Glossary of Insurance Terms

ACT OF GOD

Nugent v Smith (1876) "Natural causes directly and exclusively without human intervention and that could not have been prevented by any amount of foresight and pains and care reasonably to have been expected".

ADDENDUM

A document setting out agreed alterations to an insurance contract. (See Endorsement).

ADDITIONAL PREMIUM

A further premium payable by the insured as a result of a policy amendment or the disclosure of further information that has increased the risk, or due to the sums insured or limit of indemnity being increased.

ADJUSTER

One who investigates and assesses claims on behalf of insurers (claims adjuster or loss adjuster).

ADVANCE PROFITS INSURANCE

Business interruption insurance of the expected profits of a new enterprise or an extension to an existing business.

AGGREGATE LIMIT OF INDEMNITY

The maximum amount an insurer will pay under a policy in respect of all accumulated claims arising within a specified period of insurance.

AIRSIDE

Generally refers to an area on an airport that has restricted access and will include aprons, taxiways, runways and areas pass the security gates in terminal buildings. Most public liability policies will contain an exclusion relating to such. Any work airside should be separately disclosed as an material fact. Usually a higher limit of indemnity is required by the Aviation Authorities.

ALL RISKS

A term used to describe insurance against loss of, or damage to, property arising from any fortuitous cause except those that are specifically excluded.

ASSURANCE

A term interchangeable with insurance but generally used in connection with life cover as assurance implies the certainty of an event and insurance the probability.

AVERAGE

A clause in insurance policies whereby in the event of under-insurance, the claim paid out by the insurer is restricted to the same proportion of the loss as the sum insured under the policy bears to the total value of the insured item.

BONA FIDE SUB-CONTRACTOR

Contractors who work without direction or control from the insured, hold their own insurance and usually provide their own materials and tools.

BUILDINGS INSURANCE

Covers the cost of damage to the structure of your property. This includes the roof, walls, ceilings, floors, doors and windows. Outdoor structures such as garages and fences are also included. It will also cover permanent fixtures and fittings, interior decoration and underground tanks, pipes, cables and drains for which you are responsible. It should cover the full cost of rebuilding the property. You should check the perils or events that are included or excluded. There will be details in any formal quotation supplied. Other covers may also be provided and terms, again, should be noted within the quotation supplied.

BUSINESS DESCRIPTION

The activities of a business which need to be fully disclosed as they are a material fact (see Material Fact). So every activity and type of method used to carry out an activity should therefore be disclosed. It may be that one of the unusual and infrequent activities carried out by the business actually is a high risk activity and one the insurers/underwriters will need to be made aware of.

BUSINESS INTERRUPTION

Insurance that provides protection for the loss of revenue, turnover or profits and/or continuing fixed expenses resulting from an insured peril operating in respect of your buildings and/or property insurance.

CANCELLATION

Termination of a policy before it is due to expire. There may be a cancellation clause in a policy setting out the condition under which the policy may be cancelled by notice. The period of notice could be anything from 48 hours to 3 months. In most cases this will result in a return premium being paid by the insurer to the insured.

CAPITAL BENEFITS

The amount that is payable under a Personal Accident policy when an insured person is involved in an accident and loses a limb, sight, speech or suffers a permanent total disablement.

CERTIFICATE OF INSURANCE

A document issued by an insurance company or broker that is used to verify the existence of insurance coverage to any insured. The document should list the effective date of the policy, the type of insurance coverage purchased and the level of indemnity or sum insured.

CLAIMS

A loss to the insured or to another which could lead to a claim on a policy. However, an insured has a responsibility on the happening of any circumstance which could give rise to a claim or on receiving verbal written notice of any claim to give notice to an insurer as soon as reasonably or practicably possible. If you are unsure as to whether a claim will arise you should still contact your insurer or insurance broker.

COMMON LAW

Common law consists of the ancient customs and usages of the land, which have been recognised by the courts and given the force of law. It is in itself a complex system of law, both civil and criminal, although it is greatly modified and extended by statute law and equity. It is unwritten and has come down in the recorded judgements of judges who, for hundreds of years, have interpreted it.

COMMUNITY COMPANY

An insurance company whose head office is a member of the State of the European Economic Community.

COMPULSORY INSURANCE

An insurance that is compulsory by law and therefore must be taken out. The most common example of this is motor insurance but this also applies to Employers' Liability insurance amongst others.

