Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

LM2 > Chapter 2 - Risks written in London Market > Flashcards

Chapter 2 - Risks written in London Market Flashcards

(90 cards)

Start Studying
1
Q

What does agri, crop and forestry insurance cover?
What is the main peril?
Give an example of claim

A

Physical damage for any commercial crops
Hail & disease
Crop failure

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What does bloodstock and livestock insurance cover?
What is the difference

A

Bloodstock = injury or death to horses & dogs
Livestock = injury or death to Farm animals

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are the different types of contingency insurance? What do they cover? And what should an UW consider (3)

A

Event cancellation - refunding tickets and rearranging event. Consider tour schedule, T&Cs for tickets, artist health

Over-redemption - Protects against a promotion incurring a net loss

Prize indemnity - covers cost against a prize that may cost the client money e.g. winning a car

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What does personal accident / illness cover?

How is it paid?

What exclusions are there

A

Accidental injury

Predetermined amount, paid in schedules

Pre existing conditions are excluded

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What does Kidnap & Ransom cover?
What are the main considerations

A

Ransom payment, medical fees and salary lost because of kidnap. Hostage negotiators

Consider security, confidentiality of insurance, who is the insured

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

How much market stake does property hold in Lloyds?

A

25%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What does Constructors All Risks insurance cover?

A

Liability and Physical damage
- Damage to building works
- Business interruption
- Public & Employer Liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What period should the CAR policy period match?

A

Constructor’s contracting period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is the maintenance period in CAR?

A

Additional coverage once construction has finished - only purchased if constructor has additional liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What are some of the extensions in CAR?

A

Reconstruction plans
Machinery breakdown
Expenses - where additional costs incurred for overtime

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are 3 exclusions in CAR?

A

Defective design
Wear and tear
Existing problems

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is Erection All Risk

A

Coverage for cranes, or scaffolds. Can be purchased separately

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are the 3 constituent parts of property insurance

A

Buildings, Machinery, Stock

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is typically covered in an All risk property? And exclusions

A

Fire (non chemical)
Lightening
Earthquake
Explosions
Aircraft
Riots
Flood / Storm
Malicious Acts
Impact (3rd party vehicles)

Does not cover:
War
Nuclear
Inherent vice (risks which will always occur e.g. rust)
Trade risks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What can be additionally purchased as part of property all risk

A

Sprinkler leakage
Subsidence (Ground caving in)
Fraud
Theft
Goods in transit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Which class of business uses reinstatement for indemnifying the insured? What is reinstatement

A

Property.

Insurer takes over property, restores to pre loss condition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

When does the reinstatement memorandum applied? What is it?

A

When underinsurance is applied - if sum insured is only 85% of reinstatement value at date of loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is day 1 reinstatement

A

Value of reinstatement is declared on date policy inception. Percentage value uplift is agreed to compensate for inflation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Whatis Onshore energy. Name 3 considerations for this coverage

A

Property risk where subject matter insured is related to energy.
Location, Activity, Risks created

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What does Stock insurance cover and how is the premium paid?
What are the considerations

A

Physical damage (fire, water, theft) of raw and completed products
Premium instalments paid based on exposure from regular stock reports
Stockpiling

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What does theft insurance cover and exclusions

A

Theft.
Collusion, inside job,

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Money & Pecuniary insurance coverage, exclusions and considerations.
How are claims paid?

A

Pecuniary - Financial losses
Money - Purely cash related
Physical damage in loss. E.g. cheques.

Basic cover is on an all risk basis

Consider negotiability - how easily the item can be converted / transferred

Claims - how easily can the stolen documents be reconstructed. Pays for cancellation and reprinting costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Fidelity Guarantee - Coverage, Purchasing options. Considerations

A

Covers theft / fraud from employees, recoverable up to 24 months after policy expiration

Purchased for named employees, blanket cover. role cover

Consider internal controls e.g. screening

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

BI Insurance coverage. (Contingent BI)

A

Replacing potential income as a result of a physical loss (indirectly - Contingent)

