Chapter 2

Question 1

What is an excess?

Answer 1

An excess is an amount deducted from each claim and is borne by the insured

Question 2

What is an exclusion?

Answer 2

An exclusion is a peril that is named in the policy as being specifically not covered by that policy

Question 3

What is an indemnity policy?

Answer 3

An indemnity policy seeks to place the insured in the same position financially as they were before the event leading to the loss occurred

Question 4

What is a benefit policy?

Answer 4

A benefit policy pays out a pre-agreed amount should a defined event take place. Often the events covered by the benefit policies have consequences on which no monetary value can be placed, eg. The loss of a limb.

Question 5

When do you need contents cover?

Answer 5

A person will only need to buy contents cover when they are living in rented property as occupier. The landlord generally buys insurance for the building as they are the one who suffers loss should it be damaged or destroyed.

Question 6

What is business interruption?

Answer 6

By its very nature business interruption insurance is designed to cover the financial impact on the business of damage caused to the premises by the operation of an insured peril

Question 7

Take a look at your own motor policy what is provided?

Answer 7

Third party cover
Accidental damage cover
Theft cover
Glass breakage

Question 8

What’s the different between third party, fire and theft cover and comp?

Answer 8

In comp cover policy the insureds own vehicle is covered for the damage or loss over and above that caused the theft, fire, lightening or explosion

Question 9

Three examples of where a claim could arise under a public liability insurance policy ?

Answer 9

A sign hanging from an insureds premises may fall down and injure passers by
A charmer could slip on a wet floor
A loose roof tile could blow from the insureds building damaging a vehicle parked on the street

Question 10

Exclusions inserted in the public liability insurance policy

Answer 10

Many exclusions are inserted because there are more specific policies available to cover these risks

Question 11

Example of where professional person gives advice which leads to someone suffering loss or damage

Answer 11

Architect designing a house incorrectly or a stockbroker recommending some shares in a disastrous company

Question 12

Four levels of cover available for motor insurance ?

Answer 12

Road traffic act only
Third party only
Third party fire and theft
Comp

Question 13

Personal accident policy?

Answer 13

Is a benefit policy whereby a sum is fixed in advance for a certain specified event and does not seek to indemnify an insured

Question 14

Personal accident policy benefits?

Answer 14

Death
Loss of sight
Medical expenses

Question 15

Buildings defined in household policy?

Answer 15

Main structure of the private dwelling and includes garages, sheds, green houses and other outbuildings. Anything you would normally leave behind on moving is part of the building.

Question 16

Travel policies contain?

Answer 16

Personal accident benefits 
Loss of deposits
Baggage and personal effects and money 
Personal liability 
Delayed baggage 
Travel interruption

Question 17

Standard commercial fire policy ?

Answer 17

Fire
Lightning
Explosion

Question 18

What phrase is under the theft policies?

Answer 18

Theft must include an element of force or violence (either breaking in to or out of the insured premises) this excludes things such as entry by key or by trick which should strictly speaking be included if the acts definitions were used

Question 19

Cover under employers liability?

Answer 19

Covers legal liability for damages plus costs and expenses incurred for any employee sustaining bodily injury, disease, illness or death arising out of and in the course of employment by the insured. Property damage is not covered.

Question 20

Purpose of professional indemnity policy?

Answer 20

Covers the legal liability of professional persons for injury, damage or financial loss to clients or public as a result of a breach of professional duty or negligent acts, errors or omissions

Question 21

What is provided under extended warranty policies?

Answer 21

Will cover repairs to items covered following electrical and mechanical defects, for a specified period of up to five years