01 / The meaning
What it means.
Some policies calculate the premium using turnover, wages or another exposure measure, while still applying a minimum amount. If the final declaration is lower than estimated, the calculation may reach that floor. Other arrangements specify a minimum retained amount following cancellation. Read the actual term rather than assuming that every reduction in activity produces a proportional refund.
For seasonal businesses or a short project, the minimum can materially affect the cost of buying, adjusting or ending cover. Broker fees, taxes and premium funding costs may have separate treatment. Ask for a worked calculation covering the relevant dates and figures. Compare the financial result alongside the cover period and obligations that may continue after trading slows.
02 / Put it in context
A practical example.
Hypothetical example: A contractor’s annual premium is adjustable by turnover, subject to a stated minimum. Turnover finishes well below the estimate. The owner requests the final calculation; the minimum may limit a refund even though the exposure measure has fallen.
This example illustrates the term. It does not predict a claim outcome.
03 / Read the detail
What to check.
- Distinguish minimum quoted premium from minimum retained premium.
- Check the exposure adjustment and cancellation provisions.
- Identify separate fees, taxes and funding amounts in any refund.
04 / Start a useful conversation
A question for your broker.
What is the lowest premium retained if our activity or cover period reduces?
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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