Glossary

Contract frustration insurance is a form of trade insurance that compensates insureds for losses they incur when actions of a foreign government or conditions in a foreign country prevent fulfillment of a contract. Among the types of events insured under a typical contract frustration policy are the following. Unilateral termination of a contract by a government entity Nonpayment by a government entity after a contract is fulfilled Cancellation of a legally valid import or export license Government default on an award following arbitration of a contract dispute Other governmental acts that frustrate the fulfillment of contracts Regarding coverage related to contracts, typically the amount covered must be specified in the insured contract, and the policyholder must have fulfilled its obligations under the contract.

Contract of adhesion is a legal concept wherein a contract is offered intact to one party by another with the stipulation that the second party accept or reject the contract in total without the opportunity to bargain over the wording.

Contract ratification indemnity is a type of political risk insurance that pays a proportion of the contractor's start-up costs that may not be recoverable from the purchaser/employer in the event that an overseas contract is not finalized for reasons outside the contractor's control.

Contract repudiation indemnity provides coverage for economic losses arising out of the unilateral cancellation of a contract as a result of direct or indirect actions of a foreign government or its agents under circumstances in which the insured is not in breach of contract.

The contra proferentem rule is a universally applied rule that ambiguities in an insurance policy will be strictly interpreted against the insurer.

Where there is more than one reinsurer sharing a line of insurance on a risk in excess of a specified retention, each such reinsurer shall contribute toward any excess loss in proportion to its original participation in such risk.

Contribution, as used in the insurance industry, is the principle holding that two or more insurers each liable for a covered loss should participate in the payment of that loss.

Contribution by equal shares is a method of apportioning loss among multiple insurers.

Contribution by limits is a method of apportioning loss among multiple insurers.

Contributory negligence is the negligence of a plaintiff constituting a partial cause or aggravation of their injury.