Chapter 6 Flashcards
(57 cards)
In property insurance, what are the 3 main parts of standard fire cover?
- Fire
- Lightening
- Explosion
What are some special perils in property insurance? (Name 2)
Riot, explosion, aircraft, subterranean fire, flood, storm, escape of water, sprinkler leak, subsidence.
What does the riot compensation act now limit and what caused this shift?
The amount that can be recovered from the police.
The 2011 riots in the UK.
What are the 2 main reasons, certain types of damage might be excluded in property insurance.
The damage was caused by a fundamental risk
Because the risk should be / is better insured under an other type of insurance.
Name 2 common exclusions in property insurance.
War, radiation, terrorism (covered separately by Pool Re), NI, pollution, sonic bangs…
Who might insurers / brokers approach if an unusual peril needs covering in property insurance.
Lloyds of London.
Does ‘all risks’ mean everything is covered?
No - it covers everything not specifically excluded and accidental.
What is a gradually operating exclusion?
Damage that happens slowly over time, like rust or corrosion.
How is insurers definition of theft different to the legal definition and how does this affect cover?
Insurers include a phrase which means that theft must include force or violence. Essentially, it’s not a theft if there is not a break in.
If a theft takes things without violence, it wouldn’t be covered.
If a thief took a key by force and then entered a house using that key (so, there was no break in) would this be covered?
Yes - as the key was obtained by force
Name 2 common exclusions in theft insurance.
And what might an insurer insist on for smaller risks?
Collusion, fire, cash and livestock.
An intruder alarm warranty.
What is an EML?
Estimated maximum loss.
Thief’s won’t usually take everything so insurers usually calculate the value of the worse case scenario and insure that amount.
What would have a higher rate - general contents or target good?
Target goods.
What kind of business might want glass cover?
A high street shop.
Why would fire be excluded under glass cover?
Because this peril will be covered elsewhere. (Under a standard fire policy)
Why might a business want money covered?
Often shops have a lot cash and cheques on the premises. - it is a risk to have this so they may want to take out insurance to protect against loss of money.
What is non-negotiable money?
Money which is difficult to convert to cash value like crossed cheques.
Negotiable money would be something like bank notes.
What is an escort warranty in money insurance?
A promise to have a number of able-bodied people present when large amount of money is in transit.
What is pecuniary insurance?
It only relates to money / direct financial loss.
What is BI insurance?
It covers loss of earnings and additional expenses incurred as the result of a material loss.
What is an indemnity period in BI insurance?
The maximum period of time the income of a business could be affected as the result of damage caused by for example, a fire.
Can an indemnity period in BI cover exceed a policy period?
Yes!
How is gross profit calculated?
Gross profit (Turnover + closing stock) - (opening stock + uninsured working expenses)
Give 2 examples of an uninsured working expense
Electricity, bills, raw materials.
