Chapter 4: Property Insurance Flashcards
What is the purpose of fire and special perils insurance?
To provide compensation to the insured in the event of damage to the insured property.
What events are covered by standard fire cover?
- Fire (excluding fire caused by explosion or from an underground heat source)
- Lightening
- Explosion - restricted to cover explosion of boilers or gas for domestic purposes only
What are the four types of optional perils of a standard fire policy?
- Chemical perils
- Social perils (riot, civil commotion, etc)
- Perils of nature (storm, earthquake, etc)
- Miscellaneous perils (aircraft, water escape)
What kinds of explosion are excluded under a standard fire policy?
- Own steam pressure vessels that are subject to inspection by statute - covered by engineering explosion policies.
- Pressure waves from sonic bangs
How does standard fire and special perils policy treat spontaneous fermentation or heating?
The property which ignites spontaneously is not covered, but any property which sets fire as a consequence is.
How does a standard fire and special perils policy cover storms?
- Flooding of any kind is not covered - this would be covered by a flood policy
- Excludes damage to any moveable structures in the open (i.e. gates)
What excess is usually applied to storm cover in a standard fire and special perils policy?
£100
How does a standard fire and special perils policy treat water escapement?
- Water from a leaking sprinkler system is not covered
- Water from an empty building is not covered
What does impact cover?
Cover for the vehicles of the insured when under the control of another (e.g. many forklifts in a factory)
May also cover own impact, there the insured is in control of the vehicle at the time
What does subsidence, ground heave and landslip usually cover?
Covers damage to the property when the ground moves underneath it.
What does subsidence, ground heave and landslip usually exclude?
- Damage to yards and car parks, roads, pavements, fences, walls, etc
- Normal settlement of new buildings, erosion by coast or river, dodgy design or workmanship
- Originating prior to inception date of the policy
- Demolition, construction or structural alteration to the property
What are the standard market exclusions of all property policies?
- Riot or civil commotion
- War risks
- Radioactive contamination
- Northern Ireland excluded perils
- Pollution
- Marine policies
- More specifically insured perils
What does all risks insurance cover?
Accidental loss or destruction of or damage to the property insured.
What does theft insurance cover?
Cover for loss of property or damage to a building during theft or attempted theft.
What might a restrictive theft policy exclude?
Entry using a key, a trick or hiding in the premises.
However, damage would be covered if it was done while exiting.
What are some of the optional extensions to a theft policy?
- Breakage of glass
- Replacement of locks
- Temporary removal or stock for cleaning or repair
- Index linking (i.e. ensuring that the sum insured is maintained in line with inflation)
What might a theft policy include but only through careful underwriting?
- Collusion (plotting between a thief and employee)
- Full theft (i.e. not requiring violent or forceable entry)
- Robbery and aggravated burglary (i.e. when premises are open for business)
Give some exclusions to a theft policy.
- Collusion
- Fire and explosion (should be covered by a fire policy)
- Cash and bank notes (should be covered by a money policy)
- Livestock (covered under a livestock policy)
What basis is theft usually insured on?
First-loss basis. The idea being that a thief will be unable to steal everything, so there’s no point in having the whole value of goods as the sum insured.
What does glass insurance cover?
- Glass
- Doors
- Fanlights
- Showcases
- Cost of boarding up windows
- Lettering on glass
What is excluded under a glass policy?
- Scratching
- Chipping
- Damage by explosion and fire (covered under a fire policy)
Give some extensions to glass policies.
- Cover for shopfront contents
- Damage to washbasins in hairdressing salons
What is covered under a money policy?
- Cash
- Currency notes
- Cheques
- Postal and money orders
- Stamps
- NI cards
- Luncheon vouchers
Which situations are covered under a money policy?
- Money in transit
- On the insured’s premises during business hours
- Bank’s safe
- Locked strongroom out of hours
- Out of hours not in a safe (only £500)
- In private residence of an employee
- In custody of collectors while in transit
- In custody of security company
Are safes covered in a money policy?
Yes, if damaged by theft or attempted theft.
Give some extensions to a money policy.
- Personal accident assault (where employees are exposed to assault)
- Credit cards -
What is excluded from a money policy?
- Error or omission in bookkeeping
- Employee dishonesty (not discovered in 7 days)
- Loss outside the UK
- Loss where a key has been used where kept on site out of hours
Give a typical limit for money in transit.
£5,000
What is a market exclusion?
An exclusion provided to all areas of all general insurance contracts.
