premium and keeps the client involved in smaller losses.
- Sum insuredCover
- The maximum amount an insurer will pay for an insured item or section of cover. Sums insured need regular review so that a total loss can actually be replaced at today's cost.
- Policy scheduleCover
- The document that records what is insured, for how much, on what terms and for which period. It is the practical summary brokers and clients should read before anything else.
- EndorsementUnderwriting
- A written change to a policy that adds, removes or adjusts cover. Endorsements let a policy respond to a specific risk without drafting a new contract.
- WarrantyUnderwriting
- A condition the client promises to meet, such as maintaining an alarm or following a safety procedure. Breaching a warranty can affect the insurer's liability for a claim.
- Broker mandateBroker Channel
- The authority a broker holds to act for a client in placing, amending and renewing cover. Apex Group deals with brokers only and works through that mandate.
- Claims handlingClaims
- The process of notifying, assessing and settling a loss. Specialists who know the risk class tend to move faster from first notification to a fair settlement.
- Average (under-insurance)Claims
- A claims adjustment applied when a sum insured is lower than the true replacement value, so the settlement is reduced in proportion to the shortfall.
- Aggregate limitCover
- The total an insurer will pay across all claims in a policy period for a given section of cover, as opposed to a limit that applies to each claim.
- Sectional title riskCover
- Cover for a body corporate or homeowners association, where communal property, liability and member responsibilities all sit under one scheme policy.
Need a term unpacked?
Speak to the Apex Group broker team about the wording on a specific policy or risk.
Broker Enquiry