What is it with legal documents and Latin? We’re living in the 21st Century and we’re faced with documents that contain phrases that Nero may have been familiar with, but you don’t hear too often on the average building site. Even when they’re in English, some of these legalise might as well be in a foreign language. Let’s look at some of these phrases that crop up in connection with public liability insurance and employers liability insurance and try and make sense of them.
Ab Initio – Nothing to do with your abs, fitness fans, this Latin term simply means ‘from the beginning’. A liability insurance policy may be cancelled ‘ab initio’ if the insurer felt that there had been a non-disclosure serious enough to not wish to proceed with the policy at all. In this case, normally the insurer will refund the premium paid.
Bona Fide – Literally this translates as ‘good faith’ and has come to mean genuine or authentic. This term often appears as part of the description ‘bona fide sub contractor’ which simply means a subcontractor who operates using their own tools, takes care of their own insurance and are paid using an invoice. They generally work without direction from the insured and as such have their own legal liabilities and sort out their own insurance. Bona Fide Sub Contractors differ from Labour Only Sub Contractors in that the latter should be treated as employees as regards cover under Employers Liability Insurance UK. Generally, Labour Only Sub Contractors work under the direction of the insured and do not provide their own materials and tools, and cover would therefore be arranged by the LOSC by the main contractor under their policy.
Speaking your language
Subrogation – Not a Latin term but not something that crops up in conversation much, either. This word refers to the right of an insurer who has indemnified (compensated) a policyholder to take over any legal rights the policyholder may have had in respect of that particular liability insurance claim.
Act of God – It’s a phrase we’re familiar with but what exactly does it mean? Simply put, it’s an accident that no human foresight can provide against. Natural phenomena like storms, earthquakes or hurricanes fall under this definition, and they are an acceptable defence against an employer’s liability insurance claim so it’s a good reason not to drive a vehicle in adverse weather conditions.
By understanding some of the more commonly used terminologies in the standard Employers Liability Insurance policy, you can be certain that you’re not going to get caught out by the small print.
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