Week 7
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PROPERTY & PECUNIARY INSURANCE WEEK7 PROPERTY & PECUNIARY INSURANCE
ZULFIQAR ALI KHAN
THE STANDARD FIRE POLICY
SINCE 1923 MOST INSURERS OTHER THAN LLOYD’S UNDERWRITERS HAVE EMPLOYED A STANDARD FORM OF POLICY.
THERE IS NO REFERNCE TO INDEMNITY IN THE WORDING; THE UNDERTAKING IS THAT ON THE HAPPENING OF CERTAIN SPECIFIED EVENTS THE INSURER WILL: a.
b.
PAY TO THE INSURED THE VALUE OF THE PROPERTY AT THE TIME OF THE HAPPENING OF ITS DESTRUCTION OR THE AMOUNT OF SUCH DAMAGE, OR AT ITS OPTION WILL REINSTATE OR REPALCE SUCH PROPERTY OR ANY PART THEREOF. ZULFIQAR ALI KHAN
THE STANDARD FIRE POLICY
HERE IT IS TO BE NOTED THAT THE INSURER’S LIABILITY IS DECLARED TO BE LIMITED IN RESPECT OF EACH ITEM TO THE SUM INSURED THEREBY &, IN ALL, TO THE TOTAL SUM INSURED OR ANY SUMS SUBSTITUTED THEREFORE BY ENDORSEMENT. THE LATTER PROVISION IS INSERTED TO PERMIT AN ALTERATION OF AMOUNTS INSURED WITHOUT THE NECESSITY OF ENTERING INTO A NEW CONTRACT. ZULFIQAR ALI KHAN
THE PERILS COVERED
THE PERILS COVERED ARE: a. b. c.
FIRE, OTHER THAN THAT CAUSED BY CERTAIN PERILS AS DETAILED BELOW, LIGHTNING, & EXPLOSION: i. OF BOILERS USED FOR DOMESTIC PURPOSES ONLY, OR ii. IN A BUILDING NOT BEING PART OF ANY GAS WORKS, OF GAS USED FOR DOMESTIC PURPOSES OR USED FOR LIGHTING OR HEATING THE BUILDING.
ZULFIQAR ALI KHAN
THE PERILS COVERED
UNDER b & c IT IS UNNECESSARY FOR FIRE DAMAGE TO BE CAUSED. THE EXPLOSION COVER IS LIMITED & DOES NOT INCLUDE EXPLOSION OF GAS USED IN ANY TRADE PROCESS. ‘DOMESTIC PURPOSES’ IS NOT EASY NORMALLY BUT IMPLIES THAT THE USE OF THE BOILER OR GAS IS FOR A PURPOSE SIMILAR TO THAT MET WITH IN AN ORDINARY HOUSE.
IT HAS BEEN HELD THAT A HOT WATER BOILER USED IN A HOSPITAL FOR PROVIDING HOT WATER FOR KITCHEN USE & WARMING THE WARDS BY MEANS OF RADIATORS IS A BOILER USED FOR DOMESTIC PURPOSES.
ZULFIQAR ALI KHAN
THE PERILS COVERED
FIRE IMPLIES THE ACTUAL IGNITION OF SOMETHING WHICH OUGHT NOT TO BE ON FIRE, & IT MUST BE ACCIDENTAL OR FORTUITOUS SO FAR AS THE INSURED IS CONCERNED. THE FIRE NEED NOT ORIGINATE IN THE INSURED PREMISES, SO THAT IF A FIRE OCCURS IN NEARBY PREMISES & AS A RESULT DAMAGE BY SCORCHING (DRY UP WITH HEAT OR BURNT AT SURFACE) OR BLISTERING (THIN BUBBLE ON THE SKIN) IS CAUSED TO THE INSURED PROPETY, THAT WOULD BE RECOVERABLE UNDER THE POLICY. OTHER CIRCUMSTANCES IN WHICH THE LOSS IS SO CLOSELY CONNECTED WITH THE FIRE THAT IT IS REGARDED AS COVERED BY THE POLICY INCLUDE:
ZULFIQAR ALI KHAN
THE PERILS COVERED
PROPERTY DAMAGED BY WATER OR OTHER EXTINGUISHING AGENTS USED FOR EXTINGUISHMENT PURPOSES; DAMAGE DONE BY THE FIRE BIRGADE IN THE EXECUTION OF ITS DUTIES, FOR EXAMPLE, IN GAINING ACCESS TO A FIRE; PROPERTY BLOWN UP TO PREVENT A FIRE SPREADING; DAMAGE OCCASIONED BY FALLING WALLS OR PARTS OF A BUILDING IN WHICH A FIRE TAKES PLACE; LOSS OF OR DAMAGE TO PROPERTY REMOVED FROM A BURNING CAUSED BY RAIN, THEFT, OR DAAMAGE DURING REMOVAL, PROVIDED THAT THE REMOVAL WAS JUSTIFIED & THAT THE INSURED TAKES STEPS AS SOON AS REASONABLY POSSIBLE TO PROTECT THE REMOVED PROPERTY FROM FURTHER DAMAGE.