CONCEALMENT

Deliberate suppression by a proposer for insurance of a material fact relating to the risk, usually making the contract null and void.

CONDITION PRECEDENT

If a condition of a policy is found to be a Condition Precedent to the validity of the policy then breach of that condition by an insured will allow the insurer to refuse to indemnify for any loss arising under the policy before that condition has been satisfied.

CONSEQUENTIAL LOSS

An indirect loss which accompanies an insured loss such as loss of earnings/profitability/revenue resulting from an insured event or peril.

CONTENTS INSURANCE

Insurance that pays for damage to, or loss of, an individual's or company's possessions whilst they are located within that individual's or company's home or premises.

CONTRACT WORKS/CONTRACTORS ALL RISKS INSURANCE

Insurance specifically designed for builders and a number of ancillary construction and contractor trades working on a contract site. It can cover liabilities, property such as tools and plant and employees' tools.

COVER NOTE

A document issued to the insured confirming details of the insurance cover placed. Some cover notes are a legal requirement, e.g. motor.

DECLARATION ADJUSTMENT

Many liability policies are set up on the basis of estimated wages and turnover for the next year. An insured is required to complete, at the end of the insurance year, actual wages and turnover for the business insured and if that is more than originally estimated, the insurer has the right to charge the additional premium that should have been payable at the beginning of the year.

DEDUCTIBLE

The specified amount a loss must exceed before a claim is payable. Only the amount which is in excess of the deductible is recoverable.

DEFERRED PREMIUM

The part of a premium which, following agreement with underwriters, is payable by instalments, usually quarterly or half yearly.

DIRECTORS & OFFICERS LIABILITY INSURANCE

Liability insurance payable to the Directors and Officers of a company or organisation and indemnifies/reimburses for losses or advancement of defence costs in the event that Directors and Officers suffer a loss as a result of a legal action brought for alleged wrongful acts in their capacity as Directors and Officers.

DUTY OF DISCLOSURE (FOR COMMERCIAL CUSTOMERS)

An insured or a proposer for insurance has a duty to disclose all material facts. Material facts are those which are judged to be material and relevant to a prudent underwriter. In respect of buildings insurance this may be because the construction of a building is about to change, the security of a premises is altered or an extension is to be built to a property. For liability insurances this can include a change of activities, directors or shareholders. The duty is to disclose all such information as soon as an insured or a proposer are aware of such change.

EMPLOYERS LIABILITY INSURANCE

Insurance by employers in respect of their liability to employees for injury or disease arising out of, and in the course of, their employment. With some exemptions this insurance is compulsory in Great Britain, and can only be provided by an authorised insurer.

THE EMPLOYERS LIABILITY TRACING OFFICE (ELTO)

Introduced by the insurance industry to make it easier to search for employer liability insurance policies using a central database.

EMPLOYERS REFERENCE NUMBER

A number that is provided to a business and is sometimes called the PAYE reference number. This is the number that has to be supplied by insurers to the Employers Liability Tracing Office.

ENDORSEMENT

Documentary evidence of a change in the wording of, or cover offered by, an existing policy or qualification of wording if the policy is written on restricted terms. (See Addendum).

ENGINEERING INSURANCE

A policy that can provide boiler and machinery inspection services as well as insurance cover for the pressure vessel and any internal accidents. A property policy provides coverage for the property damage from the result of a boiler explosion. The property policy will not cover the damage to the boiler itself and thus there is a need to insure boilers separately under an engineering insurance policy.

ESCAPE OF WATER

Usually an insured peril which can involve the escape of water from pipes, radiators, boilers, drains and tanks.

EXCESS

The first portion of a loss or claim which is borne by the insured. An excess can be either voluntary to obtain premium benefit or imposed for underwriting reasons.

EXCESS LAYER

A policy which provides additional liability or property cover over an initial primary or "ground up" policy.

EXCLUSION

A provision in a policy that excludes the insurer's liability in certain circumstances or for specified types of loss.

EX-GRATIA PAYMENT

A payment made by an insurer to a policyholder where there is no legal liability to pay.

FIDELITY BONDING

A form of insurance protection that covers policyholders for losses that are incurred as a result of fraudulent acts by its employees to its customers or clients. In the case of security insurance this would be a security guard stealing property from a client he should be protecting from such losses.

