Pecuniary Losses Flashcards
What does Pecuniary mean
Relating to or involving a monetary loss, Covers wealth
Why are Pecuniary policies different to other policies
Wealth is intangible
Are these usually commercial or personal policies?
Commercial
Money insurance
Third-party theft of physical money
Why is money insurance usually only offered to businesses
Susceptible to moral hazard
What are excluded from money insurance policies?
Employee error and omissions
When is money covered in a money policy
At all times: In transit, on-premises at the owners home, or authorised employees homes
Credit insurance
If a debtor fails to meet obligations this cover the remainder of the debt they are due to payout
Why might you get credit insurance besides financial reasons?
The management interment: the help you get from the insurer to monitor and recoup the debit
Guarantees or bonds
If the insured does not or can not fulfil the contract or an insured event occurs that causes the loss
Performance bond
Bond issued to one party of a contract as a guarantee against failure of the other party to meet obligations specified in the contract.
What cost is covered in a performance bond?
The additional cost of switching providers
Abandonment and cancellation
When an insured event causes an event to not happen due to unforeseen circumstances
What is the difference between an abandoned and a cancelled event?
Abandoned stopped after it started, cancelled never happened
Fidelity guarantee
Covers theft committed or aided by employees
What must be proven in a fidelity guarantee claim?
That the loss happened due to an employee
Who can Fidelity guaranteeas cover (2)
All employees or certain employees such as accountants
Business interruption/consequential loss
Covers business losses against unforeseen risks that cause the business to lose money due to inability to continue business for a period of time as a result of an insured peril.
What is covered in business interruption insurance
Loss of income and cost of working can also cover standing charges such as costs of working
Why does FBD have to pay out claims of Covid but other insurers don’t have to?
FBD explicitly said to a client that their policy cover covid, other insurers did not say this explicitly and the pandemic in their contract intended to cover something like e coli, since they made no provision for it they had not intended to include it in the contact
Contingent business interruption
Addons for business interruption policies
Addons for business interruption insurance (5)
- Supplier extension: Cost of getting goods from somewhere else
- Customer extension: Customer cant accept delivery
- Public utility extension
- Motor vehicle
- Goods in transit
Legal expenses insurance
Covers the cost of pursuing or defending a claim
What are some of the limitations of legal expenses insurance
-Fines and penalties are excluded so are risks covered elsewhere (el, pl policies also cover this risk)
How are pecuniary claims processed differently and why
They are thoroughly investigated because of the intangible nature and susceptibility to fraud
