Non Life Insurance-Credit and Risk Managment-Lecture Notes, Study notes of Credit and Risk Management

Download Non Life Insurance-Credit and Risk Managment-Lecture Notes and more Study notes Credit and Risk Management in PDF only on Docsity! LECTURE – 44 NON-LIFE INSURANCE Policies Sold by Non-life Insurance Companies Classification of Non-life Insurance • Based on purchaser – Personal lines – Commercial lines • Based on the Object – Property – Liability • OECD Property Insurance Policies • Nature and property – Real (immovable) vs. personal (movable) properties – Tangible vs. intangible properties • Property losses – Direct loss • Reductions in property values caused by a loss event – Consequential (indirect) losses • Reductions in income or increases in expenses that result from direct losses • Nature of covered perils – Named-peril policy • Indemnification to the insured only if the cause of loss is “named as covered” – All risks policy – by exclusion • Basic form – Named-peril coverage for damage • Broad form – Broader coverage than the basic form • Special form – All-risks coverage for damage (with exclusion) • Nature of indemnification – Actual cash value (ACV) Replacement cost less depreciation in value – Replacement cost (reinstatement value) At the time of loss to replace the property with the same kind of like-kind – Economic (use value) of property Lost of utility associated with damaged property – Market value Property Insurance Policies – Common Aspects • Pricing – Characteristics of the covered property, such as construction, occupancy, protection, exposure and location (for Fire Insurance, Public Liability) – Scope of insurance requested – Limit of insurance along with • Deductible, coinsurance, and other optional coverages Property Insurance Policies – Types • Package policies / multi-line policies docsity.com – Cover both direct and indirect property exposures plus – financial obligations and – legal expenses arising from the insured’s legal liability for injuries to others or damage to their property. – e.g. Homeowner policy Property Insurance Policies – Types • Fire insurance – Cover 2 perils: fire. Lighting • Commercial property insurance – For large business, both movable and immovable business property • Consequential loss insurance (business income insurance) – For specific indirect losses form an insured peril • Industrial all-risk insurance (special risk insurance) – All-risk contracts of high-value movable and immovable properties • Contractors’ (builders) all-risk insurance (CAR) – For damage during the course of construction • Boiler and machinery – For the direct physical losses from an explosion • Fidelity/crime insurance – for employee dishonesty & Criminal acts – Fidelity bond/ insurance – Computer fraud insurance – Employee dishonesty – Extortion – Forgery or alteration – Theft and robbery • Insurance for self-propelled property – Insurance for motor vehicles – covering the direct loss of or damage to their vessels – Insurance for ships – when the term “marine insurance” is used, the policy provides both hull insurance and insurance on the vessel’s cargo. – Insurance for aircraft – for damage to the aircraft, its equipment, its cargo • Insurance for property being transported – Cargo insurance – from the departure to the final destination (international trade, risk of cargo) – Insurance for transportable property – including items worn, carried from place to place, temporarily removed Liability Insurance Policies • General (public) liability insurance – All-risks coverage for individuals and organizations for their tortuous actions • Automobile (motor) liability insurance – Cover insureds’ legal liability to third party • Product liability insurance – Pay claims on behalf of the insured made by third party (desperately needed in China) Package Insurance Policies • Workers’ compensation insurance – Employer’s liability insurance – Civil law, Labor law, others? • Professional liability insurance – Errors and omissions insurance docsity.com