Introduction to liability insurance
Liability insurance deal with legal liability that a person may have towards others. One has a legal liability when one becomes liable to compensate others who may be injured, contact sickness or suffer loss or damage of their property as a result of one’s actions or omission. The purpose of liability insurance is to come […]
Building in Course of Construction Insurance
The contractor of a building may, in many cases, be required by conditions of a contract to effect a fire insurance policy for their completed value during the whole term of the contract. It will be unfair to charge a full premium because the value at risk in the earlier days of the contract is […]
Insurance on a Floating Basis
This is an insurance policy which covers property in a number of locations or situations in a collective sum insured without giving a breakdown of the sum insured on different risks. Because of this, the floater is made subject to two conditions of average so that in the event of a claim, the specific insurance […]
Long term agreements
Here, insurers agree to offer premium discounts to an insured who agrees to renew a policy with them for a period of a specified number of years e.g. three to five years. The discount rates vary a but a typical one is five per cent for a period of three years and 7.5 per cent […]
Collective Policies
This is a method of co-insurance and involves number of insurers sharing a risk amongst themselves. Hence many insurers participate on the same risk. A single policy is prepared and the different companies normally described as co- companies are shown in relation to the percentage underwritten by each. The company issuing the policy is called […]
Common Warranties in Fire
The objective of the warranties is to give a brief indication of some of the measures underwriters can use to improve risks in fire insurance Petrol and Mineral Oil clause Hazardous goods clause Safe and books clause Cotton, kapok, sisal, and flax warranty Electrical clause Fire extinguishing appliances warranty
Underwriting Features
Underwriting is the process of accessing a risk and deciding on the terms, conditions, and rate of premium to apply. Rating on the other hand deals with factors that directly relate to premium which is eventually charged by the underwriter. The key underwriting factors and rating factors in fire insurance are: The construction of the […]
Special Perils
Special perils are those perils which are excluded from the standard fire policy but the insurer can provide cover at an extra premium. However, it is becoming increasingly common to issue fire policy with all extensions incorporated thus avoiding the need to issue endorsements. The special perils may be classified into four as follows; Chemical […]
The standard fire policy
The fire policy is one one of the key policies in the protection of assets. Fire may be defined as a chemical reaction which is accompanied by emission of heat and light and generally smoke, the combination of which is usually called smoke, usually a chemical reaction occurs involving change in the material under consideration […]
Sum Insured/Limits of Indemnity
Insurers provide an overall standard limit of indemnity for any one accident. In respect of boilers and pressure plants, the limit will cover the boiler and pressure plant and installation costs with the option of two also include damage to the surrounding property. This extension necessary because some policies exclude such property from damage by […]