Chapter 6 - Liability Insurance

Question 1

What is the minimum legislation by which Emoloyers’ liability insurance is made compulsory and the minimum limit of indemnity permitted?

Answer 1

The Employers’ Liability ( Compulsory Insurance) Act 1969 and The Employers’ Liability ( Compulsory Insurance) Regulations 1998.

The minimum limit is £5 million.

Question 2

What cover is given under an Employers’ Liability policy?

Answer 2

Legal libaility for damages ( plus costs and expenses incurred) if any employee sustains bodily injury, disease, illness or death arising out of and in the course of employment by the insured

Question 3

How may cover under an Employers’ Liability policy be limited?

Answer 3

By :

• Restricting the definition of ‘business’
• Excluding certain kinds of work or
• Excluding certain machines and/or processes.

Question 4

What monetary limit do most insurers impose on Employers’ Liability policies?

Answer 4

£10 million

Question 5

In respect of public liability insurance what are the definitions of ‘injury’ and ‘damage’?

Answer 5

Injury = bodily injury to or illness, disease or death of any person.

Damage = loss of or physical damage to property.

Question 6

What are the two most common extensions to a public liability policy?

Answer 6

Tenants liability and defective premises

Question 7

What is the basic purpose of product liability insurance

Answer 7

Covers legal liability for bodily injury or property damage caused by products or goods

Question 8

What is the purpose of directors and officers insurance?

Answer 8

Director and officers insurance is designed to cover the legal libaility of individuals within a company who may be personally liable for breaches of duty and so incur financial liabilities.

Question 9

What is the purpose of professional indemnity insurance?

Answer 9

Professional indemnity insurance covers the legal libaility of members of the professions for injury, damage,or financial loss to clients / the public as a result of breach of professional duty or negligent acts, errors or omissions.

Question 10

What cover is provided by an extended warranty policy?

Answer 10

An extended warranty policy will cover free repairs following electrical and mechanical defects for a period of up to 5 years.