Chapter 5- Pecuinary Flashcards
What is pecuniary insurance concerned with
Intangibles such as income, revenue or value
What is the basis purposes of legal expenses insurance
To provide indemnity for costs arising out of the need to seek legal advise or to pursue or defend a civil action
What are the two standard policy covers
- Group legal benefit policies
2. Commercial legal protection policies
Under group legal benefit policies what is employment cover
Defence of any claim brought against a member in the course of their employment
Defence and compensation awards resulting from specified legislation
Costs of claiming for compensation arising out of members employment eg wrongful dismissal
Under group legal benefit policies what are the 4 sections of cover
- Employment cover
- Personal cover
4, motor cover
- Conveyancing cover
What are commercial legal protection policies
Designed to cover firms or companies in their capacity as employers, manufacturers; property owners etc
What are the 5 main sections of commercial legal protection policies
- Employment cover- defending an action by an employee against the firm
- Criminal prosecution defence cover- defences an action brought against the company usually under health and safe ty at work legislation
3 property disputes cover
- Motor cover
- Patents, registered designs, copyright and trademarks cover
What are the 4 optional extensions for commercial legal protection policies
- Defending libel and slander charges
- Involvement in public enquiries
3, investigations by professional bodies
- Taxation proceedings
What are the limitations for legal expenses cover
No cover where legal action is pursued against advice
What are the basic features of BI
The monetary amount that needs to be insured and the time the interruption will affect the business
What is the turnover in relation to BI
Turnover is the total income arising from the activities of the business
How is the turnover broken down in regards to BI
Costs are divided between those that vary in direct proportion of the turnover and those that not vary in this way
What two items may result in a loss to the insured under BI
Net profit and fixed charges
What terms do insureds use for the addition of net profit and standing charges
‘Gross profit’
What is the ‘difference basis of cover’ under BI
Works by deducting the uninsured working expenses (the variable charges) from the turnover.
What are the two basis of fixing sums insured under business interruption
1- taking the projected turnover for the forthcoming years and assuming a worst case scenario
2- declaration linked- declare figures for the forthcoming then a one third uplift is automatically taken into account
What is increase cost of working cover
Where certain expenses will increase following loss or damage
What is a material damage warranty
A policy covering the physical damage must be in place for BI to be covered
Why does material damage warranties not always apply to engineering business interruption
Insurer knows that there are fund for completing the rebuild
Insurer will obtain the benefit of the warranties that may apply to the material damage cover
What are the three most common business interruption policies
Fire and special perils
All risks
Engineering
What are the standard perils for a business interruption policy
Same as covers under a material damage policy but can be extended to include
The explosion of ANY boilers on the premises
What are the special perils for a business interruption policy
Relating to engineering cover:
Explosion and collapse of steam pipes
Explosion of vessels
Collapse or boilers
Overheating or tubes
Overheating of boilers
What are the extensions to an all risks business interruption policy
- Specified suppliers
- Unspecified suppliers
- Specified customers
- Transit
5, prevention or access s
6, public utilities
- Notifiable disease, vermin, defective sanitary arrangements
What are the two perils covered under an engineering BI Policy
Failure of the public supply of gas, electricity etc
Sudden and unforeseen damage from an accidental cause
What 4 things are excluded on an engineering BI policy
Perils covered by the standard fire and special perils policy
General market exclusions (war etc)
A scheme which rations supplies
Deliberate act of a supply authority
What, in one sentence, is the basic purpose of legal expenses insurance?
Legal expenses insurance provides indemnity for costs arising out of the need to seek legal advice or to pursue or defend a civil action
What are the two main types of policy cover available in respect of legal expenses insurance?
The two main types of cover are group legal benefit policies and commercial legal protection policies
What optional extensions are available to an insured when taking out legal exp need insurance?
Libel and slander protection
Cover against the costs of involvement in public enquiries
Cover again the cost of investigations by professional bodies
Cover against the cost of taxation proceedings
What is the purpose of business interruption insurance?
Business interruption insurance covers the actual or potential loss of earnings (‘gross profit’) and additional expenses incurred as a result of material loss
In what way do the standard perils covered by the business interruption policy differ from the standard perils in the material damage policy?
The business interruption policy cover explosion of both domestic and non-domestic boilers, whereas the material damage policy covers explosion of domestic boilers only
Under a typical legal expenses policy, what limit of cover, if any, usually applies within the period of cover?
A) cover is usually unlimited
B) overall cover is usually limited but there is not further limit per claim
C) overall cover is usually unlimited but that is a limit per claim
D) overall cover is usually limited and there is also a limit per claim
C
Overall cover is usually unlined, but there is a limit per claim
What are two dimensions of business interruption cover?
- the monetary amount that needs to be insured
- the time that the interruption will affect the business
What is the effect of the material damage warranty in relation to the inclusion of non-domestic boilers or economisers as a policy extension to the standard business interruption policy?
Since the material damage warranty applies, it is essential, if the insured has non-domestic boilers or economisers, that they have material damage cover against explosion in respect of these items. Otherwise they will lose the benefit of the additional cover. This applies if cover is required for explosion damaged from neighbouring premises
