Work And Materials Clause

AAA

DEFINITION of 'Work And Materials Clause'

A provision in many property insurance policies that allows the policyholder to use the insured premises to store materials and to use the materials in the manner required by his or her line of work. The work and materials clause circumvents the increased hazard clause that is found in standard fire policies, which states that the insurer would not be liable for losses occurring when a hazard is increased and is known by and within the control of the insured. Without the provision, a policy could be voided for misrepresentation of an undisclosed increased hazard, fraud or concealment (the misrepresentation of a material fact, before or after a loss).

INVESTOPEDIA EXPLAINS 'Work And Materials Clause'

The work and materials clause acts as protection for policyholders against a claim that the insured knowingly increased a hazard if it can be shown that the materials or work in question were essential to the policyholder's line of work. The clause works to the benefit of the policyholder since without it claims could be denied based on the insured's prior knowledge and control of a hazard.

RELATED TERMS
  1. Against All Risks - AAR

    An insurance policy that provides coverage against all types ...
  2. Business Risk Exclusion

    A type of coverage that is often omitted from product liability ...
  3. Hazard Insurance

    Insurance that protects a property owner against damage caused ...
  4. Casualty Insurance

    A broad category of coverage against loss of property, damage ...
  5. Homeowners Insurance

    A form of property insurance designed to protect an individual's ...
  6. Premium to Surplus Ratio

    Net premiums written divided by policyholders’ surplus. The premium ...
Related Articles
  1. Entrepreneurship

    Don't Get Sued: 5 Tips To Protect Your ...

  2. Taxes

    Cut Taxes By Reporting Property Damage

  3. Home & Auto

    The Importance Of Property Insurance

  4. Entrepreneurship

    5 Expensive Small Business Mistakes

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center