Gadget, travel, extended warranty, commercial property and pecuniary insurance Flashcards
Gadget insurance
Some insurers have created new gadget insurance products, whereby it is possible to insure specific gadget items against loss, damage or theft, rather
than having them covered by a traditional household policy.
Some of these policies ALSO provide travel insurance cover as an add on,
or even household cover specifically including gadgets.
True
Gadget insurance
Bicycles can ALSO be covered.
True
Gadget insurance
Cover can be arranged on a month by month basis, with different gadgets swapped in and out of cover.
True
Gadget insurance
The popularity of such policies will grow, especially with the younger generations.
True
Gadget insurance
The polices can be bespoke but the main features and restrictions for gadget insurance can be summarised:
(Gadget insurance)
- Mobile phones that can’t be repaired are USUALLY replaced rather than compensated by cash payment, as a fraud prevention measure.
- Mobile phones normally need to be new or refurbished in the UK and second hand phones are OFTEN excluded.
- Cover can extend to include loss or damage if the phone is with a family member.
Exclusions (Gadget insurance):
the phone;
Gradual deterioration of performance
if left unattended outside the home,
Loss or theft from a car, unless locked away out of sight
Loss of data ,
Peripheral extras such as chargers, cases and other accessories .
Another gadget worthy of a mention is a personal drone, something which is becoming more popular as the cost of such items reduces.
True
Gadget insurance
Drone insurance provides cover against damage to a drone, or against claims made by someone whose property the drone may accidentally damage.
True
Gadget insurance
If control of the drone was lost and it fell on to someone’s car, it would be covered for both the damage to the drone and for the claim from the driver.
True
Gadget insurance
Some home insurance policies may include gadget cover or personal possessions cover, both of which could protect a drone or other gadget at home or away from the home.
True
Gadget insurance
However, not all home policies cover drones, so it may be worth investing in a specific drone insurance policy.
True
Gadget insurance= Drone Insurance
There are two ways of paying for drone insurance :
The traditional, annual policy and
a new method is known as pay-as-you-fly (PAFL).
The traditional annual policy splits payments into monthly instalments,
True
Gadget insurance= Drone Insurance
Whereas the PAFL model charges for a specific use, or, alternatively a period, such as a week at a time.
True
Gadget insurance= Drone Insurance
Travel insurance , what risks can you think of that are associated with travelling?
A trip may be cancelled because of sickness or delayed by an industrial dispute.
Connections may be missed because of late running public transport.
Luggage may be lost, damaged or delayed.
The traveler may become ill or suffer an accident while away.
Travel insurance is designed to cover such risks.
Standard travel insurance policy covers?
Most travel policies cover the following:
Personal accident benefits: USUALLY between £10,000–£25,000 for death, loss of eyes or limbs, or permanent total disablement.
Hazardous activities are GENERALLY excluded but can be underwritten for an ADDITIONAL PREMIUM
Medical and associated expenses,
e.g. the cost of treatment, being brought home or having to stay away longer than planned: USUALLY up to £1m.
Delayed baggage.
Hospital cash benefits,
i.e. a daily amount of cash whilst the insured is in hospital.
Loss of deposits, i.e. if the holiday is cancelled due to necessary and unavoidable holiday cancellation.
Loss of, or damage to, baggage, personal effects and money.
Personal liability for accidental injury to third parties or damage to their property.
Travel interruption, that is the extra costs involved when public transport fails to deliver you on time to make your connection or take the trip booked.
Travel delay.
Optional extensions? (Travel Insurance)
- Failure of tour organiser;
- Hazardous activities, such as quad biking, jet skiing etc.
- Lack of services or amenities at the hotel because of industrial action lasting at least 48 hours;
- Loss of passport;
- Legal expenses associated with pursuing claims for compensation for death or injury;
What are general exclusions of Travel insurance policy?
Such as:
Confiscated luggage,
Damage to fragile objects etc.
Pregnancy and childbirth,
Physical or mental defect,
Suicide…
How are policies sold? (Travel Insurance)
Can be sold to individuals or groups and
may be sold on a ‘single trip’ basis, a ‘multiple trip’ basis or an ‘annual basis’.
Travel Insurance covers for specific countries, regions or for any location in the world.
True
In Pet insurance; If your pet is like one of the family you will want to make sure they are protected if they fall ill or go missing.
