Reinsurance negotiated and placed on a case-by-case basis, as opposed to the automatic protection provided under a reinsurance treaty. Each facultative reinsurance arrangement is subject to a process of offer and acceptance between the parties.

An insurance policy which covers the misappropriation of goods or money by employees.

Means the inundation or covering of normally dry land by water which: escapes or overflows from, or cannot enter, because it is full or has overflowed, or is prevented from entering, because other water has already escaped or been released from it, the normal confines of any watercourse or lake, including any that may have been modified by human intervention, or reservoir, canal, dam or storm water channel. Flood does not mean storm water run off from areas surrounding the site or water escaping from any water main, pipe, street gutter, guttering or surface.

An unforseen loss is termed a fortuitous loss. Insurers will only insure fortuitous losses. Whilst an insurer knows that there will be motor accidents, it cannot predict which insureds will suffer a loss.

A type of excess whereby claims under a certain amount are not paid. However, claims over the franchise amount are paid in full.

The term "fraud or dishonesty" encompasses all those risks of loss that might arise through dishonest acts or omissions.

The issuance of a policy by one insurer on behalf of a second insurer because the second insurer is not licensed or admitted in the state of jurisdiction for the line of business being written. The first insurer actually issues the policy to the insured and retains legal responsibility for meeting claim payments under it, but is reinsures 100% of its exposure to the second insurer.