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

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Flashcards in Chapter 3 - Main classes of business written in the London Market Deck (59)
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1

Marine insurance - what are Honour policies?

Writing insurance where the purchasers insurable interest is not entirely clear.
Policy Proof of Interest

2

What does Yacht insurance cover?

The following types of vessels
Sailing
Motor
Inland

3

What does Commercial Vessel Insurance cover?

These type of vessels
Cargo
Cruise/passenger
Specialist

4

What is the key common element covered by any type of marine hull insurance?

First party insurance
(Damage to the insured ship - physical loss or damage)

Physical damage caused to property is known as ‘Particular Average’ in Marine.

Most policy wording also provide cover for liabilities arising under maritime law (vessel collided with another vessel)

5

How is Builders Risk insurance used in Marine?

Construction of vessel - expensive & lengthy.

Combined physical damage & liability cover

6

When might Loss of earnings insurance be used in Marine?

If shipowner can’t use ship because it is damaged and can’t earn money from it carrying passengers, cargo, or hiring it out.

I’m non-marine normally referred to as BI.

Waiting period of days before they can claim. Policy limit expressed as a period of days.

Financial provisions calculated using insurers business info such as wages bill or rent

7

Difference between cargo and goods in transit

Cargo = physical damage for goods being moved around

Goods in transit = liability for the entity moving items around, invade they damage goods in their care

8

What does Cargo insurance not cover that hull insurance for ships would?

Liabilities for cargo damaging persons on their property

9

Cargo insurers do not anticipate insuring storage as this would be static - what insurance would be used for this?

Stock throughput insurance

10

Stock throughput insurance

End-to-end
Combines transit and storage policies
Removes danger of gaps in cover

11

Jewellers block insurance

Covers jewellery trade
Introduced into Lloyd’s by Cuthbert Heath 19th century
Package policy covering property and liability risks
Physical loss or damage
Excluded - mysterious disappearance, inventory losses

12

Specie insurance

Loose gemstones
Precious metals
Valuable documents

Physical loss or damage

13

Fine art insurance

Paintings
Sculptures
Installations

Physical loss or damage

14

Satellite pre launch insurance

Moving satellite to launch pad
Cargo covers for physical loss or damage until launch insurer takes over when engines are ignited.
Aggregation is an issue where several satellites launched at once

15

Cash in Transit insurance

Movement of money between locations
Head office to local branch
Bank to ATM
Company premises to bank
Risk prevention includes:
- varying routes
- mixing up truck crews
- armed truck crews
- paper money soaked in dyes
- GPS

16

Goods in transit insurance

Covers liability of the carrier
Does not cover sea carriers
Covers loss or damage to goods, releasing cargo to wrong party

17

Parties in insurance
First party
Second party
Third party

First party = insured
Second party = insurer
Third party = anyone else

18

War and strikes insurance

Covers war and civil war risks
Captures and seizures
Damage caused by abandoned mines
Piracy not covered - covered in hull and also cargo

19

Why is War and Strikes insurance freely available?

Marine risks expected to be mobile and able to move out of danger should it arise

20

Strikes insurance covers...

Strikes and damage caused by terrorists or political/religious motives

21

Types of marine related liability

- injury/death of crew
- injury/death of visitors
- pollution caused by escape of cargo etc
- damage to cargo
- damage to other people’s property

22

Parties who should consider liability insurance

- port authorities
- shipbuilders/ ship repairers
- marina owners

Liability for land-based employees covered by non-marine employers liability

23

Political risks insurance (PRI)

Allows investors and businesses to mitigate risk arising from restriction imposed by government actions

Offers trade finance banks realistic alternative to syndicating exposure to direct competitors

Alternative for exporters to using state-funded Export Credit Schemes

24

Subclasses of PRI offered

Asset risks such as CEND, CCP.

Contract frustration risks such as non-payment, non-delivery, exchange transfer, non honouring of documentary letters of credit, wrong calling of bonds.

War in land
Political violence

25

Offshore energy insurance

Location and extraction of oil and gas under seabed. Upstream.

Exploration phase
Construction phase
Operational phase

26

Non-marine: Property insurance

Physical damage for buildings
Machinery fittings and fixtures
Raw materials
Reinstatement of building

27

Types of insurance that fall within property but should be reviewed separately

- stock insurance
- theft insurance
- glass insurance
- goods in transit

28

Pecuniary insurance

Cover monetary loss:
Money insurance (money and docs)
Fidelity guarantee insurance
(Fraudulent acts)

29

Construction insurance

Each party should get their own insurance but makes sense to have central policy to prevent gaps in cover.

Maintenance periods can be built into policy for 12 months

30

CAR and EAR policies

Contractors all risks
Erection all risks

Physical damage and liability cover

CAR - on behalf of sub contractors
EAR - contractor responsible for putting up machinery or steel structures