True
Pet insurance is available to cover:
- dogs;
- cats;
- rabbits;
- horses;
- birds
- exotic pets (for example, snakes, turtles and lizards).
Most policies on the market cover only dogs and cats
True
Pet Insurance
A specialist insurer may be required for any other animal.
True
Pet Insurance
What are the Main features of cover of pet insurance products ?
Boarding fees , Death or Lost and found cover , Foreign travel, Liability (dogs only) , Vets fees,
Vets fees in pet insurance covers?
- Accidental injury.
- Alternative treatments.
- Dental treatments.
- Illness.
- Physiotherapy.
Death or Lost and found cover in pet insurance covers?
- Theft.
* Straying.
Liability (dogs only) in pet insurance covers?
- Damage to third party property.
* Injury or death of a third party.
Boarding fees in pet insurance covers?
• The cost of kennel, cattery or other boarding fees if you have to go into hospital.
Some insurers ALSO pay out if a friend or family member looks after your pet.
True
Pet Insurance= Boarding fees
Most policies pay out once you have been in hospital for more than four days.
True
Pet Insurance= Boarding fees
Covers for the Foreign travel in pet insurance ?
True
There are four main types of pet insurance and each offer a different level of cover for vet treatment:
- Accident only policies.
- Time limited policies.
- Maximum benefit policies.
- Lifetime policies.
Accident only policies a type of pet insurance, covering?
The most basic policy and only covers pet for treatment that is needed following an accidental injury.
It may ALSO offer a lower maximum claim limit for vet fees than other policies, but it will be the cheapest to buy.
Time limited policies, a type of pet insurance, covering?
This type of policy lets insured pet owner claim for a specific condition for a set period of time, USUALLY 12 months.
What happens when this period is up?
Time limited policies= Pet Insurance
The insurer will not pay out for that condition and the insured pet owner need to pay for any ongoing treatment.
Maximum benefit policies, a type of pet insurance, covering?
Covers a condition up to a set limit, for example £5,000.
Once you have claimed up to this limit your insurer will not pay out for any further claims for the same condition.
True
Maximum benefit policies= Pet Insurance
Lifetime policies, a type of pet insurance, covering?
You will be able to claim up to a set amount, for example £10,000, for any condition every year of your pet’s life.
Lifetime policies are USUALLY the most expensive option, but offer the most comprehensive cover.
The following are rating factors for pet insurance:
- The age of the pet.
- Cost of the pet.
- Pre-existing medical conditions.
- Type of pet.
The age of the pet?
Older pets are more likely to fall ill, so their insurance costs more.
Cost of the pet?
Pedigree pets cost more to cover than crossbreeds, because they are more expensive to buy and can suffer from hereditary conditions.
Pre-existing medical conditions?
If the pet has any medical issues, most insurers will not cover them, and those that do will charge more to cover the risk.
Type of pet?
For example, small pets like rabbits are cheaper to cover on average than dogs and cats because they cost less to buy and their vet fees will be lower.
Extended warranties (and breakdown insurance)
Purchasing a new washing machine, it is probable that the manufacturer will provide a guarantee (or warranty), which will USUALLY last for twelve months.
It is, however, possible to buy an extended policy to extend this period for two, three or even five years.
True
Extended Warranty Insurance
Extended warranties, issued by insurers and sold by some large authorised retailers, cover the cost of repairs following electrical and mechanical defects.
True
Extended Warranty Insurance
Policies are available to cover all an insured’s electrical products.
True
Extended Warranty Insurance
There is USUALLY a condition that the repairs must be carried out by an authorised repairer.
True
Extended Warranty Insurance
Exclusions to an extended warranty policy:
- the cost of repairs to bulbs, aerials, external wires, knobs, handles, driving belts etc.;
- deliberate damage by the insured.
- negligent handling and/or failure to comply with manufacturer’s instructions;
- risks normally covered by a household contents policy;
• war etc.;
What is Fire and special perils insurance?
Commercial property insurance:
The insurance market has a ‘Standard Fire Policy’ (using a form of wording recommended by the Association of British Insurers) as the basis for its wordings.
What does the policy cover under standard cover?
Provides standard cover, and then ‘extra’ perils (known as special perils) can be added.
It is now common to issue policies covering fire and special perils as standard.
