Quick Reference

1 The protection against risk which an insurance policy provides for the policy-holder. This may be limited as to the type of risk covered: for example, a motor policy may cover third-party risk only, or extend to protection against fire, theft, and accidental damage. Cover may also be limited in extent, covering losses only above some minimum or below some maximum amount.

2 The ratio of the total profits of a business to its dividend payments. High dividend cover means that dividends are unlikely to be cut if profits decrease, whereas low dividend cover leaves investors exposed to cuts in dividends if a company encounters bad times.

Subjects: Economics.

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