FIDELITY GUARANTEE

An insurance to cover policyholders for losses of its own monies (not those of any third parties or clients) that are incurred as a result of dishonest or fraudulent acts of its employees.

FINANCIAL CONDUCT AUTHORITY

This is the new regulator for financial services, including general insurance broking, and replaces the Financial Services Authority.

FINANCIAL LOSS

Insurance that covers liability claims that arise purely from financial losses. The breadth of cover can vary quite markedly and therefore the insured should look at their policy wording or talk specifically with our staff.

FINANCIAL OMBUDSMAN SERVICE

An organisation set up so that qualifying policyholders can ask them to look into a complaint that they do not feel has been settled appropriately by an insurer or financial institution. For further details please contact a member of staff who will supply an appropriate booklet regarding this service. Their web address is www.financial-ombudsman.org.uk

FIRST LOSS INSURANCE

Insurance where the sum insured is accepted to be less than the value of the property but the insurer undertakes to pay claims up to the sum insured, without application of average.

GENERAL CONDITIONS

Important clauses within an insurance policy. They will set out the terms relevant to the policy and what insurers and the insured must do in relation to claims and general underwriting. A breach of any of these can lead to, in certain circumstances, a claim not being paid.

GOODS IN TRANSIT INSURANCE

Covers the transportation of goods and/or materials from one place to another. This can cover your liability in the event of damage or theft whilst the goods are in your custody or control. Customers generally stipulate a requirement for this insurance

GROSS PREMIUM

A term normally applied to gross written premiums before deduction of brokerage and discounts.

GROSS PROFIT

Usually used as a basis for business interruption insurance (see Business Interruption) and usually means the amount by which the sum of the turnover and the amount of the closing stock shall exceed the sum of the amount of the open stock and the uninsured working expenses. The definition can slightly change between insurers and therefore the policy wording needs to be viewed to confirm whether or not this is the case.

HAZARD

A physical or moral feature that introduces or increases the risk.

HIRED-IN PLANT

An insured may have the need to hire-in plant for a particular job or activity and as such will usually have to provide coverage for that item of hired-in plant as it may receive accidental damage whilst it is in the insured's custody or control. This will usually be covered under a contract works or contractual risks policy (as defined above).

INCEPTION DATE

The date from which, under the terms of a policy, an insurer is deemed to be at risk.

INCREASE IN COST OF WORKING

Under a business interruption policy some cover is provided for additional expenditure incurred by the insured solely for the purpose of reducing the shortage in production following an insured event.

INDEMNITY

A principle whereby the insurer seeks to place the insured in the same position after a loss as he occupied immediately before the loss (as far as possible).

INDEMNITY PERIOD

Under a business interruption insurance the period during which cover is proved for disruption to the business following the occurrence of an insured peril.

INDEMNITY TO PRINCIPAL

In the event of any claim in respect of which you would be entitled to receive indemnity under the policy actually being made against a Principal then the policy will provide an indemnity to that Principal and handle the claim matter.

INDEX LINKING

The method used by insurers to keep your sum insured in line with inflation. This will slightly increase your sum insured each year but should mean that the sum insured is correct even after inflation has been taken into account. Usually buildings insurers will use the Royal Institute of Chartered Surveyors Index.

INEFFICACY

Means the failure to carry out a duty or service that an insured or contractor perform in the course of his business. Certain of our policies do provide such cover and also will include deliberate acts wilful default or neglect by the insured, director, partner or employee.

INSURABLE INTEREST

For a contract of insurance to be valid the policyholder must have an interest in the insured item that is recognised at law whereby he benefits from its safety, well being or freedom from liability and would be prejudiced by its damage or the existence of liability. This is called the insurable interest and must exist at the time the policy is taken out and at the time of the loss.

INSURABLE VALUE

The value of the insurable interest which the insured has in the insured occurrence or event. It is the amount to be paid out by the insurer (assuming full insurance) in the event of total loss or destruction of the item insured.

INSURANCE BROKER/INTERMEDIARY

An insurance intermediary is a person or business who advises his client and arranges their insurances. Although he acts as the agent of his client, he is normally remunerated by a commission (brokerage) from the insurer. An insurance broker is a full-time specialist with professional skills in handling insurance business. Since January 2005 intermediaries and brokers must be registered with, and regulated by, the Financial Conduct Authority.

