The amount which is deducted from the indemnity under an insurance or reinsurance contract. The insured is in effect its own insurer up to the amount stipulated in the deductible. For example, if the policy provides an indemnity of £1 million and a deductible of £100,000 and the insured suffers a loss of £1.1 million, the insurer will only be liable for £900,000 (£1 million less £100,000). In principle, a deductible is different from an excess, but in practice both provisions might have the same effect.