ex gratia payment
Latin: "by favor." A voluntary payment made by the insurer in response to a loss for
which it is not technically liable under the terms of its policy.
ex gratia payment
Definition Add Save See
A sum of money paid when there was no obligation or liability to pay it. For example a
lump sum payment over and above the pension benefits of a retiring employee. !n
insurance claims it may ta"e the form of payment for which the insurer did not appear to
be liable. #x gratia is Latin for "out of goodwilll." Also called ex gratia settlement.
What Is an Ex Gratia Payment?
An ex gratia payment is something that is made without the giver recogni$ing any legal
obligation or liability. %ompensation payments are often made ex gratia when an
organi$ation or government is prepared to compensate victims of events such as
accidents. A company that conducts layoffs could also ma"e ex gratia payments to the
affected employees.
What is the difference between an ex gratia payment and
compensation...regrds glynn?
&ore specifically ex gratia is a payment not legally re'uired or necessary
(literally means "by favor" in latin) whereas compensation is renumeration
received for services
#x gratia (* " s re i+ *,
-./
also spelled ex-gratia) is Latin for "by favour" and is
most often used in a legal context. 0hen something has been done ex gratia it has been
done voluntarily out of "indness or grace. !n law an ex gratia payment is a payment
made without the giver recognising any liability or legal obligation.
Examples of ex gratia payments
%ompensation payments are often made ex gratia when a government or organi$ation is
prepared to compensate victims of an event such as an accident or similar but not to
admit liability to pay compensation or for causing the event.
.
An insurance company may ma"e an ex gratia payment to customers where a
claim does not meet the terms and conditions but the company chooses to ma"e a
voluntary payment out of "indness or compassion without recogni$ing any
obligation to ma"e such a payment
0hen the 1SS Vincennes fired upon !ran Air passenger Flight 233 in .455
"illing some 647 individuals the 8resident of the 1nited States decided that the
1nited States would offer compensation on an ex gratia basis to the families of
the victims.
!n a more routine context the document Suffol" %ounty %ouncil #ducation: #x9
:ratia 8ayments for Loss of or Damage to 8ersonal 8roperty shows how an
education authority compensates victims for damage but without accepting a
liability to do so.
Following the .44; <lac" =aw" shootdown incident on August 62 .44; the
1.S. Department of Defense announced that it would pay 1.S.>.77777 in
compensation to the families of each of the non91.S. personnel "illed in the
friendly9fire incident.
&aharashtra %hief &inister ?ilasrao Deshmu"h announced ex9gratia payments of
@s .77777 (approx. 1S>6777) to the next of "in of those who died in the
&umbai train bombings (.. Auly 6772). Bhe inCured would be given @s 37777
(approx. 1S>.777) each.
8rime &inister of &alaysia Datu" Seri Abdullah =aCi Ahmad <adawi announced
undisclosed ex9gratia payments to the Cudges that were affected during the .455
&alaysian %onstitutional %risis in Aune 6775.
&alaysian Airlines offered an ex gratia condolence payment of 1S>3777 to the
families of each passenger aboard the missing (assumed crashed) flight &=DE7
though those affected have considered the conditions unacceptable and have
as"ed the airline to review them