INSURANCE PREMIUM TAX

The Finance Act 1994 introduced this tax on most general insurance risks located in the UK.

INSURED

The person whose property is insured or in whose favour the policy is issued.

INSURER

An insurance company or Lloyd's underwriter who, in return for a consideration (a premium), agrees to make good in a manner laid down in the policy any loss or damage suffered by the person paying the premium as a result of an accident or occurrence.

KNOCK FOR KNOCK

A forbearance agreement between two insurance companies designed to avoid legal action. This arrangement applies to motor vehicle policies and under it each company agrees to pay up to the limits of their respective interests for the damage to the vehicle of their own insured without regard as to who was to blame for the accident.

LABOUR ONLY SUB-CONTRACTOR

Generally work under the direction of the insured and will not provide all materials or tools (with the exception of small hand tools) to be used on a job. As an insured you have direction and control over them. As such these sub-contractors would be regarded as labour only sub-contractors and need to be insured under the principal's insurance policies.

LAPSE

The non-renewal of a policy for any reason.

LATENT DISEASE

An illness which lies dormant for some years before manifesting itself.

LEGAL EXPENSES INSURANCE

Covers policyholders against the potential costs of legal action brought against them by another individual, company, or institution. This can range from providing cover against the possible legal expenses of an action brought by an employee, landlord, tenant, breach of intellectual property amongst others. Generally it is bought before the event although in certain instances it can also be bought after the event. For further clarification please speak to a member of our staff.

LIABILITY

An obligation that legally binds an individual company. Insurances can cover your obligations at law as an employer, householder, tenant and a general common law duty that you will have.

LIMIT

The insurer's maximum liability under an insurance, which may be expressed 'per accident', 'per event', 'per occurrence', 'per annum', etc.

LLOYD'S (OF LONDON)

A Society, incorporated under Act of Parliament of 1871 and known as the Corporation of Lloyd's, which provides the premises a wide variety of services, administrative staff and other facilities to enable the Lloyd's market to carry on insurance business efficiently.

LLOYD'S BROKER

A broker approved by the Council of Lloyd's and thereby entitled to enter the underwriting room at Lloyd's and place business direct with underwriters. Lloyd's brokers must meet the Council of Lloyd's stringent requirements as to integrity and financial stability.

LOSS

Another term for a claim.

LOSS ADJUSTER

Independent qualified loss adjusters are used by Insurers for their experience and expertise necessary to carry out detailed, and in some instances prolonged, investigations of complex and large losses. Although the adjuster's fees are invariably paid by the insurers he is an impartial professional person and makes his judgement on the amount to be paid in settlement solely on the basis of established market practice. It is his task to negotiate a settlement which is within the terms of the policy and equitable to both insured and insurer. Should he himself not be an expert in a particular discipline which is necessary or desirable to pursue his negotiations, he will consult or employ such an expert.

LOSS ASSESSOR

In motor insurance, an engineer.

In other classes a person who, in return for a fee (usually a percentage of the amount claimed), acts for the claimant in negotiating the claim.

LOSS OF KEYS

Cover that can be available under motor insurance policies or under liability insurances where you hold other peoples' or organisations' keys and you loose them whilst in your custody and control.

LOSS OF LICENCE

To operate in a business you may require a licence from a regulator or an authority. There are occasions whereby that licence may be under danger of being lost or revoked or suspended and in which case certain insurance policies will provide coverage that will enable certain legal costs to be paid to protect that licence. You need to ensure that all the claims conditions are followed within a policy and there may be certain exclusions or parameters to the cover and we would suggest looking into the policy wording for a full understanding of the coverage provided.

MATERIAL DAMAGE WARRANTY

Warranty in a business interruption insurance policy stipulating that for the interruption insurance to become effective there must be a policy in force in respect of the material damage and a claim paid or admitted thereunder for such damage caused by an insured peril.

MATERIAL FACT

Any fact which would influence the insurer in accepting or declining a risk or in fixing the premium or terms and conditions of the contract is material and must be disclosed by a proposer, or by the insurer to the insured.

MINIMUM AND DEPOSIT PREMIUM

The premium payable at the start of the policy will be the minimum the insurer will collect and no refunds are permitted for reductions in cover or cancellation. Additional premiums may still be charged – for instance see Declaration Adjustment definition above.

