Appendix 3: Glossary
Insuring public assets.
| Common terms used in this paper | |
|---|---|
| Carrying value | The amount at which an asset is recognised in an entity's financial statements after deducting any accumulated depreciation and accumulated impairment losses. |
| Cover | The scope of protection provided by an insurance policy. |
| Excess | A portion of an insurance claim that the insured party must pay. It is usually the first part of the loss claimed, up to a value set out in the insurance policy. |
| Indemnity value | The current value of an asset that takes into account its age and condition at the time of loss or damage. |
| Insurance broker | An independent agent who advises people wanting insurance, and arranges insurance cover for them. |
| Policy exclusion | A provision within an insurance policy that eliminates cover for certain circumstances or specific losses. |
| Premium | The amount required to be paid to obtain a specified amount of insurance cover for a set period. |
| Reinstatement | A provision within an insurance policy that results in insurance cover continuing to be provided following an event that results in a claim. |
| Reinsurance | Insurance purchased by an insurer that transfers a portion of their risk to other parties (the reinsurers). The risk is assumed by the reinsurer in return for a part of the premium the insurer receives. |
| Replacement cost | The amount that would be required currently to create an asset with the same service capacity as an existing asset. |
| Self-insurance | A way of managing risk by having access to funds, either cash or borrowings, for use when an unexpected loss happens, rather than having insurance. |
| Sum insured value | The maximum amount an insurer will pay out under an insurance policy. If there is a loss limit and the insurance pay-out is capped, this is taken into account. |