LO3: Understanding the main classes of insurance written in the London Market

Question 1

marine insurance

Answer 1

covers things with some relation to the sea but its not always obvious

Question 2

honor policy

Answer 2

can be lack of clarity surrounding the insurable interest or value of the item being insured for marine. this is the name for such a policy

Question 3

policy proof of interest

Answer 3

the existence of the policy can be used as proof of the insurable interest

Question 4

commercial vessel insurance covers (examples)

Answer 4

cargo
cruise/passenger vessel (holiday vessels abd ferries that carry people and vehicles)
specialist vessel (cable layers, drilling ships, ect.)

Question 5

vessels

Answer 5

sailing (racing to cruises holidays to owner operated)
motor (super vessels to owner operated)
inland (canal boats)

Question 6

marine hull insurance

Answer 6

covers damage to the ship
- loss/damage type of insurance
- categorised as first party insurance or short tail insurance

Question 7

tail of insurance
- short (examples)
- long

Answer 7

lag between the insurance incepting and the closure of any claims

short: claim notification is quick and usually finalised quickly
- loss damage policies for hull and propery
long: large lag between the insurance period and the closure of claims related to it
- third party liability

Question 8

particular average

Answer 8

special term to describe physical damage to the insureds property

Question 9

in the event of a collision

Answer 9

• each party pays for the others damage in proportion to their fault
• they can then claim back from the hull insurance for collision liabilities

Question 10

builders risk insurance

Answer 10

• combined physical damage and liability cover
• insured can be the eventual owner or the owner and the building yard
• accounts for the length of time and the increasing value of the ship over that time

Question 11

loss of earnings insurance

Answer 11

• doesnt cover pure business risks (no work)
• usually requires some physical damage to the vessel
• policy limit/deductible often expressed in days along with maximum payable per day
• separate from business interruption insurance

Question 12

cargo insurance

Answer 12

physical damage insurance for the item being moved around, not standard to include liability for its damage to the transportation vehicle

• 90-95%of transit done by sea
• covers journerys by road, rail and air as well
• doesnt anticipate insuring storage type risks

Question 13

goods in transit insurance

Answer 13

primarily liability insurance for the person/company moving the cargo, for their own property but mainly for the cargo

includes releasing the cargo to the wrong party at port

doesnt ususlly include sea carriers

insurer questions
- whats the nature of the insured business?
- what controls are needed?
- does the insured have their own fleet, is it well maintained

can be written by marine or nonmarine

Question 14

stock throughput insurance

Answer 14

• end to end product
• combines transit and storage policies (no gaps in coverage)
• written by marine

Question 15

jewellers block insurance
- exclusions
- written by?

Answer 15

package policy that covers many aspects of the business
- manufacture
- trade shows
- exhibitions
- retail

physical damage/loss type insurance but excludes mysterious disappearances and inventory losses

written by marine

Question 16

specie insurance

Answer 16

covers
- loose gemstones
- precious metals
- valuable documents (covers cost of reconstruction)

damage/loss cover

written by marine

Question 17

fine art insurance
- covers
- payouts for…
- insureds

Answer 17

covers
- paintings
- sculptors
- installations ( light/sound)

physical loss/damage insurance, static and in transit

pays for repair and/or the loss of value due to the damage

insured: museums, private collectors

written by marine and nonmarine

Question 18

satellite prelaunch insurance

Answer 18

covers physical loss/damage until the launch insurer takes over, when the engines initially ignite

Question 19

cash in transit insurance
- risk prevention measures

Answer 19

written by marine and nonmarine covering the movement of money between locations

key risk prevention measures
- varying routes
- mixing up truck crew to avoid inside jobs
- armed truck crew
- gps on trucks
- not leaving vehicle unattended
- safety measure to soak/dye money if someone tries to break in

Question 20

war and strike insurance

Answer 20

• can include terror
• fairly available in the marine london market

Question 21

war insurance

Answer 21

cover
- war
- civil war
- captures
- seizes
- damage due to abandoned mines and similar ancient weapons

usually excludes piracy

Question 22

stike insurances

Answer 22

strikes and damage caused by terrorist (those acting for political/religious motives)

Question 23

marine third party liability
- examples
- also bought by

Answer 23

examples:
injury or death of crew
injury/death of visitor on board
pollution
damage to cargo
damage to others property through collisions (docks, lighthouses)
removing wreck after crash
using a hired vehicle

bought by:
vessel owners
vessel operators
port authorities
shipbuilders/repairers
marina owners

