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IF3 > Chapter 6 > Flashcards

Chapter 6 Flashcards

1
Q

In property insurance, what are the 3 main parts of standard fire cover?

A
  1. Fire
  2. Lightening
  3. Explosion
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2
Q

What are some special perils in property insurance? (Name 2)

A

Riot, explosion, aircraft, subterranean fire, flood, storm, escape of water, sprinkler leak, subsidence.

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3
Q

What does the riot compensation act now limit and what caused this shift?

A

The amount that can be recovered from the police.

The 2011 riots in the UK.

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4
Q

What are the 2 main reasons, certain types of damage might be excluded in property insurance.

A

The damage was caused by a fundamental risk

Because the risk should be / is better insured under an other type of insurance.

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5
Q

Name 2 common exclusions in property insurance.

A

War, radiation, terrorism (covered separately by Pool Re), NI, pollution, sonic bangs…

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6
Q

Who might insurers / brokers approach if an unusual peril needs covering in property insurance.

A

Lloyds of London.

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7
Q

Does ‘all risks’ mean everything is covered?

A

No - it covers everything not specifically excluded and accidental.

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8
Q

What is a gradually operating exclusion?

A

Damage that happens slowly over time, like rust or corrosion.

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9
Q

How is insurers definition of theft different to the legal definition and how does this affect cover?

A

Insurers include a phrase which means that theft must include force or violence. Essentially, it’s not a theft if there is not a break in.

If a theft takes things without violence, it wouldn’t be covered.

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10
Q

If a thief took a key by force and then entered a house using that key (so, there was no break in) would this be covered?

A

Yes - as the key was obtained by force

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11
Q

Name 2 common exclusions in theft insurance.

And what might an insurer insist on for smaller risks?

A

Collusion, fire, cash and livestock.

An intruder alarm warranty.

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12
Q

What is an EML?

A

Estimated maximum loss.

Thief’s won’t usually take everything so insurers usually calculate the value of the worse case scenario and insure that amount.

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13
Q

What would have a higher rate - general contents or target good?

A

Target goods.

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14
Q

What kind of business might want glass cover?

A

A high street shop.

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15
Q

Why would fire be excluded under glass cover?

A

Because this peril will be covered elsewhere. (Under a standard fire policy)

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16
Q

Why might a business want money covered?

A

Often shops have a lot cash and cheques on the premises. - it is a risk to have this so they may want to take out insurance to protect against loss of money.

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17
Q

What is non-negotiable money?

A

Money which is difficult to convert to cash value like crossed cheques.

Negotiable money would be something like bank notes.

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18
Q

What is an escort warranty in money insurance?

A

A promise to have a number of able-bodied people present when large amount of money is in transit.

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19
Q

What is pecuniary insurance?

A

It only relates to money / direct financial loss.

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20
Q

What is BI insurance?

A

It covers loss of earnings and additional expenses incurred as the result of a material loss.

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21
Q

What is an indemnity period in BI insurance?

A

The maximum period of time the income of a business could be affected as the result of damage caused by for example, a fire.

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22
Q

Can an indemnity period in BI cover exceed a policy period?

A

Yes!

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23
Q

How is gross profit calculated?

A

Gross profit (Turnover + closing stock) - (opening stock + uninsured working expenses)

24
Q

Give 2 examples of an uninsured working expense

A

Electricity, bills, raw materials.

25
Q

What is a material damage proviso?

A

A proviso in BI insurance which requires a property policy covering physical damage for an incident before a BI policy comes into operation.

26
Q

Why do BI insurers want a material damage proviso?

A

Because repairs will be made quicker and the payments needed under the BI policy will be lower as result.

27
Q

What is additional cost of working also known as?

A

Increased cost of working.

28
Q

What type of company is ICOW policy designed for.

A

It’s designed for a company who wouldn’t experience large scale losses and would be able to get back on their feet fairly quickly.

29
Q

What is the main difference between an ICOW extension and a stand-alone policy?

A

A stand alone policy would cover uneconomic losses. (The insured can allocate the money as they wish.)

30
Q

What does a legal expenses policy cover?

A

Costs arising out of the need to go to court or defend actions brought against the insured.

31
Q

Simply, what does a liability policies cover?

A

Third party injury/death/illness or property damage.

32
Q

Why is negligence key to liability?

A

Without negligence in some respect, claims or liability would not arise.

33
Q

What did the EL Act of 1969 require by law?

A

Every employers in UK to hold EL insurance.

34
Q

What is the minimum limit for EL cover?

A

£5 million

35
Q

Do employers have to display their EL certificates?

A

They used to have to. Now they don’t have to as long as an electronic copy is easily accessible to all employees.

36
Q

How long do EL certs have to be kept for?

A

40 years.

37
Q

Would an EL policy cover an employee getting hit by a hailstone on the way to work?

A

No because there hadn’t been negligence.

38
Q

What does the removal of strict liability mean?

A

Negligence has to be proven when a claimant brings forth a claim.

39
Q

What happens in cases where liability is not clear?

A

Liability usually swings in favour of the employee.

40
Q

Would a work experience student be covered under an EL policy?

A

Yes.

41
Q

Can EL cover diseases found years after the policy has expired?

A

Yes - hence asbestos claims.

42
Q

What does PL cover?

A

Liability to TP against injury, death, illness or property damage.

43
Q

Give an example of a consequential loss.

A

Paying for a hire car for the TP.

44
Q

Name 2 common exclusions under a PL policy.

A

Injury to employees, product liability, defective workmanship, deliberate acts, war risks, radioactive risks.

45
Q

What does product liability insurance cover?

A

Bodily injury or property damage which arises out of goods produced, repaired or manufactured.

46
Q

Is pollution insurance usually any one claim or in aggregate.

A

In the aggregate.

47
Q

What does PI insurance cover?

A

An injury, damage or loss as the result of breach of professional duty. E.g., giving the wrong advice.

48
Q

What does a claims made basis mean and what type of insurance is it common in?

A

Claims are covered during the period of insurance rather than when the loss occurred. PI

49
Q

What is a retroactive date?

A

The first date from which you have held uninterrupted insurance.

50
Q

Can you move insurer and still have «uninterrupted cover «

A

Yes- cover doesn’t have to be with the same insurer.

51
Q

What does D&O insurance cover?

A

Personal liability for directors and offers for financial loss suffered by TP’s.

52
Q

What is an E&O policy and who is it for?

A

It is for errors and omissions Eg., when the policy doesn’t do what the broker says it would do.

Brokers or intermediaries are required to have this insurance.

53
Q

How are limits set in E&O policies?

A

The size of broker.

54
Q

What does medical malpractice insurance cover and who is it for?

A

When medical professionals failed to use reasonable care e.g., a patient didn’t recover as quickly as they expected. It’s for doctors and NHS trusts.

55
Q

What 3 main things does cyber insurance cover?

A

Damage to physical property, pecuniary loss following interruption, loss of TP data.

56
Q

What does 1st party and 3rd party losses relate to in cyber insurance?

A

1st party relates to losses the insured directly experienced. 3rd party relates to the duty of care to third parties and their data/property.

57
Q

Does Pool RE include cyber?

A

It does now to a limited degree.

IF3 (11 decks)

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