Module 2 - Policy Cover Flashcards
What is a “standard” packaged policy?
There is no such thing
What types of cover are needed by all buisness’s that are always included in any commercial packages policy also know as core cover’s?
- Employers’, public and products liability
- Buisness Interuption
- Property Damage
What are the main types of commercial packaged policys? They start with “o” “sh” “h and g” “sa” “su” “c h” “c l ince c”
- offices;
- shops;
- hotels and guesthouses;
- salons;
- surgeries;
- care homes; and
- commercial liability (including contractors).
Under the core cover “property damage” what type of cover is always present?
Contents of the premises
Is buildings cover a core cover?
No - as many propertys are rented.
It can be added on though where the property is owned and not rented.
What basis is contents cover on?
Reinstatment/ replacemnent as new
What two ways to insurers help to mitigate inflation when covering contents?
The sum insurered is usually
- Index-linked
- day one reinstatment (automatic 15% uplift on the decared value day one)
Is fixtures and fiting covered under the core cover?
Yes - fixtures and fittings and internal decorations for which the insured is responsible as tenants.
What is the maximum contents sum insured on a packaged policy?
Between £200,000 - £500,000. Higher than this and they would need a more flexible commercial combined policy.
Explain automatic reinstatmnet of sum insured ?
If the sum insured is £200,000 and you have a small fire which required £50,000 there will be £150,000 left of your sum insurered. In order to retain the sum insured required it would need to be put back to £200,000.
The sum insurered will not be reduced by the amount of a claim unless the insured or insurer wishes to do so.
The insurer will generally reserve the right to charge an additional premium for reinstating the sum insured to the level prior to the claim.
How do professional fees come into the contents core cover?
Professional fees will be paid by your insurer in the even of a claim under the reinstatment of the property. Allowance for this must be considered and adequate under the sum insured on the policy.
What is debris removal covered under?
Property Damage
There will be additional costs incured when demoloishing/removing debris and this needs to be accounted for in the sum insured
What does the “european union and public authorities” clause under property damage mean?
It covers the additional costs resulting from the need to rebuild elsewhere or in a different way - specifically as required by:
EU legislation
Acts of Parliment
Bye-laws of any public authority
Waht does the capital additions clause cover and what does the insured need to do?
It automatically covers any additions or alterations to the building/tenants improvments/general contents limited to : 10% of the relavant sum insured up to £500,000.
The insured needs to proved the insurers with details of these items ASAP and atleast within 6 months.
Some insurers provide automatic cover untill the renewal date.
AWhat is all risks cover and when would an all risks claim be valid?
Usually any loss of or damage to property insured.
It must have occured accidentally (as far as the insurer is concened)
Cause must not be excluded in the policy wording.
How might All Risks cover be written into the policy if it is not under “all risks”?
Under what is effectivly the same cover but under the different perils, such as:
fire, lightning, explosion, earthquake, aircraft, riot, malicious damage, storm, flood, escape of water, impact, damage to underground pipes/cables, escape of oil, collapse of TV aerials and accidental damage.
What are the typical excess’s for the different perils under “All Risks”?
£250 - £500 applys to perils of storm, flood, escape of water, malicious and accidental damage
Subsidence £1000
What can you claim for under theft?
Contents are covered.
What requirments are there to have a successfull theft claim and how does this differ on an office policy?
If entry/exit to/from the premises is gained my forcible and violent means.
This does not apply to some office policys - they typically have wider cover when losses occured from open windows and doors.
What is a typical theft excess?
£250 - £500
When does a money claim fall under “all risks” and when does it fall under “money”?
Is is claimed on under all risks if the loss or destruction of or damage to money in transit and on the insured premises.
‘Money’ typically includes items such as cash, bank and currency notes, cheques, postal and money orders, postage stamps, national insurance cards and luncheon vouchers.
Money also normally includes damge to safes and loss or damage to clothing and personal effects belonging to the insured or their directors, partners or employees, and theft of postage stamps, postal orders and travellers’ cheques, subject to a limit of typically £250–£500 per person.
What are the typical policy limits under “money”?
- non-negotiable money: £250,000;
- during business hours, in a bank night safe or in transit: £2,500-£10,000;
- out of business hours in locked safe: £1,000-£2,000;
- out of business hours not in locked safe: £500;
- at the residence of the principal or an authorised employee: £500; and
- from a vending machine: £300.
What is covered under personal accident or assault?
This provides monetary compensation to the principle or employees if they are assualted by thieves.
By either a lump sump or weekly benefit.
Cover includes damage to clothing and personal effects of employees attacked during a robbery up to £500.
What is the age limit on a personal accidnet/assault policy?
16 - 65 or 70 years old.
What glass is covered on an all risks basis?
What excess?
What is not included?
All forms of fixed glass in windows, doors, signs and sanitary fittings.
The cost of temporary boarding up and damages to frames and lettering.
£500 sum insured
Not included is any broken glassware which is on sale in the shop.
£100 excess usually
When would no cover be provided when entry to a commercial premises has been gained?
If is has been gained by:
- using a key
- means of a trick
- hiding on the premises while they are open for buisness
- gaining entry to an unlocked premises
Any occasion where no force or violence has been used. If force or violence was used when leaving the premises you would be covered.
Is terrorism covered?
Not as standard however it is possible to buy back cover for political terrorism as a seperate section of the policy
Is loss, destruction or damage to computer or data processing equipment due to programing or operator error, virus or hacking covered?
No
Is wear and tear, gradual deterioration, faulty or defective design materials or workmanship, existing or hidden defect covered?
No
Is mechanical or electrical breakdown or derangement covered?
no
Is unexplained losses, fraud or dishonesty covered?
No
Is theft involving the principal, partners, directors, employees or household members covered?
No
Is escape of water, malicious damage and breakage of glass when the premises are unoccupied covered?
No
Is damage to moveable property in the open by theft, wind, rain, snow, sleet, flood or dust covered?
No
Is changes in the water table and frost damage covered?
No
Is money losses due to clerical or accountancy error, from unattended vehicles, and those due to the fraud or dishonesty of an employee not discovered within 7 working days covered?
No
Is money losses on the customer’s premises covered?
No
Is contents covered?
Yes