True
Commercial Property Insurance= Fire and special perils insurance
Standard fire cover is made up of three parts:
- Fire (excluding explosion resulting from fire, earthquake or subterranean fire, and the object’s own
spontaneous fermentation or heating) - Lightning
- Explosion (restricted to explosion of boilers or gas used for domestic purposes only)
The special perils (each is preceded by ‘damage caused to the property by…’)
• crashing of an aircraft or other aerial device, other than that resulting from fire
(excluding sonic bangs);
- earthquake;
- escape of water (commonly referred to as ‘burst pipes’ cover);
- explosion: namely those emanating from chemical reactions producing suddenly expanding gas;
- flood;
- impact by vehicles or animals belonging to or controlled by a third party (though this can be extended to apply to those owned or controlled by the insured or its employees);
- malicious damage;
- riot and civil commotion, either for fire caused by riot and civil commotion or for any damage so caused;
- sprinkler leakage;
- spontaneous fermentation or heating of the property itself;
- storm, i.e. damage caused by some form of atmospheric disturbance;
- subsidence, ground heave and landslip (with special exclusions).
- subterranean fire;
Standard market exclusions:
Commercial Property Insurance= Fire and special perils insurance
‘Consequential loss’ exclusion, i.e. loss following and consequent upon a loss proximately caused by an insured peril.
Marine policies;
‘More specifically insured’ clauses (i.e. where there is a more specific policy in force covering the peril in question);
Pollution or contamination;
Radioactive contamination/explosive nuclear assemblies;
War risks;
‘All risks’ insurance:
It was GENERALLY realised that uncertainty of loss is not restricted to events brought about by fire and special perils.
Neither limited to events occurring on or about the insured’s premises.
True
Commercial Property Insurance= Fire and special perils insurance= All Risks
The Association of British Insurers (ABI) therefore has developed a recommended wording for ‘all risks’ policies.
True
Commercial Property Insurance= Fire and special perils insurance= All Risks
This adds special perils to a basic fire policy and then adds the ‘all risks’ element, with its exclusions.
True
Commercial Property Insurance= Fire and special perils insurance= All Risks
In essence, all loss or destruction of or damage to the property insured is recoverable as long as:
- it has occurred accidentally in respect of the insured; and
- the cause is not specifically excluded.
There are no optional extensions: everything is covered, unless specifically excluded.
True
Commercial Property Insurance= Fire and special perils insurance= All Risks
The exclusions of (Commercial Property Insurance= Fire and special perils insurance= All Risks)
can be divided into four groups as follows.
- Absolute exclusions
- Gradually operating exclusions
- Aspects of cover which can be written into the policy for ADDITIONAL PREMIUM
- Property or risks more appropriate to another class of business
Absolute exclusions?
Exclusion in the Commercial Property Insurance= Fire and special perils insurance= All Risks , such as:
Consequential loss,
Contamination,
Pollution and
War.
Gradually operating exclusions such as??
e.g. corrosion or rust, wind or rain damage to property in the open.
Aspects of cover which can be written into the policy for additional premium??
Exclusion in the Commercial Property Insurance= Fire and special perils insurance= All Risks:
e.g. money, glass and subsidence
Property or risks more appropriate to another class of business??
Exclusion in the Commercial Property Insurance= Fire and special perils insurance= All Risks:
e.g. motor vehicles or aircraft
Theft insurance:
There is no standard wording for policies of theft insurance.
True
What is theft definition under the Theft Act 1968?
“A person is guilty of theft if they dishonestly take property belonging to another, with the intention of permanently depriving the other of it”.
Insurers add a phrase saying that it must include force and violence, either in breaking in or out of the insured premises.
True
Theft Insurance
This means that entry by a key, a trick or concealment on the premises while open, and leaving without forcible exit would not be covered.
True
Theft Insurance
If a key were obtained by threat or force, cover would normally apply.
True
Theft Insurance
Common extensions for Theft Insurance are as follows.
- Breakage of glass (if not insured specifically elsewhere).
- Index linking the sum insured (with premium adjustment at the end of the policy period).
- Extended or full theft: i.e. the ‘forcible and violent entry’ phrase is deleted.
- Replacement of locks.
- Temporary removal.
Exclusions for Theft Insurance??
- Cash, bank notes etc. (this should be covered under a money policy).
- Collusion, e.g. plotting and agreement between the thief and employee(s), though this can be included, subject to the underwriter’s agreement and an ADDITIONAL PREMIUM.
