7 Handling Property and Business Interruption Claims

Question 1

Which rules require policyholder ot be kept informed

Answer 1

ICOBS 8

Question 2

What is reservation of rights?

Answer 2

Claim handling continues, but claim may be declined later

Question 3

Commercial / building - what basis?

Answer 3

First loss basis - sum insured does not represetn full value

Question 4

Excess

Answer 4

Opposite to self insure - some commercial policyholders = £100k excess

Question 5

Deductible is?

Answer 5

Pay first part of claim - discount on premium. Different deductibles for different perils

Question 6

Aggreagate deductible is?

Answer 6

Maximum amount of deductibles per year (4x deductible, minimum aggreagte £50k)

Question 7

Working excess is

Answer 7

so policyholder does not submit minor claims

Question 8

Average =

Answer 8

Insured £ / Value £ x loss = liability

Question 9

Reinstatement is…

Answer 9

property lost or destroyed or damaged

Question 10

Is wear & tear taken into account for reinstatmement

Answer 10

No

Question 11

BI Claims take into account:

Answer 11

Turnover and pgross profit for last year.
Comapre reduced turnover
Add additional costs of working
Less savings
Amount payable

Question 12

Arbitration

Answer 12

Binding
Arbitration Act 1996
Expensive expert evidence not required

Question 13

Mediation

Answer 13

Non binding

Question 14

Early neutral evaluation

Answer 14

Neutral 3rd party (often judge). Commercial court. Non binding

Question 15

Expert determination

Answer 15

Expert decides. Binding.

Question 16

If ADR fails

Answer 16

Court - CPR Rules