Chapter 5: Pecuniary Insurance Flashcards
(23 cards)
What is pecuniary insurance concerned with?
Intangibles. Such as income, revenue or value.
What is legal expenses cover for?
To cover the costs of defending or bringing legal actions.
What are the two types of legal expenses cover?
- Group legal benefit
- Commercial legal protection
Who is a group legal benefit policy designed for?
Individuals or groups of people, such as employees.
What are the four areas of group legal benefit policies?
- Employment cover
- Personal cover
- Motor cover
- Conveyancing cover
Who is a commercial legal protection policy designed for?
Cover for companies in their capacity as employers, manufacturers, property owners, traders, etc.
What are the five cover sections to a commercial legal protection policy?
- Employment cover (i.e. EPL)
- Criminal prosecution and defence
- Property disputes
- Motor cover
- Patents and copyrights
What are some of the optional extensions to a legal expenses policy?
- Defending libel or slander
- Involvement in public enquiry
- Investigations by public bodies
- Contract disputes
- Debt recovery
Can individuals be covered for legal expenses for criminal defence?
No. This cover is only available for companies, particular in relation to prosecution under health and safety legislation.
What are some of the limitations to legal expenses insurance?
- Litigation started before effective date
- Litigation advised against by the nominated solicitor
- More specific insurance covers the expenses (e.g. EL)
What is the limit of liability in a legal expenses policy?
Limit per claim, but no limit for the overall policy period.
What is the purpose of business interruption insurance?
Where the insured is unable to continue business activities due to a particular peril. E.g. fire.
What is the indemnity period in a business interruption policy?
The period of time which the interruption will affect the business for.
How is the sum insured chosen for a business interruption policy?
1) Revenue is estimated then at the end of the policy period the actual revenue is stated and the insured may get a rebate
2) Revenue is stated as it is currently then a 1/3 uplift is applied to account for growth.
Is the insured allowed to claim for the cost of preparing the claim in business interruption?
Yes, though the insurer may limit the amount for this.
What is a material damage warranty?
Stipulates that a policy must be in place that covers the physical damage leading to loss of earnings.
Why do material damage warranties exist?
- The funds to complete the rebuilding may extend the length of the interruption period
- The warranties of the property cover will apply for the business interruption cover
What are the three types of business interruption policies?
- Fire and special perils (business interruption)
- ‘All risks’
- Engineering
What are the standard perils of a fire and special perils (business interruption) policy?
Same as those for the ordinary fire and special perils policy.
Also extended to include non-domestic boilers.
What are the special perils of a fire and special perils (business interruption) policy?
Generally the same as those for an ordinary fire and special perils policy, but also including:
- Explosion of steam pipes
- Explosion of vessels
- Collapse of boilers
- Overheating tubes
- Overheating boilers
Give some optional extensions to a business interruption all risks policy.
- Specified suppliers
- Unspecified suppliers (where the property of the insured is stored)
- Specified customers
- Transit
- Prevention of access (if another premises is damaged)
- Public utilities (if something goes wrong with the grid, e.g.)
- Notifiable disease, vermin, murder and suicide -
What does an engineering business interruption policy cover?
- Failure of public utilities
- Sudden and unforeseen damage from any accidental cause to specified machinery and plant
What does an engineering business interruption policy typically exclude?
- Perils covered by the fire and special perils BI policy
- Market exclusions (e.g. war)
- Rationing
- Deliberate act of a supply authority
