first-loss policy: meaning, definition, pronunciation and examples
C2formal, technical
Quick answer
What does “first-loss policy” mean?
An insurance or reinsurance agreement where the insurer pays for losses only after they exceed a specified deductible amount.
Audio
Pronunciation
Definition
Meaning and Definition
An insurance or reinsurance agreement where the insurer pays for losses only after they exceed a specified deductible amount.
A risk management arrangement where coverage applies only to losses above a predetermined threshold, commonly used in property, marine, and financial insurance to share risk between insurer and insured.
Dialectal Variation
British vs American Usage
Differences
Terminology identical; concept used in both markets with same meaning.
Connotations
Technical insurance term without regional connotative differences.
Frequency
Equally specialized/rare in both varieties, appearing mainly in insurance documentation.
Grammar
How to Use “first-loss policy” in a Sentence
The [entity] secured a first-loss policy with [insurer]A first-loss policy covers [amount] above [deductible]Vocabulary
Collocations
Examples
Examples of “first-loss policy” in a Sentence
adjective
British English
- The first-loss provision was clearly outlined in the schedule.
American English
- They discussed the first-loss clause during negotiations.
Usage
Meaning in Context
Business
Used in insurance contracts to specify deductible arrangements.
Academic
Appears in risk management and insurance studies literature.
Everyday
Virtually never used in casual conversation.
Technical
Standard term in insurance underwriting and reinsurance treaties.
Vocabulary
Synonyms of “first-loss policy”
Strong
Neutral
Weak
Vocabulary
Antonyms of “first-loss policy”
Watch out
Common Mistakes When Using “first-loss policy”
- Using 'first-loss' for non-insurance contexts
- Confusing with 'first-party insurance'
- Assuming it means 'primary coverage' rather than 'excess coverage'
FAQ
Frequently Asked Questions
Yes, conceptually similar, but 'first-loss policy' is the formal insurance term for policies structured with an initial uncovered loss amount.
Businesses with predictable, frequent small losses that want to insure only catastrophic events, or in reinsurance where primary insurers transfer excess risk.
Rarely; these are predominantly commercial insurance products for organizations with significant asset portfolios or specialized risk profiles.
Lower premiums since the insured bears initial losses, making it economical for risks with high frequency but low severity.
An insurance or reinsurance agreement where the insurer pays for losses only after they exceed a specified deductible amount.
First-loss policy is usually formal, technical in register.
First-loss policy: in British English it is pronounced /fɜːst lɒs ˈpɒləsi/, and in American English it is pronounced /fɜrst lɔːs ˈpɑːləsi/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “None”
Learning
Memory Aids
Mnemonic
FIRST losses are YOUR losses; only AFTER that does the policy kick in.
Conceptual Metaphor
PROTECTION AS A LAYERED SHIELD (only outer layers activate after initial penetration)
Practice
Quiz
What is the primary characteristic of a first-loss policy?