General Insurance - Types

Question 1

What do contracts of indemnity mean?

Answer 1

You are entitled to recover the actual commercial value of what you have lost through the occurrence of the insured event

Question 2

Why is it important for the wording used in the insurance contract to be precise?

Answer 2

It could lead to :

• The insurer becoming liable for payments they didn’t anticipate
• The insurer being involved in litigation or legal battles
• Even if they win the dispute, failure to meet claims leads to bad publicity

Question 3

What are the five main types of general insurance?

Answer 3

1. Liability Insurance
2. Property Insurance
3. Motor insurance
4. Marine & Aviation Insurance
5. Personal accident & Health Insurance

Question 4

What is Liability insurance?

Answer 4

This insures you against the risk that you become legally liable to pay compensation to a third party

Question 5

What are the usual excluded claims under Liability insurance?

Answer 5

• Aviation other than as a passenger
• Suicide or self inflicted injury
• Existing disability
• Dangerous sporting activity
• Civil unrest
• Pregnancy

Question 6

What is the length of tail?

Answer 6

It’s the amount of time that it takes for a claim to be reported and settled

Question 7

What are the main types of liability insurance?

Answer 7

1. Employers Liability
2. Product Liability
3. Public Liability
4. Professional indemnity
5. Other liability covers

Question 8

What is property insurance?

Answer 8

This covers you against the loss of or damage to your property and is not limited to just fixed property

Question 9

What is consequential loss cover?

Answer 9

This protects the earnings capacity of the business following a loss of property

Question 10

What can property insurance be split into?

Answer 10

• Buildings

- Contents

Question 11

What are the usual exclusions in property insurance?

Answer 11

• Earthquakes
• Nuclear risk
• War, civil unrest

Question 12

What is reinstatement?

Answer 12

This involves replacement as new, it includes the costs of clearing the site and re electing a new one

Question 13

What is pure indemnity?

Answer 13

This is used for commercial contents and is the depreciated value of the contents covered.

Question 14

What is an average clause?

Answer 14

If at the time you have a partial loss and the sum insured is less than the full value then the insurance benefit is reduced to the same proportion the sum insured bears to the full value

Question 15

What is personal accident and healthcare insurance?

Answer 15

• Personal Accident : Provide payments of a specified amount in the event that you or your dependents suffer the loss of a limb or any other specified ailment
• Healthcare : Insurance to meet medical costs or part of them as part of indemnity insurance

Question 16

What are the possible limits on the healthcare insurance benefits?

Answer 16

• Limiting the price range of hospitals
• Limiting the benefits in respect to each aspect of the hospital
• Limiting the aggregate amount you can claim

Question 17

What are the usual exclusions on personal accident cover?

Answer 17

• Self inflicted Injury
• Cosmetic surgery
• Suicide
• Alcohol or drug abuse
• Unlawful activities
• Dangerous sports

Question 18

What is motor insurance?

Answer 18

This covers the loss of your vehicle, damage to it, and any harm caused to third parties by your use of it

Question 19

What is the comprehensive policy?

Answer 19

This provides cover against third parties causing damage to your vehicles, personal accident cover for you, legal expenses arising from an accident and loss of personal effects carried in your vehicle.

Question 20

What is the indemnity type?

Answer 20

The vehicle will be insured for it’s replacement value by another vehicle of the same make, model and age.

Question 21

What is the motor insurance divided into?

Answer 21

• Private cars
• Commercial vehicles
• Motor cycles
• Motor fleet

Question 22

What are the three types of cover in Marine and Aviation insurance?

Answer 22

1. The hull
2. The cargo
3. The freight

Question 23

What are the usual exclusions for marine inusurance?

Answer 23

• Unworthiness of vessels
• Unfitness of containers
• War
• Strike
• Malicious acts
• Acts involving nuclear motors
• Illegal use
• Use outside stated geographical limits
• Piloted by someone unspecified

Question 24

What is a comprehensive aviation policy?

Answer 24

This will provide cover to the pilot and the airline for liability from:

• Aircraft damage
• Legal liability to injured persons on ground or damage to the ground
• Legal liability to passengers

Question 25

What are the usual exclusions in aviation policies?

Answer 25

1. Not conforming to manufacturer specifications while landing or taking off
2. If the number of passengers exceeds the maximum stated