- Fire and explosion (insured under the standard fire policy).
- Livestock (again, these will be more specifically insured elsewhere)
Cover is OFTEN sought on a first loss basis,
True
Theft Insurance
For an amount that is less than the total value of the subject matter of the policy.
True
Theft Insurance
A first loss basis in theft insurance, why ??
This is because the insured recognises that a thief would be selective in what they steal.
A small premium discount would USUALLY be given.
True
Theft Insurance
Glass insurance standard policy?
The standard policy covers destruction or damage to all fixed glass, including windows, doors, fanlights, showcases, mirrored glass and glazed partitions.
It USUALLY includes an extension to cover the cost of boarding up damaged glass until it can be replaced.
True
Glass Insurance
Cover is ‘all risks’, but scratching or chipping is USUALLY excluded.
True
Glass Insurance
For an ADDITIONAL PREMIUM, It may be extended,
to include
damage to storefront contents because of broken glazing, and
damage to washbasins and sanitary fittings in hairdressing salons.
Damage by fire, lightning and explosion is GENERALLY excluded in (Glass Insurance) as these perils are covered under :.
A standard fire policy
An excess is USUALLY applied to avoid small claims.
True
Glass Insurance
The definition of money under a money insurance policy includes?
Bank and Currency notes,
Cash, Coins, Cheques,
Postal and money orders,
and current postage stamps.
A policy covers the risk of loss or damage to or destruction of money on an ‘all risks’ basis.
True
Money Insurance policy
It includes damage to safes or strong rooms caused by theft or attempted theft and provides cover against loss of cash or currency while in transit due to accident.
True
Money Insurance policy
The insurer can ALSO pay for the cost of replacement or repair of a safe or strong room in the event of theft or burglary.
True
Money Insurance policy
(Money Insurance policy)
It can be extended to include:
- personal accident due to assault; and
* credit cards (which are not covered by a standard money policy).
(Money Insurance policy)
Specific exclusions are losses due to:
- error or omissions in accounting and book-keeping;
- the dishonesty of an employee that is not discovered within seven days;
- damage arising outside the UK, Isle of Man or the Channel Islands; and
- a safe or strong room being opened by a key left on the premises whilst closed for business.
Pecuniary insurance=Legal expenses insurance
These policies cover the costs to firms or companies arising out of the need to take action in the courts or to defend an action brought against them.
Pecuniary insurance=Legal expenses insurance,
ALSO cover the cost of the insured’s and their employees’ time spent in court.
True
Pecuniary insurance=Legal expenses insurance
A standard policy will be subject to a limit of £25,000 to £100,000.
True
Pecuniary insurance=Legal expenses insurance
It typically consists of five main sections as follows.
- Employment cover
- Criminal prosecution defence cover
- Property disputes cover
- Motor cover
- Patents Covers the cost of defending the insured against an action for breach
Employment cover in
(Pecuniary insurance=Legal expenses insurance) ??
Covers the cost of defending unfair dismissal or racial or sexual discrimination claims plus any awards made against the insured if unsuccessful.
Criminal prosecution defence cover in
((Pecuniary insurance=Legal expenses insurance)) ??
Covers the cost of defending an action against the insured, USUALLY under Health and Safety legislation.
Fines are not covered as this would be against the public interest.
True
Pecuniary insurance=Legal expenses insurance
Property disputes cover in
((Pecuniary insurance=Legal expenses insurance)) ??
Covers the cost of representation for legal disputes with a neighbouring property owner or regarding purchase or sale of the insured property..
Motor cover in
((Pecuniary insurance=Legal expenses insurance)) ??
Covers legal costs relating to motor vehicles,
e.g.
defending motor prosecutions.
personal injury,
uninsured loss recovery
In Pecuniary , Legal expenses policy, the Patents Covers the cost of defending the insured against an action for breach of??
copyright and trademarks and registered designs, and associated damages…
Legal expenses insurance is ALSO available to individuals and is OFTEN offered as an optional extension to a household insurance policy.
True
Sometimes sold alongside a motor policy where it will indemnify the insured for the cost of defending a claim or pursuing uninsured losses.
True
Pecuniary insurance=Legal expenses insurance
In all cases the costs and expenses must have been approved by the insurer before the action starts.
