CHAPTER 2 - A Flashcards
What does agricultural crop and forestry/hail insurance cover?
Risks associated with commercially farmed crops such as wheat, fruit, tobacco, and herbs
The main peril is loss of crop due to weather or disease.
What is a typical claim in agricultural crop insurance?
Loss of crop due to frost or hail damage
This is common for tree fruit crops where hail at the wrong time can destroy buds.
What is bloodstock insurance?
Insurance that specifically covers racehorses and show-jumpers
It includes coverage for sickness, injury, and total loss.
What does livestock insurance cover?
All animals that can be reared commercially, including fish
Important to insure against loss by disease.
What is a common claim scenario for racehorses?
Euthanization due to injury sustained in a race
The payout will be the insured value of the racehorse.
What happens if a stallion or mare proves to be infertile?
Their value drops dramatically, allowing for a claim based on depreciation
This applies to both racehorses and breeding bulls.
What is contingency insurance?
Insurance related to entertainment or sporting events
It covers various sub-categories including event cancellation.
What does concert or event cancellation insurance cover?
Costs of refunding tickets and rearranging events
This is critical when events are disrupted by unforeseen circumstances.
What factors do underwriters consider for event cancellation insurance?
Tour schedule, venue, health of the artist, cancellation policy
These factors help assess risk and potential for rescheduling.
What are common claims in event cancellation insurance?
Cancellation of events like Wimbledon matches, cricket tests, or music concerts
Often due to weather or artist health issues.
What is over redemption insurance?
Insurance against costs exceeding expected claims on promotional offers
This arises when too many people claim free gifts from promotions.
How do insurers determine coverage for over redemption?
By considering normal sales levels and adding a safety margin
Coverage is triggered when redemption exceeds expectations.
What does prize indemnity insurance cover?
Costs associated with awarding prizes for achieving specific feats
Examples include ‘hole in one’ prizes at golf competitions.
What is a key aspect of prize indemnity insurance?
Statistical calculation of the odds of the incident occurring
An independent adjudicator may be present to prevent cheating.
What factors are important for rating contingency insurance?
Difficulty of the event and statistical probability of prize claims
This ensures accurate assessment of risk.
What does personal accident insurance cover?
Covers the insured against accidental injury with predetermined benefits for various injuries
Different payout levels for dominant vs non-dominant hands, with weekly or monthly benefits.
What are common exclusions in personal accident insurance?
Exclusions often include longstanding or chronic conditions and specific hobbies
Hobbies such as skydiving may lead to exclusions.
What does kidnap and ransom insurance typically cover?
Payment of ransom, medical treatment costs, salary during captivity, and hostage negotiators
Insurers assess the risk based on the insured’s profile and security measures.
What is ‘Contractors’ all risks’ (CAR) insurance?
An insurance policy for contractors covering physical damage and liability during construction projects
It is often taken out by the head contractor for major projects.
What key aspects are considered in construction insurance?
- Experience of the contractor
- Contracts entered into
- Contract value
- Location and timing of construction
It is essential to keep insurers updated on changes in sums insured.
What is covered under construction insurance?
- Loss or damage to building works
- Machinery movement
- Business interruption
- Public liability
- Employers’ liability
Coverage may extend to damage to construction machinery.
What are normal exclusions in construction insurance?
- Defective design
- Existing property
- Breakdown or explosion
- Wear and tear
Consequential damage from defects is usually covered.
What does property insurance generally cover?
- Buildings
- Machinery
- Stock
Coverage can vary depending on the specific use of the property.
What are the typical heads of cover in an all risks property policy?
- Fire
- Lightning
- Explosion
- Earthquake
- Aircraft damage
- Riots/strikes
- Malicious acts
- Storm, flood or escape of water
- Impact damage
Each type of coverage has specific definitions and exclusions.