NAME

Another term for an underwriting member of Lloyd's.

NEGLIGENCE

Perhaps the most common form of tort. In Blyth v Birmingham Waterworks Co. (1856) it was defined as "The omission to do something which a reasonable man guided by those considerations which ordinarily regulate the conduct of human affairs would do, or doing something which a prudent and reasonable man would not do." Gives rise to civil liability.

NET PREMIUMS

Term variously used to mean gross premiums net of reinsurance premiums payable, or commission, brokerage, taxes, or any combination of these.

NEW FOR OLD

Some insurance policies are arranged on the basis that a new item replaces the lost, stolen or damaged item with no adjustment at all for the fact that the item lost, stolen or damaged is old.

NO CLAIMS BONUS (OR DISCOUNT)

A rebate of premium given to an insured person by an insurer where no claims have been made by that insured. Very common in motor insurance.

NON-DISCLOSURE

The failure by the insured or his broker to disclose a material fact or circumstance to the underwriter before acceptance of the risk.

NON STANDARD CONSTRUCTION

A property that is not made of a pitched, tiled, or slate roof nor with concrete/breeze block or brick walls.

PASSENGER LIABILITY

The liability of a carrier to passengers.

PERIL

A contingency, or fortuitous happening, which may be covered or excluded by a policy of insurance eg. Storm, Theft or Subsidence.

PERIOD OF RISK

The period during which the insurer can incur liability under the terms of the policy.

PERMANENT HEALTH INSURANCE

Term used to describe contracts of insurance providing continuing benefits in the event of prolonged illness of disability.

PERSONAL ACCIDENT AND SICKNESS INSURANCE

Insurance for fixed benefits in the event of death, or loss of limbs, or sight by accident and/or disablement by accident or sickness. Accident and sickness may be insured together or separately.

POLICY

A document detailing the terms and conditions applicable to an insurance contract and constituting legal evidence of the agreement to insure. It is issued by an insurer or his representative for the first period of risk. On renewal a new policy may well not be issued although the same conditions would apply unless advised to the contrary and would be evidenced by a renewal schedule.

POLICY HOLDER

The person in whose name the policy is issued. (See Insured).

PREMIUM

The consideration paid for a contract of insurance.

PRE-EXISTING MEDICAL CONDITIONS

You should tell your broker or insurer about any illness you are currently suffering from, or have already had, even in the past. These are known as pre-existing medical conditions. For Private Medical Insurance, you will not normally be covered for these conditions, but for Travel Insurance, the Insurer may be able to offer cover, sometimes for a higher premium.

PRIMARY INSURANCE

The first policy taken to protect the liability or the property of an insured and covers from the bottom or "ground up" coverage to a specified limit.

PRODUCTS LIABILITY INSURANCE

These policies cover the insured's legal liability for bodily injury to persons, or loss of or damage to property caused by defects in goods (including containers) sold, supplied, erected, installed, repaired, treated, manufactured, and/or tested by the insured.

PROFESSIONAL INDEMNITY INSURANCE

This policy protects a professional man against his legal liability towards third parties for injury, loss, or damage, arising from his own professional negligence or that of his employees.

PROPOSAL FORM

A form sent by an insurer to a person requiring insurance so as to obtain sufficient information to allow the insurer to decide whether or not to accept a risk and what conditions to apply if it is accepted.

PROPOSER

The person or business applying for insurance. Once cover has commenced the proposer is usually then referred to as the Insured.

QUOTE/QUOTATION

A statement by an insurer of the premium he will require for a particular insurance.

RE-BUILD VALUE

The cost to re-build/reinstate your property. This should include a cost for any out-buildings, garages, sheds, driveways, patios, terraces etc.

REINSTATEMENT

Making good. Where insured property is damaged, it is usual for settlement to be effected through the payment of a sum of money, but a policy may give either the insured or insurer the option to restore or rebuild instead.

RENEWAL

The process of continuing an insurance from one period of risk to a succeeding one.

RETROACTIVE DATE

The date from which a claim can be acceptable under a policy.

RISK

The peril insured against or an individual exposure.

RISK MANAGEMENT

The identification, measurement and control of risks that threaten the assets and earnings of a business or other enterprise.