True
Pecuniary insurance=Legal expenses insurance
The cover does not extend to meet the cost of any fines imposed or the defence of any deliberate criminal acts committed by the insured.
True
Pecuniary insurance=Legal expenses insurance
ALSO, claims made between husband and wife are GENERALLY excluded.
True
Pecuniary insurance=Legal expenses insurance
What does Business interruption insurance cover?
A business for the actual or potential loss of earnings and the additional expenses incurred as a result of a material loss covered under property insurance.
Why do you think business interruption insurance could be required?
Property insurance only covers material loss following damage or destruction but that damage may have consequences for the insured’s ability to carry on its business, resulting in a financial loss.
The consequences of physical damage (material loss) to an insured’s business premises are as follows:
- Earnings may reduce or stop altogether following property damage.
- Certain overheads will still need to be paid at their full level.
- There may be increases in certain costs just to keep the business operating.
All these are covered by business interruption insurance, as well as the cost of paying the charges of accountants employed to help present the claim.
True
Business Interruption Insurance
Other than the business interruption cover, who else is paid for the charges to help present a claim?
Accountants
Accountants are paid for the charges to help present a claim other than the business interruption cover?
True
Business Interruption Insurance
An indemnity period is chosen by the insured, USUALLY 12, 24, or 36 months.
True
Business Interruption Insurance
Cover will begin with the occurrence and end not later than the maximum indemnity period chosen.
True
Business Interruption Insurance
Cover is restricted to the time the business was actually affected.
True
Business Interruption Insurance
There are three items insured under a business interruption policy:
- gross profit;
- wages; and
- accountant’s (or auditor’s) fees.
Policies are based on a sum insured representing the gross profit for the indemnity period chosen.
True
Business Interruption Insurance
Gross profit represents turnover (adjusted for opening and closing stock) less the expenses that vary in direct proportion to any reduction in turnover
(called specified working expenses, e.g. raw materials).
True
Business Interruption Insurance
The payroll element is USUALLY insured in full, although a lower rate is applied to this element.
True
Business Interruption Insurance
There will USUALLY be a material damage warranty.
True
Business Interruption Insurance
Material damage warranty requires that a property policy, covering the physical damage for the incident, should be in place BEFORE the business interruption policy comes into operation.
True
Business Interruption Insurance
The two policies will USUALLY be linked
and provided by the same insurer.
True
Material damage warranty and Business Interruption Insurance linked together
Question 2.4
It is necessary for a property policy covering the physical damage to be in place before the business interruption policy come into operation.
True
Material damage warranty and Business Interruption Insurance linked together
The most common policies are:
Fire and special perils ,
‘All risks’,
Engineering.
‘All risks’ :
Insurers OFTEN issue a combined material damage and business interruption policy
Engineering:
The perils covered are USUALLY either:
• failure of the public utilities supply; or
• sudden and unforeseen damage from any accidental cause not specifically excluded.
Fire and special perils
The standard perils are extended to include non-domestic boilers, and included under special perils are six engineering special perils not covered by the material damage policy
(although because of the material damage warranty the material risk will need to be covered by an equivalent engineering policy)
Certain optional extensions are available for an ADDITIONAL PREMIUM.
True
Cover may be for the same perils as at the insured premises or may be more limited.
Examples are:
• specified suppliers
- unspecified suppliers
- specified customers
- transit
- prevention of access: i.e. where damage to a neighbouring property may prevent access to the insured premises;
- public utilities
Specified suppliers?
Business Interruption policy extension
Cover is extended to those suppliers whose ability to supply is important to the business’ ability to function;
Unspecified suppliers ?
Business Interruption policy extension
Extends the cover to any supplier;
Specified customers?
Business Interruption policy extension
Based on an estimate of the maximum trading to each customer;
Transit?
Business Interruption policy extension
The property of the insured whilst in transit;
Prevention of access:
i.e. where damage to a neighbouring property may prevent access to the insured premises;
True
Business Interruption Insurance
For example:
damage to electricity, water, gas or telecommunication supplies, causing an interruption in supply to the insured. what type of extension is this if any?
Public utilities;
Business Interruption Insurance
What is Creditor insurance?
Covers an insured’s inability to continue credit instalment payments in the event of redundancy or unemployment.
Cover would be limited (for example, 24 months),
True
Creditor Insurance
Creditor Insurance insurance, would GENERALLY exclude the first month of any period.
True…
