LANDING CHARGES – Charges payable on cargo at the port of destination.

LATENT DEFECTS – A hidden flaw or defect which is not readily discoverable by a competent person using reasonable skill in an ordinary inspection.

LAPSE – Termination of a policy because of failure to pay the premium.

LAY-UP RETURNS – Provision in a marine hull policy that provides for a return of premium when the ship is laid up in protected waters for not less than a specified number of days.

LEADING UNDERWRITER – An Insurer whose lead is followed by other Underwriters on a placing slip.LEGAL LIABILITY – A liability which can be enforced in a court of law.

LESSEE – The person to whom a lease is granted, commonly called the tenant.

LESSOR – The person granting a lease, also known as the landlord.

LETTER OF CREDIT – A document which authorizes payment of an agreed sum of money to the person named therein.

LIABILITY - A legal obligation, most often financial, to respond in damages in the event of an accident. It may be imposed by an act of law or assumed under a contract.

LIABILITY (COMBINED LIMIT) - Expression of the extent of coverage in a lump sum, whereby the entire amount expressed in the policy is available either per person or per accident regardless of whether the claim if for Bodily Injury or Property Damage or both.

LIABILITY INSURANCE – In an accident where you are charged with injuring another person or damaging his or her property, liability insurance pays the cost of your legal defence, as well as the cost of any damages for which you are found legally responsible.

LIABILITY LIMITS – The sum or sums beyond which a Insurance Company does not protect the Insured on a particular policy.

LIABILITY (SPLIT LIMIT) - Expression of the extent of coverage separately as to: per accident/per person (or occurrence) for Bodily Injury; Per Accident (or occurrence) for property damage.

LIBEL – A written statement about someone which is personally injurious to that individual.

LIEN – A legal right whereby a person may prevent another from taking possession of property until the other person has satisfied a liability due to the other person with the lien.

LIMIT ANY ONE VESSEL – In a marine cargo open cover, the limit of an Insurer’s liability on the value of cargo to be carried by any single vessel.

LINER – A vessel engaged on a regular run and keeping to a time schedule. The liner is considered to be a better risk than a “tramp” which is a vessel not engaged on a regular run.

LIVESTOCK INSURANCE – Insurance on horses, cattle and similar animals against death or injury. Often restricted to mortality risk only.

LIMIT OF LIABILITY – The maximum amount which an Insurance Company agrees to pay in case of loss.


LIMITS – Maximum amount a policy will pay either overall or under a particular coverage.

LLOYD’S – A Society of insurance Underwriters based in London, Lloyd’s of London takes its title from a coffeehouse run by a Mr. Edward Lloyd. The coffeehouse was frequented habitually by private insurance Underwriters during the 18th century. The foundation of the Society of Lloyd’s was established in an agreement dated December 13, 1771.

LLOYD’S AGENTS – Agents of the Corporation of Lloyd’s whose primary duty is to keep Lloyd’s informed of shipping movements, casualties and other matters of interest to Insurers and the commercial community. It has become customary for Underwriters and Insurance Companies to utilise the services of Lloyd’s Agents in connection with surveys of damaged vessels and cargo.

LLOYD’S CERTIFICATE OF CARGO INSURANCE – A document issued by Lloyd’s as evidence of a cargo insurance contract effected with Lloyd’s Underwriters. Certificates may be given in ‘blank’ form (already signed by the appropriate Lloyd’s department) to insurance brokers, merchants and others who are authorised to countersign and issue the certificates to Clients.

LLOYD’S REGISTER OF SHIPPING – The world oldest and largest independent non-commercial classification Society whose function is the classification of merchant ships, the establishment of standards for their construction and the provision of a worldwide technical service.

LLOYD’S UNDERWRITER – An underwriting member of Lloyd’s. A person applying for membership must meet be a person over 21 years of age of any nationality, male or female, and must satisfy the Committee of Lloyd’s standards, most importantly financial.

LOCATION CLAUSE - A clause in a marine cargo Open Cover limiting the insurers' liability on property in one location prior to shipment.

LONDON MARKET – Lloyd’s and the London Insurance Companies.

LOSS – Generally refers to (1) the amount of reduction in the value of an Insured's property caused by an Insured peril, (2) the amount sought through an Insured's claim, or (3) the amount paid on behalf of an Insured under an insurance contract.

LOSSES OCCURRING BASIS – With this type of liability policy the Insurer is responsible for all losses that occur during the policy period even though they may come to light some years after the policy period has expired. Typical examples are in Employer’s Liability insurance where certain diseases in employees (e.g. asbestosis of the lungs) manifest themselves many years after the insurance policy period has passed.

LOSS OF SPECIE – Occurs where the insured property is so damaged that it ceases to be a thing of the kind insured, that is, it changes its specie. An example would be bags of cement which have been immersed in water.

LOSS OF USE INSURANCE – Coverage to compensate an Insured for the loss of use of property if it cannot be used because of a peril covered by the policy.

LOSS RESERVE - A statement of condition, or balance sheet account set up by an Insurer based on its expectations about future insurance claims. As claims occur, they are charged against this reserve.