01 / The meaning
What it means.
An insurer may use estimated turnover, wages, stock values or another exposure measure at inception, then adjust the premium when actual figures become available. The policy sets the measure, rate and adjustment timetable. A minimum premium can limit any refund even if the business performs less work than expected. Deposit premium and minimum premium therefore describe different features.
Treat the estimate as a documented business forecast, not a figure chosen solely to reduce the first invoice. Keep the supporting accounts and explain material changes in activity. Reconcile the insurance declaration with the exact definition of the exposure being measured: accounting revenue or payroll may not match it. Budget for a possible additional premium so the adjustment does not become an unexpected cash-flow problem.
02 / Put it in context
A practical example.
Hypothetical example: an equipment hire business starts a policy using forecast annual revenue. Actual revenue is higher after a major contract, so the insurer calculates an adjustment using the agreed rate and declaration rules.
This example illustrates the term. It does not predict a claim outcome.
03 / Read the detail
What to check.
- Confirm the exposure measure and adjustment calculation in writing.
- Check the minimum premium and whether refunds are available.
- Record the declaration deadline and documents needed for reconciliation.
04 / Start a useful conversation
A question for your broker.
What actual figures will determine the final premium, and is there a minimum charge?
05 / Connect the terms
Keep the meaning in context.
06 / Apply it to your business
Related insurance guides.
Further reading
Read the source guidance alongside the relevant policy wording.
General information only. This does not take into account your objectives, financial situation or needs. Before acting, consider whether the information is appropriate for you. Cover is subject to insurer acceptance and the policy terms, conditions, limits and exclusions. Read the Financial Services Guide and the relevant PDS (where applicable) and/or policy wording before deciding.
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