Chapter 10 Flashcards
Underwriting Exposure Management
Hazard
A condition that makes the occurrence of an accident more likely.
Moral Hazard
The likelihood of loss caused by some deficiency in the character of the insured.
Physical Hazard
A physical condition associated with property, material, or equipment that increases the chance of loss.
What areas can an insurer focus on to gather information about possible physical hazards?
1- Construction of the property 2- Maintenance 3- Downspouts 4- Exit doors 5- Frontage 6- Railway sidetrack 7- Floors 8- Stairs 9- Lighting 10- Heating 11- Elevators 12- Escalators 13- Security measures 14- Food 15- Liquor 16- Hazardous items 17- Employees
Loss Exposure
A hazardous situation or physical circumstance that makes an individual or an organization vulnerable to loss, damage, or injury, and will lead to financial loss.
Liability Loss Exposure
The possibility of a claim being brought against insured entities alleging their legal responsibility and requiring a defence.
A liability loss under an insurance policy is a claim for monetary damages because of some type of injury to another party.
List some areas in which legal liabilities arise through liability loss exposures.
1- Premises owned or rented
2- Tenant’s legal liability
3- Employer’s liability (from having employees)
4- Contractual liability (leases)
5- Products liability (manufacturing operations)
6- Bailee’s liability (dry-cleaning operation)
7- Environmental exposure
List ten sources of information an underwriter can use to identify liability risk.
1- Application for insurance 2- Checklists 3- Inspections 4- Surveys 5- Insurance policy reviews 6- Procedure and policy reviews 7- Compliance reviews 8- Contract reviews 9- Financial statement analysis 10- Claims information
What information is requested on an application?
1- Identity of the applicant to be insured 2- Loss and policy history 3- Limits and coverage 4- Location details 5- Gross receipts 6- General application information 7- Products or completed operations
ULC
Underwriters Laboratories Canada
1- Its appearance on a product demonstrates a stamp of approval
2- An independent standards development organization, testing lab, and certification body for products.
CSA
Canadian Standards Association
1- A not-for-profit association serving business, industry, government and consumers in Canada, and the global marketplace.
2- It helps to develop standards to enhance public safety and health and to promote safety generally.
How do ULC and CSA assist underwriters?
Underwriters would be reassured by products that qualified for certification by independent bodies.
What types of loss exposures are associated with contractors?
a- Asbestos b- Caisson c- Dredging d- Excavating e- Hot tar roofing
Caisson
A watertight structure used to work on the foundations of a bridge pier, a concrete dam, or to repair a ship. They allow workers to carry out construction work under water.
What additional information would an underwriter require when considering a construction project?
1- Permits obtained 2- Who controls and supervises the project 3- Review plans, specifications, and permits 4- Height and depth of work 5- Materials and machinery to be used 6- Nature of tools or equipment -- Ownership of equipment -- Appropriateness for work -- Condition of equipment -- Hazards associated with the equipment 7- Repairs to structurally defective buildings 8- Safety and security measures -- Barricades -- Warning signs -- Lighting 9- Safety regulations