Checking a Policy Schedule Against the Underlying Wording

Why document discrepancies occur

Discrepancies usually arise during the manual assembly of the policy pack. While the underlying wording is often a standardised template, the schedule is typed manually by an underwriter or technician. If they select the wrong version of a standard endorsement or fail to carry over a specific limit from the quote, the documents will conflict.

In the event of a dispute, the schedule typically takes precedence over the wording because it is considered a 'bespoke' expression of intent. However, relying on this legal principle is risky. It is far safer to ensure the documents align perfectly before an incident occurs.

A step-by-step verification process

To perform an effective check, you must look beyond basic contact details. You are searching for 'silent' gaps where the schedule mentions a cover that the wording does not define, or where the wording includes exclusions that the schedule was supposed to override.

Follow these specific steps to ensure accuracy:

• Verify that the 'Form Number' or 'Edition Date' listed on the schedule matches the footer of the policy wording document.
• Compare the 'Section' headings. If the schedule shows 'Section 3: Business Interruption', ensure Section 3 in the wording actually relates to that cover.
• Check the Defined Terms. If the schedule uses a specific term like 'Gross Profit', ensure the wording defines it in the same way your business calculates it.
• Cross-reference endorsements. If the schedule lists 'Endorsement 002 - Flood Exclusion Removed', you must confirm that the wording actually contains that specific text.
• Audit the limits and sub-limits. A schedule might state a £10m limit, but the wording might contain an inner limit for specific risks that you did not agree to.

Common red flags to look for

One frequent issue is the 'Defined Territory'. A schedule might list 'Worldwide', but the underlying wording might exclude North America unless specifically endorsed. If the endorsement is missing from the wording, you have a potential coverage gap.

Another area of concern is the 'Subjectivities' list. Often, a schedule will list requirements like 'Minimum Security Standards'. You must check the wording to see what the penalty is for non-compliance. If the wording says a breach voids the policy, but your schedule implies it only increases the excess, you must resolve this conflict immediately.

For those handling high volumes of these documents, manual review is time-consuming and prone to human error. Tools like Jittan's DocumentChecker can help to compare documents, schedules and source files to spot mismatches, omissions and accuracy issues automatically.