Insurance policies are asked for in tender files, in loan applications and in freight transactions. The text is formulaic, but the lists of cover and exclusions inside the formula vary from business to business, and that is where the real information lies.
Identifying details of the policy
The policy number, the insurance company, the agent, the insured and the policyholder are separate fields. It is often forgotten that the insured and the policyholder may be different persons; in translation these two fields are not merged.
Scope of cover
The risks against which cover is given are listed clause by clause. Each clause may have its own limit. Whether the limits apply per clause or in aggregate is stated in the policy, and this distinction is preserved in translation.
Exclusions
The situations that fall outside the cover are given in a long list. This list is the most decisive section of the policy. The order and numbering of the clauses are preserved; two exclusions merged into one open up an argument, at the time of a loss, over which of them applies.
Deductible and coinsurance
The deductible (excess) is the part of the loss that stays with the insured; coinsurance is leaving a percentage of the risk with the insured. The two concepts look alike but are calculated differently, and confusing them changes the amount of the indemnity.
Sum insured and insurable value
The sum insured and the insurable value may not be the same. In the event of underinsurance the indemnity is paid proportionally, and this rule is written in the policy. If the rule is left out of the translation, the insured expects full indemnity.
Term and moment of commencement
The start and end dates of the policy are given together with the time of day. Leaving out the time gives rise to an argument over whether the loss falls within the cover. The date and time are carried over in full in the translation.
Obligation to notify a loss
The period within which a loss is to be notified, and by what means, is laid down. Exceeding the period may affect the right to indemnity. This clause is made prominent in the translation and the period wording is kept in days.
General and special conditions
The general conditions attached to the policy are a standard text; the special conditions are agreed by the parties. The two are presented together, and in translation a heading separates which text is which. Translating the special conditions alone leaves the framework of the cover incomplete.
The loss payee clause (dain-i mürtehin)
In purchases on credit, an entry in favour of the lending institution is added to the policy, and the indemnity is paid to it first. The beneficiary of this entry is written with its full trade name. Leaving the entry out leads to an argument over the indemnity having been paid to the wrong party.
Voyage details in cargo policies
Where the cargo is carried from and to, the means of transport and the voyage number appear in the policy. The names of ports and cities are given in their official spelling. That the details in the transport document are the same as those in the policy is the first point checked at the time of a loss.
The policyholder's duty of disclosure
Matters affecting the risk have to be disclosed when the contract is concluded. The consequence of incomplete or incorrect disclosure is written in the policy and may go as far as a reduction of the indemnity. This clause is not softened in translation.
Renewal and endorsements
Changes made during the term of the policy are recorded by endorsement. Endorsements are part of the policy and bear separate numbers. When the translation of a policy is requested, the question of whether the endorsements are also in the file is asked at the outset.