The basic characteristic of a qualifying contract of insurance is that it provides cover:
A contract of insurance is excluded from qualifying if it:
The effect of the first exclusion is to exclude from relief
premiums for mixed policies; that is, policies that cover both
qualifying and other liabilities. If such policies were not
excluded it would be necessary to apportion premiums between cover
that was qualifying and other cover. Such apportionment could be
The purpose of the exclusions is also to keep the operation of the relief relatively simple by excluding policies that go significantly beyond the provisions of annual cover against qualifying liabilities and costs and expenses associated with them.
See EIM30517 for more detail about the "connected policy" exclusion.