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LM1 DB > Chapter 3 - Main classes of business written in the London Market > Flashcards

Chapter 3 - Main classes of business written in the London Market Flashcards

1
Q

What are ‘honour policies’?

A

Policies not enforceable by law because insurable interest isn’t always clear aka PPI - policy proof of interest

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2
Q

What is first party or short-tail insurance?

A

Physical loss or damage e.g., Hull / Vessel

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3
Q

What is tail?

A

Time lag between insurance incepting and the final closure of claims under the insurance

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4
Q

What is the term used in Marine for physical damage to the insured property?

A

Particular Average

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5
Q

What does maritime law state if two vessels collide?

A

Both have to pay damages to the other

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6
Q

What is builders risk insurance?

A

Construction of a vessel

Physical damage and liability cover

Purchaser or owner

Length of time and building process value increases

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7
Q

What is loss of earnings insurance (pecuniary)?

A

If a shipowner cannot use a ship for income

Usually because of physical damage

aka BUSINESS INTERRUPTION

Waiting periods - wait a period of days before claiming

Policy limit - valid for x amount of days

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8
Q

What is cargo/goods in transit insurance?

A

Physical damage to the goods whilst on their journey

No liabilities

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9
Q

What is stock throughput insurance?

A

Removes gaps in coverage between static and goods in transit

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10
Q

What is jeweller’s block insurance?

A

Non-marine but Cargo

Jewellery manufacturing, trade shows, exhibitions, retail

Physical loss or damage

Disappearance excluded

Package policy

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11
Q

What is specie insurance?

A

Non-marine but Cargo

Physical loss/damage to loose gemstones, metals (gold, silver etc), valuable documents

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12
Q

What is fine art insurance?

A

Physical loss/damage to ‘installations’ - paintings, sculptures, sound, light

Depreciation of value

Museums, private collectors

Transit or static

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13
Q

What is satellite pre-launch?

A

Physical loss or damage until the launch insurer takes over

Aggregation - insured items in one place where they are exposed to the same perils

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14
Q

What is cash in transit?

A

Non-marine but Cargo

Movement of money between locations

Risk prevention criteria

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15
Q

What is goods in transit?

A

Liability of the carrier

Loss/damage to goods and releasing cargo at the wrong destination/party

aka third party liability claims

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16
Q

What is war and strikes insurance? Including terrorism

A

Damage caused by abandoned mines or ancient weapons

Strikes and damage caused by terrorists or those acting from a political or religious motive

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17
Q

What is marine liability insurance?

A

‘Land’ based

Long-tail insurance

Injuring someone else or their property

Port authorities, shipbuilders repairs, marine owners

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18
Q

What is political risks (PRI)?

A

Investors, businesses to mitigate/manage risk arising from governmental actions

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19
Q

What is offshore energy insurance?

A

Upstream

Location and extraction of oil and gas from the sea bed

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20
Q

What are the three phases of offshore energy?

A

Exploration

Construction

Operational

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21
Q

What is onshore energy insurance?

A

Downstream - processing/refining elements

Midstream - pipelines - non-renewable

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22
Q

What is property insurance?

A

Physical damage to buildings e.g., office, industrial

Covers machinery, fixtures and fittings

Raw materials before go into manufacturing process before shipment

Reinstatement of buildings when claiming

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23
Q

What is stock insurance?

A

Damage at insured’s premises

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24
Q

What is theft insurance?

A

Forcible entry only

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25
Q

What is glass insurance?

A

Also includes boarding up

26
Q

What is pecuniary insurance?

A

Cover monetary loss from internal or external perils

27
Q

What is money insurance?

A

Money and valuable documents e.g., tickets and vouchers

28
Q

What is fidelity guarantee insurance?

A

Fraudulent acts committed during the policy period

Discovery period - notified of a claim sometime after the event

29
Q

What is construction insurance?

A

Contractors/sub-contractors under one policy to prevent gaps

Maintenance period (period immediately after handover) - usually 12 months - ‘snagging’

30
Q

What is contractors all risks (CAR)?

A

Physical damage and liability cover

Main contractor on behalf of sub-contractor

31
Q

What is erection all risks (EAR)?

