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

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

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

Marine insurance - what are Honour policies?

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


What does Yacht insurance cover?

The following types of vessels


What does Commercial Vessel Insurance cover?

These type of vessels


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)


How is Builders Risk insurance used in Marine?

Construction of vessel - expensive & lengthy.

Combined physical damage & liability cover


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


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


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

Liabilities for cargo damaging persons on their property


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

Stock throughput insurance


Stock throughput insurance

Combines transit and storage policies
Removes danger of gaps in cover


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


Specie insurance

Loose gemstones
Precious metals
Valuable documents

Physical loss or damage


Fine art insurance


Physical loss or damage


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


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


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


Parties in insurance
First party
Second party
Third party

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


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


Why is War and Strikes insurance freely available?

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


Strikes insurance covers...

Strikes and damage caused by terrorists or political/religious motives


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


Parties who should consider liability insurance

- port authorities
- shipbuilders/ ship repairers
- marina owners

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


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


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


Offshore energy insurance

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

Exploration phase
Construction phase
Operational phase


Non-marine: Property insurance

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


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

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


Pecuniary insurance

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


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


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