SALVAGE

A recovery of all or part of the value of an insured item on which a claim has been paid. The insurer will normally dispose of the item and apply the proceeds to reduce the cost of the claim.

SCHEDULE

The part of a policy containing information relevant to that particular risk. The greater part of a policy is likely to be identical for all risks within a class of business covered by the same insurer.

STATEMENT OF FACT

An alternative to a completed proposal form. A statement provided by the insurer clarifying the basis on which insurance is accepted and what conditions apply.

STATUTE LAW

Presently the most important source of law is statute law, otherwise known as Acts of Parliament; which may create entirely new law, over-rule, modify, or extend existing principles of common law and equity, and repeal or modify existing statute law.

SUBJECT TO SURVEY

Phrase used by an insurer to signify provisional acceptance of an insurance pending inspection by a surveyor whose report is necessary to determine the rate and conditions applicable.

SUBSIDENCE

The downward movement of the site on which a building stands, where the movement is unconnected with the weight of the building. Essentially the soil beneath the building foundations is unstable. This can be an insured peril under residential and commercial buildings policies. Under commercial policies you generally need to state that you want subsidence as an insured peril, whilst under home policies subsidence is usually provided as a standard peril, although not in all cases.

SUM INSURED

The maximum amount payable in the event of a claim under the contract of insurance.

THIRD PARTY

A person claiming against an insured. In insurance terminology the first party is the insurer and the second party is the insured.

THIRD PARTY LIABILITY

Liability of the insured to persons who are not parties to the contract of insurance and are not employees of the insured.

TORT

A civil wrong which unfairly causes someone else to suffer loss or harm resulting in legal liability for the person who commits the tortuous act.

TRACKSIDE

Generally refers to an area that is within 3 metres (10 feet ) of the nearest rail of any line or within 1.25 metres ( 4 feet ) of a station platform edge. If working within or up to these parameters all train movement should be blocked or a suitable fence or barrier be erected between the nearest open line and the site being worked upon.

These distances can be altered so you will need to specifically look at the policy wording and any appropriate wording of an endorsement.

The activity and work should be referred to Underwriters as this work would be considered a material fact.

TURNOVER

The amount of money taken by a business in a particular period. It is all sales income fees and commission and within any particular insurance period.

UNDER INSURANCE

Where the sum insured is less on the insurance policy than its real value. Where there is underinsurance an insurer will usually reduce any claim by the proportion of under-insurance. (See Average).

UNDERLYING INSURANCE

The primary insurance as distinct from excess insurance.

UNDERWRITER

A person who accepts business on behalf of an insurer. (See Lloyd's).

UTMOST GOOD FAITH

Insurance contracts are contracts of utmost good faith (uberrima fides), which means that both parties to the contract have a duty to disclose, clearly and accurately, all material facts relating to the proposed insurance. Any breach of this duty by the proposer may entitle the insurer to repudiate liability.

WARRANTY

Promise by an insured or policyholder that something is in place or correct or will be done. For instance, there is often an alarm warranty on a policy which stipulates that the alarm must be put on every time a person/persons leave the premises. Should a theft occur whilst the premises is unoccupied and it is proven that the alarm was not set, the insurers are entitled to repudiate the claim because there would have been a breach of the warranty/alarm warranty in this case.

WEAR AND TEAR

This is the amount deducted from claims payments to allow for any depreciation in the property insured which is caused by its usage.

WET PERILS

Insured events or perils as a result of storm, flood and escape of water/oil from fixed water/oil installations, pipes, tanks and radiators – for a full definition of all events or perils covered then please look through a copy of the policy wording.

WITHOUT PREJUDICE

1. Term used in discussion and correspondence. Where there is a dispute or negotiations for a settlement and terms are offered 'without prejudice', an offer so made or a letter so marked and subsequent correspondence cannot be admitted in evidence without the consent of both parties concerned.

2. Term also used by an underwriter when paying a claim which he feels may not attach to the policy. This payment must not be treated as a precedent for future similar claims.

WRONGFUL ARREST

Arrest of a person when there is no legal authority to do so.

YEAR END ADJUSTMENT

Many liability policies are set up on the basis of estimated wages and turnover for the next year. An insured is required to complete, at the end of the insurance year, actual wages and turnover for the business insured and if that is more than originally estimated the insurer has the right to charge the additional premium that should have been payable at the beginning of the year.