Chapter 8 - General insurance products

Question 1

Outline the seven features of liability insurance

Answer 1

1. Provides indemnity where the insured, due to some form of negligence, is legally liable to pay compensation to some third party
2. The legal fees associated with the claim are usually also covered
3. Illegal acts of negligence will invalidate the claim and no payment will be made by the insurer
4. There may be an upper limit and/or excess amount applied to the claim
5. On the occurrence of a claim the cover may be cancelled, or a reinstatement premium or higher premium might be required for the cover to continue
6. The claims are usually medium to long tailed and are likely to be real in nature
7. International or national laws apply, depending on the type of cover

Question 2

List the four generic groups of general insurance products

Answer 2

1. Liability
2. Property damage
3. Financial loss
4. Fixed benefit

Question 3

List the products covered under Liability Insurance

Answer 3

1. Employer’s
2. Motor third party
3. Public
4. Product
5. Professional indemnity

Question 4

List the products covered under Property Damage Insurance

Answer 4

MR CALM

1. Movable products
2. Residential buildings
3. Commercial buildings
4. Aircraft
5. Land vehicles
6. Marine craft

Question 5

List the products covered under Financial Loss Insurance

Answer 5

1. Pecuniary loss
2. Fidelity guarantee
3. Business interruption
4. Cyber security

Question 6

List the products covered under Fixed Benefit Insurance

Answer 6

1. Personal accident
2. Health
3. Unemployment

Question 7

List the perils covered by employer’s liability insurance

Answer 7

1. Accidents caused by negligent actions by the employer
2. Exposure to harmful substances
3. Exposure to harmful working conditions

Question 8

List the perils covered by motor third party liability insurance

Answer 8

1. Motor accidents caused by the insured

Question 9

List the perils covered by product liability insurance

Answer 9

1. Faulty product design, manufacturing or packaging
2. Misleading or incorrect instructions

Question 10

List the perils covered by buildings insurance

Answer 10

LEFT SF

1. Lightning
2. Explosion
3. Fire
4. Theft
5. Storm
6. Flood

Question 11

List the perils covered by marine hull cover

Answer 11

1. Perils of the sea
2. Fire
3. Explosion
4. Jettison
5. Piracy

Question 12

List the perils covered by pecuniary loss insurance

Answer 12

1. Bad debts
2. Third party failure

Question 13

List the perils covered by fidelity guarantee insurance

Answer 13

1. Dishonest employee actions
2. Fraud
3. Embezzlement

Question 14

List the perils covered by business interruption insurance

Answer 14

1. Being unable to conduct business

Question 15

What is liability insurance?

Answer 15

Provides indemnity where the insured, owing to some form of negligence, is legally liable to pay compensation to a third party. Any legal expenses relating to such liability are usually also covered. An illegal act of negligence will often invalidate the cover

Question 16

What is employers’ liability?

Answer 16

This insurance indemnifies the insured against the legal liability to compensate an employee or their estate for accidental bodily injury, disease or death suffered, owing to the negligence of the employer, in the course of employment

perils also include exposure to harmful substances or harmful working conditions

Question 17

What is motor third party liability?

Answer 17

indemnifies the owner of a motor vehicle against compensation payable to third parties for death, personal injury or damage to their property.

Question 18

What is public liability?

Answer 18

indemnified against legal liability for the death of, or bodily imjury to, a third party or for damage to property belonging to a third party, other than those liabilities covered by other liabliity insurance

Question 19

What is product liability?

Answer 19

it indemnifies the insured against legal liability for the death of, or bodily injury to, a third party or for damage to property belonging to a third party, which results from a product fault

Question 20

What is professional indemnity?

Answer 20

the insured is indemnified against legal liability resulting from negligence in the provision of a service