If a manufacturing and/or workshop risk has been closed down for a period of at least thirty (30) days, such risk is then considered as "silent risk," and may be rated under the Warehouse Tariff.
Special Perils
Risks and hazards other than fire and lightning, such as typhoon, flood, earthquake fire, earthquake shock, explosion, riot, strike and others. Special perils are normally excluded from the coverage of the standard fire policy, but paying additional premiums may insure against most of them.
Speculative Risk
A risk that may result in either gain or loss (e.g., fluctuations of prices merchandise).
Subrogation
Subrogation is the right of one person to stand in the place of another and to avail of the latter's rights and remedies or the passing on of rights (against another party). Subrogation is considered as a corollary or an extension of the Principle of Indemnity. Through it, the insurer may be able to either extinguish or diminish the ultimate loss sustained. After the insurer has fully indemnified the insured, the insurer acquires the rights of the insured to recover or seek remedies from other parties that may be liable for the loss.
Surety Bond
Comprises all the other bonds that do not fall under fidelity bonds; may be further subdivided into judicial and non-judicial bonds.
Suretyship
Exists whenever one party, jointly and severally with another party, guarantees the latter's obligation or undertaking in favor of a third party.
Suretyship is a 'triangular contract'. It involves three parties and three distinct contracts at the same time. The surety bond is a contract of guaranty, so it is a secondary or collateral contract to the prime contract. The prime contract is what the bond guarantees; hence, it must exist before the need for a bond arises. Without the prime contract, there is no basis for the bond. When the principal applies for a bond, the surety requires him to execute a contract under which he binds himself to indemnify the surety for whatever loss the latter may incur arising from issuance of the bond. This is known as the indemnity agreement.
Underwriter
An official of an insurance company duly licensed by the Insurance Commission, who handles the underwriting of insurance risks, that is, the acceptance and distribution of insurance risks.
Utmost Good Faith (Uberrimae Fidei)
An obligation of the insured to disclose material facts, i.e., facts that would influence the insurer in deciding whether to accept the risk or in fixing the terms (including the price) of the contract. The duty of good faith implies that the proposer shall disclose to the insurers everything material about the proposed subject matter of insurance that he knows, or ought to know. The insurer, in turn, will disclose to the proposer the terms and conditions, upon which the risk is likely to be acceptable.
If an insurer, knowing that no risk is involved, takes advantage of the proposer by accepting a proposal or insurance, it is a breach of good faith and the insurance policy granted is void. The premium accepted is liable to be refunded.
Valued Policy
Expresses, on its face, an agreement that the thing insured shall be valued at a specified sum. The amount of insurance under a valued policy is considered as the exact value of the thing insured, and such insured amount must be fully paid in the event of a valid total loss. It is not subject to adjustment as far as the evaluation is concerned.
Warranties
Written stipulations to be incorporated into and made part of fire policies, requiring the insured to guarantee the truth of certain facts, the fulfillment of certain promises, or the performance of certain obligations. A breach of such warranty will render the policy null and void, and the company shall no longer be liable for any loss that may occur.