Question 24

political risks insurance
- aims
- included
- alternatives

Answer 24

aims to create a more stable environment for investment into developing markets

manage risks arising from the (in)actions or restriction imposed by hostile/unconstitutional governments

includes:
- CEND (confiscation, expropriation, natailisation and deprivation)
- ccp (cental counterparty)
- construction frustration
- war on land

alternatives
- spreading of risk amongst competitors
- state funded export credit scheme

Question 25

offshore energy insurance

Answer 25

related to oil and gas extraction (upstream) covers: exploration phases construction phases operational phases

Question 26

property insurance - examples - can cover ?

Answer 26

office building industrial buildings pubic buildings retail units agricultural buildings domestic buildings covers - damage - machinery - fixtures and fittings - raw materials before processing - finished product before dispatch

Question 27

resintatement

Answer 27

available for property but not for marine, means the reconstruction of the property therefore the sum insured should be enough to cover the project with the time kept in mind

Question 28

stock insurance

Answer 28

covers stock on the insured premises, regular reports of the stock level are made to the insurer

Question 29

theft insurance

Answer 29

requires forced entry

Question 30

glass insurance

Answer 30

covers the boarding up of the property

Question 31

pecuniary insurances

Answer 31

cover monetary losses rather than physical damages includes: - money insurance (includes valuable docs) - fidelity guarantee insurance (fraudulent acts) - business interruption

Question 32

construction insurance

Answer 32

usually has multiple parties as the insured can extend into the maintenance period of the structure (after the hand off) to let snagging element be worked out types (both combinations of physical damage and liability covers): - contractor all risks (bought by the main contractor on behalf of all the others) - erection all risks (bought by the contractor responsible for putting up/installing machinery)

Question 33

onshore energy

Answer 33

applies to the midstream and downstream (after the oil/gas is extractd), and mining power stations and renewables midstream = pipelines downstream = refining and processing

Question 34

cyber insurance - definition - issues - covers

Answer 34

covers risks related to losses due to use of networks to access online systems and information issues: - professional indemnity - network security failures - privacy breaches cover: - bi - reputation protection (liasing with customers) payment of ransom - practical support - physical damage - regulatory investigations

Question 35

business interruption insurance - subclasses

Answer 35

replaces lost income after a waiting period requires loss/damage tot he insured property unless contingent bi (damage to an external party) is included subclassess - advanced loss of profits - delay in startup

Question 36

casualty - aka - examples

Answer 36

nonmarine liabilities examples: - employers liability - public liability - professional liability (claims against for incorrect advice or negligent activity) - motor liability - general liability - product liability

Question 37

bloodstock and livestock insurance

Answer 37

for animals (mainly death and illness) used in business - bloodstock = competitive horses (basic cover can be extended to include infertility) - livestock = all others

Question 38

contingency insurance examples

Answer 38

event cancellation weather-related insurance prize indemnity death and disgrace (reshooting of campaign) over-redemption (offers and promotions)

Question 39

personal accident insurance examples

Answer 39

personal accident personal illness/sickness death in service

Question 40

kidnap and ransom insurance

Answer 40

- kidnappers demand money - can also be written in marine with regards to pirates covers - medical expenses - payment of ransom - providing negotiation team

Question 41

malicious product tamper, extortion, and product recall insurance

Answer 41

extorters demands money for information or for silence doesnt mean there is any loss or damage, insured must take action to protect reputation

Question 42

intellectual property inurance

Answer 42

ip = company/individuals rights to their creation/invesntion covers the cost of suing/ being sued

Question 43

aviation physical damage insurance - aircrafts

Answer 43

private pleasure fixed wing (jet or propellers, stages of interest: take off, flight, landing) commercial fixed wing rotary aircraft gliders (no independent means of propulsion) mircolights (hang-gliders with small engine) hot air ballons drones (unmanned)

Question 44

aviation liabilities

Answer 44

passengers third parties other than passengers product realted

Question 45

loss of use insurance

Answer 45

like marine loss of earnings or property bi

Question 46

loss of license insurance

Answer 46

for individuals (air crew and traffic controllers) that have failed medicals, not their fault will replace personal income

Question 47

airport operator policies

Answer 47

combine physical damage and liability - premises liability - products liability - hangar-keepers liability (maintenance and storage services, not just a hangar)