Technical Briefing Note - Purchases
This paper was launched at the BI SIG presentations given at the 2008 CILA Conference in Birmingham. Since launch the detail has been updated and this represents the latest version.
‘Purchases’ is a term that carries a technical meaning for many Insurance Practitioners but is not a technical term with a specific definition in general everyday usage. The term ‘Purchases’ (and other related costs) now frequently replaces the generic ‘Uninsured Working Expenses’ seen in many wordings. Misunderstandings can arise where a Policyholder interprets the term Purchases in a different way to the technical meaning inferred by Insurers and/or Brokers and significant Policy considerations can arise. Significant under-insurance can have a particularly significant impact for a non-declaration linked Policy where an Insured has deducted more cost captions as purchases than is apparent to the Insurers.