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LM1 DB > Chapter 3 - Main classes of business written in the London Market > Flashcards

Chapter 3 - Main classes of business written in the London Market Flashcards

1
Q

What are ‘honour policies’?

A

Policies not enforceable by law because insurable interest isn’t always clear aka PPI - policy proof of interest

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2
Q

What is first party or short-tail insurance?

A

Physical loss or damage e.g., Hull / Vessel

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3
Q

What is tail?

A

Time lag between insurance incepting and the final closure of claims under the insurance

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4
Q

What is the term used in Marine for physical damage to the insured property?

A

Particular Average

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5
Q

What does maritime law state if two vessels collide?

A

Both have to pay damages to the other

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6
Q

What is builders risk insurance?

A

Construction of a vessel

Physical damage and liability cover

Purchaser or owner

Length of time and building process value increases

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7
Q

What is loss of earnings insurance (pecuniary)?

A

If a shipowner cannot use a ship for income

Usually because of physical damage

aka BUSINESS INTERRUPTION

Waiting periods - wait a period of days before claiming

Policy limit - valid for x amount of days

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8
Q

What is cargo/goods in transit insurance?

A

Physical damage to the goods whilst on their journey

No liabilities

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9
Q

What is stock throughput insurance?

A

Removes gaps in coverage between static and goods in transit

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10
Q

What is jeweller’s block insurance?

A

Non-marine but Cargo

Jewellery manufacturing, trade shows, exhibitions, retail

Physical loss or damage

Disappearance excluded

Package policy

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11
Q

What is specie insurance?

A

Non-marine but Cargo

Physical loss/damage to loose gemstones, metals (gold, silver etc), valuable documents

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12
Q

What is fine art insurance?

A

Physical loss/damage to ‘installations’ - paintings, sculptures, sound, light

Depreciation of value

Museums, private collectors

Transit or static

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13
Q

What is satellite pre-launch?

A

Physical loss or damage until the launch insurer takes over

Aggregation - insured items in one place where they are exposed to the same perils

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14
Q

What is cash in transit?

A

Non-marine but Cargo

Movement of money between locations

Risk prevention criteria

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15
Q

What is goods in transit?

A

Liability of the carrier

Loss/damage to goods and releasing cargo at the wrong destination/party

aka third party liability claims

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16
Q

What is war and strikes insurance? Including terrorism

A

Damage caused by abandoned mines or ancient weapons

Strikes and damage caused by terrorists or those acting from a political or religious motive

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17
Q

What is marine liability insurance?

A

‘Land’ based

Long-tail insurance

Injuring someone else or their property

Port authorities, shipbuilders repairs, marine owners

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18
Q

What is political risks (PRI)?

A

Investors, businesses to mitigate/manage risk arising from governmental actions

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19
Q

What is offshore energy insurance?

A

Upstream

Location and extraction of oil and gas from the sea bed

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20
Q

What are the three phases of offshore energy?

A

Exploration

Construction

Operational

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21
Q

What is onshore energy insurance?

A

Downstream - processing/refining elements

Midstream - pipelines - non-renewable

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22
Q

What is property insurance?

A

Physical damage to buildings e.g., office, industrial

Covers machinery, fixtures and fittings

Raw materials before go into manufacturing process before shipment

Reinstatement of buildings when claiming

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23
Q

What is stock insurance?

A

Damage at insured’s premises

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24
Q

What is theft insurance?

A

Forcible entry only

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25
What is glass insurance?
Also includes boarding up
26
What is pecuniary insurance?
Cover monetary loss from internal or external perils
27
What is money insurance?
Money and valuable documents e.g., tickets and vouchers
28
What is fidelity guarantee insurance?
Fraudulent acts committed during the policy period Discovery period - notified of a claim sometime after the event
29
What is construction insurance?
Contractors/sub-contractors under one policy to prevent gaps Maintenance period (period immediately after handover) - usually 12 months - 'snagging'
30
What is contractors all risks (CAR)?
Physical damage and liability cover Main contractor on behalf of sub-contractor
31
What is erection all risks (EAR)?
Contractor responsible for putting up/installing machinery or steel structures
32
What is cyber insurance?
Online systems and information E&O/PI/D&O - product fails Network security failures - BI, damage, data stolen Privacy breaches - customer data is stolen
33
What is business interruption (BI) insurance?
Physical loss to property which triggers shut down and loss of earnings
34
What is contingent BI?
Damage to external party that causes shut down, not damage to own property
35
What is advanced loss of profits (ALOP) and delay in start up (DSU)?
Costs of working overtime Covers penalty clauses in contracts if build overruns in time or finances
36
What is non-marine liability? And what is it also known as?
Aka Casualty Employers liability Compulsory in the UK If an employee becomes injured during their employment
37
What is public liability?
Members of the public visiting their premises, or employee to member of the public e.g., shops, restaurants, riding schools
38
What is professional liability?
Claim being made against a lawyers/doctor etc for incorrect advice or negligent activity
39
What is motor liability?
Third party for loss or damage to them or their property
40
What is general liability?
Purchased in addition to physical damage or construction
41
What is products liability?
Product causing physical damage to something or injury to someone Any party in the manufacture, sales, supply, distribution chain
42
What is bloodstock insurance?
Horses, racehorses, show jumpers
43
What is livestock insurance?
Cattle, sheep etc Death or illness of the animal including fertility
44
What is contingency insurance?
Event cancellation Weather related Prize indemnity Death and disgrace - advertising campaigns of 'bad' press celebs Over-redemption - offers and promotions going too far (costly)
45
What is personal accident, personal illness/sickness?
Not a policy of indemnity Schedule of benefits are paid
46
What is death in service?
Payment 2-4x salary
47
What is kidnap and ransom?
Demanding payment for release Medical expenses once released Family during the incident
48
What is malicious tamper, extortion, product recall?
Removing and replacing stock Brand loyalty Covers leaking info
49
What is intellectual property?
Protects work or inventions Trademarking Legal cost of defending IP
50
What is aviation insruance?
Does not include wear and tear Physical damage of aircraft and location Private pleasure fixed wing aircraft Commercial fixed wing - taking off, landing, flying Rotary aircraft (helicopters). gliders, microflights (hang gliders), hot air balloons, drones
51
What is aviation liabilities?
Passengers - whilst boarding, on, disembarking the plane Third party - baggage handlers Product related - illness from food, contaminated fuel, repairs
52
What is loss of licence in aviation?
Failed medical so loss of licence to pilot Provides replacement personal income
53
What is airport operators insurance?
Premise liability - duty free Products - fuel for aircrafts Hanger-keepers liability - maintenance/storage for clients
54
What are the different ways to buy reinsurance?
Single risk Certain classes Insurer's whole portfolio CAT losses
55
Should inwards premium be greater than and equal to the sum of claims, reinsurance and operating costs to be profitable?
Yes
56
What are the benefits of purchasing reinsurance?
Increase capacity - limits of RI, direct risks, greater share = placing/claims process is quicker Smoothing peaks and troughs - spreads the cost of large losses over a period of time, allows insurers to diversify into new COBs, protects the portfolio
57
Benefits of writing/selling reinsurance?
Access other geographical areas Access other COBs
58
What are three types of reinsurer?
Companies that do not write direct Syndicates Insurers who do insurance and reinsurance
59
What is a retrocedant?
Reinsurer purchasing reinsurance for themselves
60
Who buys reinsurance?
Insurers Reinsurers Captive insurers - takes risks only from its parent company or group Mutual insurers - group together and form a pool (e.g., P&I)
61
What does cession mean?
Share of risk passed to UWs

LM1 DB (7 decks)

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