Deductible is expressed in days after incident (14 days

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Homeowners - Coverage, UW
Delegated Same risks covered as standard commercial property. Not UW in London market
26
Directors & Officers Liability coverage, exclusions, extensions. What type of policy?
Protection (damages & legal costs) from claims made by shareholders who have suffered financial loss. Categorised as US & Non US - losses occurring Excludes fraud Can extend to additional companies, extended reporting period, representation costs
27
What is a losses occurring policy?
Covers all claims if the occurrence date is within the policy period - usually property
28
What is a risks attaching policy?
Covers all claims if arising for the year that the risk is covered - can be much later
29
E&O, Professional indemnity coverage, exclusions, type of policy
Compulsory for brokers, solicitors. Protects damage and legal costs. Excludes claims against investment advice / recklessness Claims made policy
30
What is the usual time limit for claims made
6 years
30
What is a claims made policy
Triggered by date of claim made against the insured. Usually liability
30
What types of professional indemnity does not have a time limit for claims made
Medical malpractice
31
What is public liability coverage
Claims made due to damage caused by employees, covers legal costs and damages
32
What is contributory negligence
The injured party's share of the blame
33
Product liability coverage and exclusions
Losses from defective products on whole supply chain. Indemnifies damages or injury caused by product Excludes already damaged products / liabilities and anything already covered by EL policies
34
Employer's liability coverage, type of policy
Liability for injured employees - compulsory
35
What is ELTO
Employee Liability Tracing Office, allows insured to find insurers against previous employers
36
What type of policy is Worker's compensation, coverage
Strictly liability - no proof required of negligence Paid as percentage of salary, covers medical costs Longshoremen have special coverage
37
General liability
Combined liability insurance
38
Financial Guarantee insurance, coverage, permissions, considerations
Paid out if a specified event occurs Premium paid < 2% of syndicate capacity If risk is written outside of business plan, requires Lloyds agreement
39
Product tamper - main targets, coverage,
Retailers Covers financial damage for brand reputation, removal of products, alternative products, client confidence
40
When is accidental contamination policies triggered?
When a person becoemes ill
41
Product recall - coverage, exclusions
Recall notice, generally any additional financial costs associated with recalling the product Excludes liability associated claims due to product, loss of income and negligence
42
War insurance specifics
Generally not allowed. Permission obtained through lloyds on an individual risk basis (biz planning)
43
Political violence / terrorism specifics
Usually a government backed scheme Covers terrorism, sabotage, mutiny. Subject matter insured similar to policies but risks is humans not natural catastrophes
44
Cyber (first and third party coverage)
First party = own assets third party = others losses and legal costs associated
45
Warranty / M&A benefits and considerations
Protects first party if counter party breaches warranties No need to reserve in case of claims Consider the risk allocation, complexity of deal
46
Aviation Damage Coverage, Exclusions, Claim process
Accidental damage whilst in flight, ground or taxiing - single incident Exclude damage due to wear and tear Repair and replacement, requires loss assessor. If plane is lost then found, this becomes insurer's property if claim is already paid
47
Drone / UAV insuance coverage, requirements
Covers physical (cyber, theft, damage), and liability Requires license to fly drones Minimum liability is 777k
48
Aviation Liability Third Party coverage, exclusions
Damages to third parties, excludes employees, crew, passengers, property, pollution as this is either part of another policy or is not insurable
49
Aviation Liability - Passenger, coverage and exclusions
Accidental bodily injury, losses to cargo (due to damage to aircraft) Excludes employees and crew Requires listed individuals with minimum experience and geographical limits
50
Aviation Liabilty - Operator (3 categories), coverage and exclusions
Premises - Public liability, injury or property damage caused by employees. Excludes product related liability Hangar keeper - Losses for third party aircraft whilst on ground Products - injury or property damage caused by products issued by employees
51
What is wholesale grounding
Product recall insurance, protecting airlines for mass grounding of aircraft (think 737 Max)
52
How does an shipbuilder ensure there is no underinsurance?
Ensure all values at risk are updated regularly
53
What are the 4 areas of coverage for Vessel construction all risk?
Physical damage / Loss Collision and marine liability (P&I) War Strikes / Terrorism
54
