Glossary Index

Glossary on General Insurance Terms starting with G


GAINFUL EMPLOYMENT : Related to permanent total disability under personal accident insurance policy; disablement must be permanent and irrecoverable; total whereby the insured individual is unable to engage in any form of employment allowing him/her some financial benefits

GARBLING CLAUSE : Relates to transit or marine insurance of commodities, such as tobacco, grain, or coffee beans; offers insurer incurring the garbling cost (sifting and cleaning to separate good from the whole) to prevent further damage thereby reducing claims

GENERAL AVERAGE : Losses that arise due to extraordinary sacrifices made or incurred expenses towards preservation of vessel and cargo to be proportionally borne by interested parties; General average principle forms component of maritime law and is applicable irrespective of whether the marine adventure is insured or not

GENERAL AVERAGE CONTRIBUTION : Monetary contribution needed from shipowners and cargo owners for general average expenses and sacrificies; underwriter is liable for general average contribution paid or payable by the insured when general average act is undertaken for prevention of loss from any kind of insured risk; this liability is limited to proportionate amount of the payable contribution if the value of interest exceeds insured value

GENERAL AVERAGE COUNTER GUARANTEE : If the shipowner declares general average, it implies insistence on production of unlimited guarantee provided by the underwriters; underwriters issue unlimited guarantee against counter guarantee whereby the owner commits to reimburse underwriter overpayment resulting due to under-insurance; on completion of adjustment insurers first pay contribution payable through insured interest

GENERAL AVERAGE DEPOSIT : If there is no acceptable form of guarantee the cargo receiver is needed to deposit into general average fund prior to taking delivery; the amount is payable as general average deposit and slightly exceeds estimated contribution; deposit receipt is issued against the deposited money and earns interest; at the end of adjustment deposit holder is paid the difference between the amount and accrued interest and contribution

GENERAL AVERAGE ESSENTIALS : Entire adventure must be at risk; it must be imminent; voluntary act that is prudent and reasonable; performed to save interests of all parties involved; expense or sacrifice should be extraordinary in nature

GENERAL AVERAGE EXPENDITURE : Extraordinary expense incurred by vessel owner reasonably and intentionally to preserve property from peril involved in normal maritime adventure; such expenditure can be recovered from general average fund but not directly from underwriters; underwriters' liability is limited to the part of expense that relates to general average contribution that is payable through insured interest

GENERAL AVERAGE FUND : Fund created by vessel owner and average adjuster appointed on the declaration of general average; through deposits collected related to general average adjustment; shipowner has authority without needing to await final adjustment to withdraw from this fund for general average expense

GENERAL AVERAGE GUARANTEE : Cargo underwriters are willing to commit for payment of assessed contribution against insured cargo written guarantee is provided for paying contribution attaching insured interest; such guarantee is acceptable to vessel owner only if it is guaranteeing payment of full contribution assessed related to insured cargo; underwriters issue this unlimited guarantee on obtaining from insured counter guarantee for reimbursing underwriters for overpayment because of under insurance

GENERAL AVERAGE LOSS : Loss occuring due to or directly related to general average act; includes general average expense as well as sacrifice

GENERAL AVERAGE REFUND : Relates to the difference between general average deposit and actual general average contribution related to any interest saved through general average measures; refund is payable when party holding the deposit is willing

GENERAL AVERAGE SACRIFICE : Sacrificing one or multiple involved interests in the adventure to save majority of other interests

GENERAL DAMAGES : Damages awarded to injured individual for intangible losses that do not readily lend to qualitative measures; commonly known as pain or suffering; general damages are differentiated from special damages that are actually awarded for economic losses; like medical, legal, repairs, loss of income etc

GENERAL INSURANCE BUSINESS : Fire, marine, or other miscellaneous insurance business either carried singly or in contribution with one or multiple of these

GENERAL LIABILITY INSURANCE : Coverage related to claims arising from insured's liability for damages or injuries caused due to property ownership, manufacturing or contracting operations, distribution or sale of products, and machinery operations, and also professional services

GENERAL OPERATING EXPENSE : Admin expenses incurred by insurance companies that exclude commissions paid to the agents and taxes

GEOGRAPHICAL LIMITATION : Territorial jurisdiction available under the insurance cover; personal lines of liability insurance confine accidental coverage within the country unless otherwise specified in the insurance contract; motor vehicle insurance can be extended on request to include locations like Bhutan, Lahore, and Nepal without any additional premium and Bangladesh by paying flat additional premium given in the All India Motor Tariff

GHOST ANIMALS : Non-existent animals; it is possible to avail insurance for non-existent animals and filing claims by making false records and claim documents

GINNING : Process related to cotton; staples are combed to eliminate the cotton seeds; the process is done within the ginning department of the factory, which includes fire hazard possibilities

GOLFERS EQUIPMENT INSURANCE : Special coverage for non-professional golfers providing cover to golf equipment from accidental damages either in the golf course or while in transit, personal effects of insured against fire and theft in or at any golf facility, and liability of the insured from third party for bodily injury, and property damage while practicing or playing

GOODS : Merchandise excluding personal effects and/or provisions and stores that are used on board

GOODS CARRIAGE : Motor vehicle constructed or adapted for the sole use of carrying goods; any other vehicle not so constructed or adapted when used for transitting goods

GOODS IN TRUST OR ON COMMISSION : Person holding property of another in trust or commission possesses deemed insurable interest in the property and can avail insurance in his/her name

GOODS SENT ON APPROVAL : Property of goods passes from seller to buyer; when buyer signifies approval to seller or does any act adopting the sale; or if buyer does not approve but retains the goods by providing rejection notice within the stipulated time period, or reasonable time if such stipulation is missing, seller has insurable interest in goods until either of these two alternatives occur

GOODWILL : Reputation of the business that is expressed in certain monetary valuation; not insured by property insurance companies because of lack of measurable yardstick

GRADED RETENTION : Any single risk retention in pro-rata treaty that is top or graded; implies direct insurer has maximum retention limit that can reduce in certain cases based on qualitative analysis of these risks; retention reduction implies correponding decrease in surplus treaty capability due to line limitation

GRAMIN PERSONAL ACCIDENT INSURANCE (G.P.A. POLICY) : Special personal insurance cover available for the benefit of people residing in rural areas; with sum assured per person being Rs. 10,000 at Rs. 5 premium; policy covers risk against death, loss of eyesight or limbs, and permanent total disability due to accident

GRIEVOUS INJURY : Injury endangering life of an individual or causing the sufferer severe bodily ache or inability to complete regular daily tasks for several days; term is specifically used for Hit and Run vehicular accidents where specified compensation is payable to the grievous injuries

GROSS DOMESTIC PRODUCT : Measurement of value of all the goods and services produced and delivered during a one year period

GROSS LOSS : Loss incurred by the direct insurer for 100% of any one risk that has been insured by her/him

GROSS NATIONAL PRODUCT (GNP) : Total final value of services and goods produced in the country's economy over a period of one year; GNP growth rate is the most important indicator of the economic status of the nation

GROSS NEGLIGENCE : Reckless action without paying any heed to the possible consequences

GROSS NET PREMIUM INCOME : Companies that protect the net account through XL coverage, the premium in the account is pro-rata to the retained line on risks; such net account is gross net premium income of the compan; gross implies premium prior to any deductions

GROSS PREMIUM : Premium paid by the policyholders

GROSS PROFIT : Sum insured related to consequent loss policy based on the gross profit; represents the amount of net profit and the insured standing charges or in case of no net profit, the amount of insured standing charges reduced in the proportion of trading loss as the amount of insured standing charges bears in relation to all standing charges of the business

GROSS RATE : Sum of pure premium and the loading factor

GROSS VEHICLE WEIGHT : Total weight of the vehicle and load registered and certified by the Registering Authority as permissible for the concerned vehicle

GROUND : Includes all periods during which the aircraft is not flying, moored, or taxying

GROUP DISCOUNT : Discount on the premium as per the prospectus or manual rates depending on the number of people covered under the group personal accident or mediclaim plan; group discounts are also allowed for Industrial All Risks Policy; householder comprehensive policy, shopkeeper package policy, where the discounts are related to number of availed covered sections

GROUP INSURANCE : Insurance cover for group of individuals who are engaged in common activity; employees of a company, members of a professional association, registered farmers as a society for rural activities; insurance companies issue group policies for accident, professional indemnity, and medical insurance

GROUP MEDICLAIM INSURANCE : Medical cover issued in favor of an enterprise or organization or employer for covering the employees and sometimes even dependents; policies are also issued to clubs or associations for members' benefits; essential requirement for group policy include common relationship among insured persons, and central administration point for the policy scheme

GROUP PERSONAL ACCIDENT INSURANCE : Personal accident cover issued in favor of an enterprise or organization or employer for covering the employees and sometimes even dependents; policies are also issued to clubs or associations for members' benefits; essential requirement for group policy include common relationship among insured persons, and central administration point for the policy scheme

GROWTH RATE : Percentage change in the quantum of business compared to the base year; growth rate in business of each year over prevoius year is assessed through insurance companies for assessing business performance vis-à-vis targets, analyzing reasons for deviations, and adopt corrective measures as required; growth rates of individual field personnel is assessed every year to ascertain individual employee's eligibility for annual increment and growth incentives according to the scheme

GROUP LIFE INSURANCE : Life insurance cover without medical examination on group of individuals under a master policy; typically issued to employers for employees' benefits or association members; individual members hold certificates as evidence of the coverage

GENERAL INSURANCE BUSINESS NATIONALIZATION ACT, 1972 : Incorporated in September 1972 established for providing acquisition and transfer of shares of Indian Insurance Companies for serving economy in a better way by securing development of general insurance business through appropriate regulations and controls

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) : Accounting principles and business reporting rules developed by the American Institute of Public Accountants

GENERATION SKIPPING TAX : Transfer tax imposed on gift or inheritance to those at least 2 generations younger than the individual making such transfer

GLASS INSURANCE : Protection for damage or loss to glass and related appurtenances

GOOD STUDENT DISCOUNT : Decrease in automobile insurance premium for young drivers who are at least 16 years and rank among the upper 20% of her/his class, has B or 3 average, or is on the Dean's list or honor roll; based on the premise that good students make better drivers

GRACE PERIOD : Specified period after the premium due date during which the insured can pay the premium amount; all benefits and covers under the policy continue during this period

GRADED COMMISSION SCALE : Commission scale offering payment of higher first-year commission and lower commissions on renewals

GROSS ESTATE : Total of the assets and liabilities of an individual at the time of his or her demise

GROUP ANNUITY : Pension plan offering annuities on retirement to group of people under a master contract; usually issued by employer for employees' benefits; individual employee possesses certificate of evidence

GROUP ANNUITY CONTRACT : Contract issued by life insurance company used as funding instrument for the benefits made in accordance to the pension plans; single master contract offers the group of participating members annuities during their retirement; individual certificates are issued for evidence

GROUP CONTRACT : Insurance contract with the employer or another entity covering group of persons identified as individuals by referencing their relationship to the entity

GROUP CREDITOR LIFE INSURANCE : Life insurance provided to debtors by the lending institution/s for offering cancellation of outstanding debt obligation in the event of borrower's death; generally term insurance is limited to the loan amount

GROUP MAJOR MEDICAL PLAN : Single policy covering group of individuals often company employees or association members and their dependants; cover is available under master policy issued to the association or employers

GROUP ORDINARY LIFE INSURANCE : Group insurance plan offering life insurance for the employees; traditional whole life policy is split into reducing insurance protection and enhancing cash values

GROUP PAID-UP LIFE INSURANCE : Accumulating units of single premium whole life insurance and reducing term insurance that together are equivalent to the face value of the policy; provided through the group life insurance policy

GROUP PERMANENT PLAN : Pension plan whereby the cash value life insurance is issued on group basis and cash values of individual policy are used for paying retirement benefits at the time of the retirement of the worker

GROUP SURVIVOR INCOME BENEFIT INSURANCE (SIBI) : Survivor income benefit insurance

GROUP TERM LIFE INSURANCE : Commonest form of group life insurance; annual renewable term insurance for employees during their working lives

GROUP UNIVERSAL LIFE PRODUCTS (GULP) : Universal life insurance policies that are sold to group members like individual employees; some differences between GULP plans and individual universal life plans exist; one being GULP expense charges are generally lesser than the expenses assessed against individual policies


GUARANTEED INVESTMENT CONTRACT : Investment contract with an insurance company whereby the insurer guarantees principal as well as interest on the pension contribution

GUARANTEED PURCHASE OPTION : Benefit that can be included to life insurance plans that permit injured to acquire additional amounts of life cover at specific times during the future without needing further evidence for insurance eligibility

GUARANTEED RENEWABLE : Contract whereby insured has right to continue the cover through regular premium payments until the age of at least 50 years, or where the policy is issued after the age of 44 for a period of at least 5 years from the date of issue during this period the insurance company does not have any rights to make any modifications unilaterally within the insurance contract while the policy continues to be in force except the insurer can amend the rate of premium on the basis of classes

GUARANTEED RENEWABLE CONTRACT : Health insurance policy wherein the company guarantees renewal for the life of the assured or until s/he reaches a certain specified age, which is generally 65 years

GUARANTY FUND : Fund derived through assessments against solvent insurers for absorbing losses of the claimants against insolvent insurance service providers

GARAGEKEEPERS LEGAL LIABILITY POLICY : Cover for losses that are legally insured resulting from fire or explosion, vandalism or riot, upset to vehicles in his/her care, control, or custody, theft of the entire vehicle, and collision

GARAGE LIABILITY POLICY : Liability contract designed for providing the owner of a garage with the liability protection required for special hazards existing in the premises

GENERAL AGGREGATE LIMIT : Commercial general liability limiting all applicable damages payable for any bodily injuries, personal injury, medical expenses, and advertising injuries except the damages included in product completed operations hazard

GENERAL AVERAGE IN FULL : Also written as G-A in FULL is an agreement within a cargo insurance policy wherein the underwriters do not lower claims for general average contribution in case of under insurance

GENERAL EXCLUSION CLAUSE : Clause in the Institute Cargo Clauses 1982 that specifies the excluded risks irrespective of those risks that are covered elsewhere in the wordings

GLASS COVERAGE FORM : Commercial property form used for insuring plate glass, ornmentation, lettering, and frames. Replacement for earlier commerical glass insurance forms

GOOD FAITH : Basic insurance principle, assured and her/his broker must disclose and truly represent all material facts to the underwriters before accepting the risk; breach of good faith entitles the insurers to avoid the contract