A

Contractor responsible for putting up/installing machinery or steel structures

32
Q

What is cyber insurance?

A

Online systems and information

E&O/PI/D&O - product fails

Network security failures - BI, damage, data stolen

Privacy breaches - customer data is stolen

33
Q

What is business interruption (BI) insurance?

A

Physical loss to property which triggers shut down and loss of earnings

34
Q

What is contingent BI?

A

Damage to external party that causes shut down, not damage to own property

35
Q

What is advanced loss of profits (ALOP) and delay in start up (DSU)?

A

Costs of working overtime

Covers penalty clauses in contracts if build overruns in time or finances

36
Q

What is non-marine liability? And what is it also known as?

A

Aka Casualty

Employers liability

Compulsory in the UK

If an employee becomes injured during their employment

37
Q

What is public liability?

A

Members of the public visiting their premises, or employee to member of the public

e.g., shops, restaurants, riding schools

38
Q

What is professional liability?

A

Claim being made against a lawyers/doctor etc for incorrect advice or negligent activity

39
Q

What is motor liability?

A

Third party for loss or damage to them or their property

40
Q

What is general liability?

A

Purchased in addition to physical damage or construction

41
Q

What is products liability?

A

Product causing physical damage to something or injury to someone

Any party in the manufacture, sales, supply, distribution chain

42
Q

What is bloodstock insurance?

A

Horses, racehorses, show jumpers

43
Q

What is livestock insurance?

A

Cattle, sheep etc

Death or illness of the animal including fertility

44
Q

What is contingency insurance?

A

Event cancellation

Weather related

Prize indemnity

Death and disgrace - advertising campaigns of ‘bad’ press celebs

Over-redemption - offers and promotions going too far (costly)

45
Q

What is personal accident, personal illness/sickness?

A

Not a policy of indemnity

Schedule of benefits are paid

46
Q

What is death in service?

A

Payment 2-4x salary

47
Q

What is kidnap and ransom?

A

Demanding payment for release

Medical expenses once released

Family during the incident

48
Q

What is malicious tamper, extortion, product recall?

A

Removing and replacing stock

Brand loyalty

Covers leaking info

49
Q

What is intellectual property?

A

Protects work or inventions

Trademarking

Legal cost of defending IP

50
Q

What is aviation insruance?

A

Does not include wear and tear

Physical damage of aircraft and location

Private pleasure fixed wing aircraft

Commercial fixed wing - taking off, landing, flying

Rotary aircraft (helicopters). gliders, microflights (hang gliders), hot air balloons, drones

51
Q

What is aviation liabilities?

A

Passengers - whilst boarding, on, disembarking the plane

Third party - baggage handlers

Product related - illness from food, contaminated fuel, repairs

52
Q

What is loss of licence in aviation?

A

Failed medical so loss of licence to pilot

Provides replacement personal income

53
Q

What is airport operators insurance?

A

Premise liability - duty free

Products - fuel for aircrafts

Hanger-keepers liability - maintenance/storage for clients

54
Q

What are the different ways to buy reinsurance?

A

Single risk

Certain classes

Insurer’s whole portfolio

CAT losses

55
Q

Should inwards premium be greater than and equal to the sum of claims, reinsurance and operating costs to be profitable?

A

Yes

56
Q

What are the benefits of purchasing reinsurance?

A

Increase capacity - limits of RI, direct risks, greater share = placing/claims process is quicker

Smoothing peaks and troughs - spreads the cost of large losses over a period of time, allows insurers to diversify into new COBs, protects the portfolio

57
Q

Benefits of writing/selling reinsurance?

A

Access other geographical areas

Access other COBs

58
Q

What are three types of reinsurer?

A

Companies that do not write direct

Syndicates

Insurers who do insurance and reinsurance

59
Q

What is a retrocedant?

A

Reinsurer purchasing reinsurance for themselves

60
Q

Who buys reinsurance?

A

Insurers

Reinsurers

Captive insurers - takes risks only from its parent company or group

Mutual insurers - group together and form a pool (e.g., P&I)

61
Q

What does cession mean?

A

Share of risk passed to UWs

LM1 DB (7 decks)

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