How are perils handled in Vessel Physical damage? Provide examples and what are additional coverage subject to the due diligence of insured? What cannot be bought back as additional coverage?
Perils must be specifically named, includes Piracy, explosion and breakdown. Additional coverage can be listed for consequential damage, accidents and negligence. Radioactive contamination is always excluded
55
What is an legal obligation of the shipowner
Obligation to provide compensation for physical damage to vessel
56
What does collision liability cover? How much does the standard hull policy cover?
Pay for damage to another vessel if the insured collides with it. Standard policies cover 75%. 25% requires specialist liability cover
57
What is general average?
If a shipowner takes a hit to their ship for saving someone else - everyone chips in
58
What is salvage in marine insurance
The hull insurer rewarding the saviour ship a reward
59
What is sue and labour? Why are insurers interested in this
Insurers paying additional cost in addition to total loss To incentivise ship owners to minimise losses
60
What are the 3 types of cargo coverage?
All Risk Combinations of named perils
61
Which clause of cargo coverage has the least amount of cover?
C
62
How does cargo and hull insurers differ in terms of coverage?
Cargo insurers do not provide liability cover
63
What is the coverage and exclusions to offshore energy exploration insurance
Physical damage all risk. Excludes delay, wear and tear
64
What are the 3 main risks in exploration offshore energy
Oil / Gas blowout Redrilling Seepage and pollution
65
What is the technical term for the different parties in a contract?
Joint / co venturers
66
How does attachment of claims work in offshore exploration energy insurance?
New well = attach to current policy Working well = attach to next policy year
67
What is the coverage of control of well in offshore energy exploration?
Covers only cost of getting the oil spill under control
68
What is the coverage of redrilling in offshore energy exploration ?
Covers only the cost associated with redrilling
69
What is the coverage of seepage and contamination in offshore exploration energy
Cost of remediating bodily injury, damage to property and clean up costs
70
What are additional coverage points of offshore exploration energy
Making the well safe Underground control of well Wreckage removal Loss of equipment that has been rented
71
What are the key considerations for construction all risk insurance on offshore energy
Rig building participants Delivery to site Assembly
72
What are the 2 key elements for CAR on offshore energy
Physical damage to the rig Liability Excludes all coverage covered in exploration insurance
73
Who generally issues shipowners liability insurance?
Mutuals - consisting of P&I Clubs
74
What are the risks covered by marine liability insurers
Cargo Crew Collision (25% not covered by hull and anything that is not a ship) Third parties Sudden pollution Wrecks Fines (non criminal)
75
Who would marine employer liability insurance cover
Seamen, not categorised as ship crew
76
Who would marine professional negligence cover?
Ship managers, architects, surveyors and brokers
77
Who and what does port liability insurance cover?
Similar to public and employer liability insurance coverage for ports
78
What is loss of hire / earnings insurance?
Business interruption for ships, excess is period of days
79
What does specie and jewellers block insurance cover and exclusions
physical damage and liability risks to gemstones, documents etc Excludes missing only when stocktaking
80
What is the kimberly process
Prevents blood diamonds being introduced to the trade
81
What does fine art insurance cover? And exclusions
Damage and depreciation (as a result of damage) Does not cover climate, vermin or consequential damage
82
Cash in transit insurance coverage and exclusions
Money being moved between banks, does not cover collusion
83
Political risks coverage (4) - precautions
Covers seizing of assets by foreign, undemocratic goverments. Includes: Investment risk Fixed asset risk mobile asset risk trade related risks Insurance company must not violate EU/ US embargoes
84
What is the difference between contract frustration / trade credit and its coverage
Losses arising from one sided cancellation of contracts / not being paid for goods Trade credit = commercial Contract frustration = governmental
85
Bond risks insurance coverage
Losses arising from companies defaulting on bonds
86
How is motor insurance split geographically for Lloyds, how does it get written and what does it cover?
US, EU, rest of world Covers physical damage and liability Delegated underwriting authority because of local knowledge
87
How does Lloyds incorporate ESG into their investment strategy
Managing agents must use non financial risk factors such as climate risk in investment decisions
88
How does managing agents spread risk on investment strategies?
Spread risk across different classes of business and geographically

LM2 (10 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions