Commercial insurance products cover Flashcards
What are the three main types of commercial insurance?
- Property
- Pecuniary
- Liability
Name the 5 different types of property insurance cover that can be purchased.
- Fire and special perils
- All risks
- Theft
- Glass
- Money
Name the 2 different types of pecuniary insurance cover that can be purchased.
- Business interruption
- Legal expenses
Name the 4 different types of liability insurance cover that can be purchased.
- Employers’
- Public
- Products
- Professional indemnity
What three parts does the standard fire insurance policy (ABI recommended wording) consist of?
- Fire
- Lightning
- Explosion
The policy can be extended to cover damage to property caused be a wide variety of ‘special perils’.
What 6 special perils can be added to a standard fire policy?
- Explosion
- Aircraft
- Riot and civil commotion
- Malicious damage/vandalism
- Earthquake
- Subterranean fire
Name another 7 special perils which can be added to a standard fire policy.
- Spontaneous fermentation or heating
- Storm and flood
- Escape and water
- Impact (including vehicles)
- Sprinkler leakage
- Subsidence, heave and landslip
What are the 4 different types of standard fire policy exclusion?
- Absolute exclusions:
war, pollution, contamination, consequential loss, etc.
- Gradually operating exclusions:
e. g. corrosion/rust, wind/rain damage to property in the open. - Aspects of cover which can be written into the policy:
money, glass, subsidence, etc.
- Property or risks more appropriate to another class of business:
motor vehicles,
aircraft etc.
What is the main difference between cover provided under a commercial theft policy and the cover provided under the theft section of a household policy?
Forcible and violent entry or exit is required (as defined in the Theft Act 1968).
What common automatic extensions are covered under a theft policy?
- Breakage of glass and other damage (caused by thieves if building is not insured).
- Replacement of locks, if keys are lost/misplaced
- Theft or damage while contents are temporarily away from the premises.
- Index-linking.
- Extended or full theft (forcible and violent entry not included).
What common exclusions are made under a theft policy?
- Collusion
- Fire and explosion
- Cash, bank notes, etc.
- Livestock
What is EML?
EML = Estimated Maximum Loss.
The amount which is considered by the insurer to be an accurate reflection of the worst financial affect that the maximum forseeable loss would have.
(e.g. a thief would be selective).
What is a theft cover rating factor?
100% loss is not expected.
Therefore, underwriters apply different levels of rating for the types of goods at risk as some are more attractive than others.
What does glass insurance cover?
Destruction or damage to all fixed glass including:
- Windows
- Doors,
- Fanlights
- Showcases
- Mirrored glass
- Glazed partitions
What extensions can be included under a glass insurance policy?
Damage to storefront contents because of:
- Broken glazing and damage to washbasins and sanitary fittings in haidressing salons.
What is non-negotiable money?
Money which is difficult to convert in to a cash value (e.g. crossed cheques).
Limits of £250,000 or even £500,000 are not uncommon.
What is negotiable money?
Items which are readily convertible to their cash value (e.g bank or currency notes).
For cover purpses, negotiable items have limits.
What limits will specified in a policy schedule for negotiable money items?
- money in safe: £1,000 to £100,000 plus.
- in the insured’s premises out of working hours: up to, say, £250 or £500 limit.
- at the private residence of a director or employee: nominal limit - up to £250 or £500.
- Any other money limit (when premises is open for business): limits range from £2,000 to whatever is required.
What is an escort warranty?
An accompaniment condition stipulating how many people should accompany different size transits.
(typically, one person for every £2,500 or £3,000 in transit).
What does a money insurance policy cover?
Risks of loss or damage to or destruction of money on all risks basis.
Includes damage to safes or strong rooms caused by theft or attempted theft.
Can be extended to include personal accident/assault and credit cards (which aren’t covered by the standard policy).
What do ‘pecuniary insurances’ cover?
Financial losses when running a business.
What is insured under a business interruption (BI) policy?
Loss of profit following material damage.
It covers loss of earnings and additional expenses incurred while a business is unable to operate at full capacity due to a fire, or other insured incident.
When is business interruption (BI) cover required?
- When earnings may reduce or cease (e.g. during rebuilding).
- When some overheads will still need to be paid (e.g. staff salaries).
- When some costs may temporarily increase (e.g. renting alternative premises to keep the business going).
What is the ‘material damage proviso’ contained in a business interruption (BI) policy?
The requirement that property insurance is in force to cover the material damage claim, before the BI policy comes into operation.
This is necessary to avoid the possibility that the interruption period is extended because there is no insurance place to pay for repairs/rebuilding or replacement of stock/equipment.
