Chapter 6: Liability Insurance Flashcards
(26 cards)
Which Act makes EL mandatory?
Employers’ Liability (Compulsory Insurance) Act 1969
What’s the minimum limit of liability for EL?
£5m, though most insurers offer a £10m limit.
What does the Employers’ Liability Tracing Office (ELTO) do?
Provides insureds access to the history of EL policies in case their injury has a large latency.
What does the Employers’ Liability Database do?
Contains EL claims history.
What is a ERN?
The Employer Reference Number. Used to uniquely identify the employer in the ELTO and ELD.
What is the standard cover for EL?
Cover for injury or death of an employee sustained under a contract of service or apprenticeship.
Is an employee’s property covered in EL?
No. This would fall under the public liability policy.
How does EL deal with the period of insurance?
The injury must be caused during the period of insurance. E.g. a disease with a long latency will be covered by the policy that was in force when the disease was caused.
Give some extensions to EL policies.
- Defence costs (for the employer)
- Additional persons insured (covers directors for actions brought against them in their personal capacity)
How are EL policies rated?
On projected wageroll. The insured may pay more or less at the end of the policy period depending on the actual wageroll.
How might an EL policy be limited?
The underwriter might:
- Limit the definition of ‘business’
- Exclude certain types of work
- Exclude certain machinery / processes
What does public liability cover?
Claims for legal liability from the public for the negligent behaviour of the company or employees.
How does a public liability policy define ‘accident’?
An unexpected event. (I.e. excludes intentional acts)
Is property damage covered under public liability?
Yes. E.g. the theft of a customer’s goods.
What is a consequential loss and is it covered under public liability?
A loss that directly arises from an accident resulting in injury. These are covered under PL policies.
What is the limit of liability under a PL policy?
Generally £2m. Though £10m is quite common.
What are the two optional extensions to a PL policy?
- Tenant’s liability - legal liability for leased or rented property
- Defective premises - cover the continuing liabilities for 6 years after the disposal of the property previously owned.
What are some of the exclusions to a PL policy?
- Employees (covered under EL)
- Insured’s property (covered under material damage)
- Product liability
What does products liability cover?
Covers liability for injury or property damage due to the supply of goods. Possibly because of faulty products.
When does the loss have to occur in products liability?
The damage must occur during the period of insurance.
What are the four exclusions to a products liability policy?
- Contractual liability - where the insured has accepted more restrictive conditions than would normally apply.
- Damage to goods supplied
- Faulty design or formula
- Unsuitability or failure to perform
What is a ‘claims made’ policy?
The insurer is liable for all claims notified within the period of insurance, regardless of whether the loss actually occurred during the policy period.
What is a ‘claims occurring’ policy?
Where the event giving rise to the loss must occur during the period of insurance.
What can’t insurers insure against in Trustee Liability?
- Fines
- Cost of unsuccessful criminal defence arising out of fraud or dishonesty
- Arising from conduct the trustee was aware of but did nothing about
