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Chapter 7 Contract wordings 7/29

Definition of ‘loss occurrence’
1. The words ‘loss occurrence’ shall mean all individual losses arising out of and directly occasioned by
one catastrophe. However, the duration and extent of any ‘loss occurrence’ so defined shall be limited
to:
a. 72 consecutive hours as regards a hurricane, a typhoon, windstorm, rainstorm, hailstorm and/or
tornado
b. 72 consecutive hours as regards earthquake, seaquake, tidal wave and/or volcanic eruption
c. 72 consecutive hours and within the limits of one City, Town or Village as regards riots, civil
commotions and malicious damage
d. 72 consecutive hours as regards any ‘loss occurrence’ which includes individual loss or losses
from any of the perils mentioned in (a), (b) and (c) above
e. 168 consecutive hours for any ‘loss occurrence’ of whatsoever nature which does not include
individual loss or losses from any of the perils mentioned in (a), (b) and (c) above
and no individual loss from whatever insured peril, which occurs outside these periods or areas, shall
be included in that ‘loss occurrence’.
2. The Reinsured may choose the date and time when any such period of consecutive hours
commences and if any catastrophe is of greater duration than the above periods, the Reinsured may
divide that catastrophe into two or more ‘loss occurrences’, provided no two periods overlap and
provided no period commences earlier than the date and time of the happening of the first recorded
individual loss to the Reinsured in that catastrophe.’
It is common for UK property catastrophe excess of loss treaties to add the freeze extension to the
standard hours clause LPO98A. This extension gives the reinsured the option of aggregating all
claims occurring during a period of 168 consecutive hours, which result from collapse caused by the
weight of snow and water damage from burst pipes and/or melted snow.
Freeze extension to LPO98A

Notwithstanding the above, as regards loss or losses from collapse caused by weight of snow
and water damage from the burst pipes and/or melted snow, the Reinsured shall have the option Reference copy for CII Face to Face Training
to deem any one ‘loss occurrence’ to be the aggregate of all such individual losses which occur
during the period of 168 consecutive hours within the United Kingdom. No period may
commence earlier than the date and time of the happening of the first recorded individual loss to
the Reinsured in that ‘loss occurrence’ and the periods of two or more ‘loss occurrences’ may
not overlap. Chapter

For contracts with US exposure to hurricanes the hours limitation is typically applied to ‘Named Storms’; 7
that is any storm or storm system declared by the US National Hurricane Center (NHC), a division of the
US National Weather Service.
Activity
Visit the NHC website and find past track maps for hurricanes in the 2000s which were the:
• deadliest;
• costliest; and
• most intense landfalling.
www.nhc.noaa.gov/data

‘Each loss occurrence’ – casualty excess of loss
‘Loss occurrence’ is often defined to mean any one disaster or casualty or accident or series of disasters
or casualties or accidents or losses arising out of or caused by one event. However, this definition works
less well for claims which do not arise from a sudden and identifiable accident or event, for example,
occupational disease and products liability claims which may arise from gradually operating causes
spread over many years.
In employers’ liability and workers’ compensation reinsurances, it is usual to incorporate one of the Refer to
section D10G for
standard accident circle occupational disease (ACOD) clauses whose provisions are stated to override ACOD clauses
any other conflicting provisions. In this way, the original ‘loss occurrence’ definition is replaced with one
tailored for claims resulting from occupational disease and physical impairment.