Chapter 3- COBs in London Market

Question 1

First party insurance

Answer 1

Any damage to insured property
Referred to as particular average
Each side has to pay for each other’s ship
But can claim back the money from hull insurance after excess

Question 2

Builders risk

Answer 2

Insurance against time building and cost

Question 3

Loss of earnings ship

Answer 3

14 day waiting period, 150 day indemnity
If damage prevents income
Must be market or business risk instead

Question 4

Difference between cargo and goods

Answer 4

Cargo physical items, not storage

Goods cover for person or organisation moving them

Question 5

Jewellers block insurance

Answer 5

Between trade shows or jewellers

Physical loss or damage

Question 6

Satellite pre launch insurance

Answer 6

Off risk when ignited

Aggregation of insured items likely, same place

Question 7

War and strikes insurance

Answer 7

Can cancel and immediately reinstate

Available as the ship is constantly moving between areas, otherwise would be uninsurable

Question 8

P and I marine liabilities

Answer 8

Injuring someone else or property
Crew, visitors, pollution,
Also purchased by ports

Question 9

Political risks

Answer 9

Restrictions of hostile government actions
Asset risks such as CEND CCP
Frustration risks such as non payment and non delivery
Alternative to slow export credit schemes

Question 10

Offshore energy

Upstream

Answer 10

Exploration
Construction of rigs
Operational physical and liability
War risks
Windstorm risks
Lack of mobility

Question 11

Property insurance

Answer 11

Includes reinstatement

Stock, theft, glass, goods in transit (non marine)

Question 12

Percuniary insurance

Answer 12

Money- cash in transit

Fidelity guarantee- against employee fraud

Question 13

Construction insurance (percuniary)

Answer 13

Contractors all risks- by contractor for subcontractor

Erection all risks- machinery, combines 3rd party and bodily, adage and liability

Question 14

Downstream energy

Answer 14

Onshore
Refining elements
Midstream is pipelines

Question 15

Business interruption

Answer 15

Contingent business interruption- covers loss of power etc.

Advanced loss of profits ALOP- additional cover on CAR and EAR to cover delay of materials or damage

Question 16

Casualty (non marine liability)

Answer 16

Workers compensation
Public liability- e.g. Riding act
Professional liability
Motor- not London market
General liability- e.g. Advertising injury
Products liability

Question 17

Bloodstock

Answer 17

Horses, farms

Death or illness and future offspring

Question 18

Contingency insurance

Answer 18

Event cancellation
Weather
Prize indemnity- large payout
Death and disgrace
Over redemption of offers

Question 19

Personal accident

Answer 19

No indemnity, as no value
Accident, sickness, unemployment cover
Death in service

Question 20

Kidnap and ransom

Answer 20

Covers payout, medical, specialist team
Secret insurance
Covered in marine for pirates

Question 21

Intellectual property insurance

Answer 21

Rights to inventions, trademarks, copyright

Legal cost of defending

Question 22

Aviation- physical damage

Answer 22

Construction, propulsion, experience of pilot

Take off, flying , landing

Question 23

Aviation liability

Answer 23

Passengers,
Third party- baggage handler etc
Product related, fuel, food etc

Question 24

Aviation loss of license

Answer 24

Pilot failing medical
Personal replacement income
Preventing trade

Question 25

Airport operator policy

Answer 25

Premises liability
Products liability
Hangar keepers

Question 26

Advantages of reinsurance

Answer 26

Increases capacity
Net position = gross - reinsurance
Smooths peaks and troughs
New COBs
Protecting a portfolio- facultative /treaty
New territories

Question 27

Captive insurers

Answer 27

Takes risk from parent

Not impacted by premium increases

Question 28

Mutual insurers

Answer 28

Like minded individuals forming insurance pool, often against certain COBs