Chapter 6

Question 1

What is commercial motor insurance?

Answer 1

Goods carrying vehicles, agricultural/forestry, passenger carrying and special types
Excludes driving other cars, personal accident and benefit

Question 2

What is covered under commercial property insurance?

Answer 2

• Fire and special perils
• All risks
• Theft
• Glass
• Money

Question 3

What is covered under property - fire and special perils?

Answer 3

Standard fire cover - fire (excluding explosion, earthquake), lightening and explosion (boiler/gas domestic purposes)
Special perils that. can be added include explosion, aircraft, riot and civil commission, malicious damage, earthquake, storm and flood, escape of water, sprinkler leakage, subsidence ground heave and landslip

Question 4

What are the standard exclusions under property - fire and special perils?

Answer 4

War, radioactive contamination, terrorism, NI, pollution, marine, more specifically insured, sonic bangs and cyber risks

Question 5

What is covered under property - all risks?

Answer 5

Everything not specifically excluded - all loss, damage or destruction of property insured is recoverable asa long as insured accidentally by insured

Question 6

What is excluded under property - all risks?

Answer 6

• Absolute: war, pollution, contamination, consequential loss
• Gradually operating: corrosion/rust and wind/rain
• Aspects of cover that can be written into the policy eg money or glass
• More appropriate to another class

Question 7

What is covered under property - theft?

Answer 7

Includes force and violence breaking in or our - removes cover for entry by key, trick or concealment
Extensions: breakage of glass, replacement locks, temp removal and full theft (no force or violence)

Question 8

What is excluded under property - theft?

Answer 8

Collusion, fire, cash, livestock
Priced using estimated maximum loss

Question 9

What is covered under property - glass?

Answer 9

Destruction or damage to all fixed glass including windows, doors, mirrored glass - extension to board up until glass replaced
All risks but stretching and chipping excluded

Question 10

What is covered under property - money?

Answer 10

Negotiability of money (ease turn into cash), difficult will have high limit
Depends on locality and time eg in safe or transit, business hour
Extension - personal accident, credit card
Exclusions - dishonesty employee not discovered 7 days, safe opened by key

Question 11

What is pecuniary insurance?

Answer 11

Involves direct financial loss
- Business interruption
- Legal expenses

Question 12

What is covered under BI insurance?

Answer 12

Actual or potential loss of earning and additional expenses incurred as result of material loss covered under property
Estimate max time income/business affected = indemnity period
Sum insured representing gross profit

Question 13

How do you calculate gross profit for BI insurance?

Answer 13

= (turnover + closing stock) - (opening stock + uninsured working expenses)

Question 14

What is covered under legal expenses?

Answer 14

Firms or companies costs arising from need to take action in courts or defend and ocrs of insured/employees time spent in court

Question 15

What is liability insurance?

Answer 15

Liable pay damages to another who suffers loss or damage arising from negligence
- EL
- Public liability
- Product liability
- Pollution liability
- Professional indemnity
- Directors and officers
- Errors and omissions
- Medical malpractice

Question 16

What is EL insurance?

Answer 16

Compulsory - covers boldly insure or disease sustained by employees in course of employment
Min limit £5m

Question 17

What is public liability insurance?

Answer 17

Legal liability to third parties for damages for bodily injury, death, disease, illness or loss/damage to property

Question 18

What is product liability insurance?

Answer 18

Consequential loss following actual injury or damage
Financial loss not covered unless accompanied by body injury / damage loss property

Question 19

What is pollution liability?

Answer 19

Pollution or contamination caused by sudden identifiable, unintended and unexpected incident which takes place in entire at specific moment in time and place during period of insurance

Question 20

What is professional indemnity insurance?

Answer 20

Injury, damage or financial loss to client or public as result of breach of professional duty, negligence, errors or omissions

Question 21

What is errors and omissions insurance?

Answer 21

Specialist form of PI, claims occur where broker has made a mistake

Question 22

What is cyber insurance?

Answer 22

Relatively new
First or third party, level of cover varies and depends on level of protection adopted by proposer