ZULFIQAR ALI KHAN
THE EXCEPTED PERILS
IN THE STANDARD FORM THE EXCEPTED PERILS ARE INCORPORATED IN THE OPERATIVE CLAUSE OF THE POLICY.
PURPOSE OF THIS IS TO PLACE THE BURDEN OF PROOF OF LOSS UPON THE INSURED, WHO IS REQUIRED TO PROVE NOT ONLY THAT THE PROPERTY HAS SUSTAINED DAMAGE BY FIRE BUT THAT SUCH DAMAGE IS ‘NOT OCCASIONED BY OR HAPPENING THROUGH’ THE STATED EXCEPTED PERILS. THE EXCEPTED CAUSES OF FIRE ARE AS FOLLOWS:
ZULFIQAR ALI KHAN
THE EXCEPTED PERILS a.
‘ITS OWN SPONTANEOUS FERMENTATION (EXCITED) OR HEATING OR ITS UNDERGOING ANY PROCESS INVOLVING THE APPLICATION OF HEAT’. THE EFFECT OF THE WORD ‘ITS’ IS TO WAIVE THE RULE OF PROXIMATE CAUSE. IF THE WORD WERE NOT SO USED, THE INSURERS WOULD NOT BE LIABLE FOR ANY FIRE CAUSED BY OR RESULTING FROM THE USE OF ANY PROCESS INVOLVING THE APPLICATION OF HEAT TWO EXAMPLES WILL ILLUSTRATE THE PRACTICAL EFFECT: a. A HAYSTACK CATCHES FIRE BY ITS OWN SPONTANEOUS HEATING. THE HAYSTACK ITSELF IS NOT COVERED, BUT IF THE FIRE SPREADS & DAMAGES NEARBY PROPERTY, SUCH FURTHER DAMAGE IS WITHIN THE POLCIY TERMS.
ZULFIQAR ALI KHAN
THE EXCEPTED PERILS GOODS UNDERGOING A HEATING PROCESS IGNITE & THE FIRE SPREADS. THE ONLY PART OFF THE LOSS NOT COVERED IS THAT IN RESPECT OF THE GOODS BEING HEATED. ‘EARTHQUAKE & SUBTERRANEAN (UNDERGROUND) FIRE’. THE RISK FROM THESE CAUSES DEPENDS UPON THE LOCALITY OF THE PREMISES. SUBTERRANEAN FIRE REFERS TO A FIRE OF VOLCANIC ORIGIN, BUT WOULD INCLUDE A FIRE IN A COAL MINE OR AN OIL WELL. ‘RIOT & CIVIL COMMOTION’. IN FIELD V. METROPOLITAN POLICE RECEIVER (1907) IT WAS HELD THAT THE FOLLOWING FIVE ELEMENTS MUST BE PRESENT TO CONSTITUE A RIOT: a.
a.
b.
ZULFIQAR ALI KHAN
THE EXCEPTED PERILS i.
ii. iii.
iv.
v.
THERE MUST BE THREE OR MORE PERSONS ASSEMBLED; THEY MSUT HAVE A COMMON PURPOSE; THERE MUST BE EXECUTION OR INCEPTION OF THE COMMON PURPOSE; THERE MUST BE AN INTENT TO HELP ONE ANOTHER, BY FORCE IF NECESSARY, AGAINST ANY PERSON WHO MAY OPPOSE THEM IN THE EXECUTION OF THE COMMON PURPOSE; & THERE MUST BE FORCE OR VIOLENCE DISPLAYED IN SUCH A MANNER AS TO ALARM AT LEAST ONE PERSON OF REASONABLE FIRMNESS & COURAGE. ZULFIQAR ALI KHAN
THE EXCEPTED PERILS FOR THE PURPOSE OF OBTAINING A RECOVERY UNDER THE RIOT (DAMAGES) ACT 1886, NOT ONLY MUST THE ABOVE FIVE ELEMENTS BE PRESENT BUT THE ASSEMBLY MUST ALSO BE TUMULTUOUS (VIOLENT & CONFUSED EMOTIONS) (J. W. DWYER LTD. V. RECEIVER OF METROPOLITAN POLICE DISTRICT (1967)). CIVIL COMMOTION IS USED TO INDICATE A STATE BETWEEN A RIOT & A CIVIL WAR. IT HAS BEEN DEFINED AS AN INSURRECTION (A RISING) OF THE PEOPLE FRO GENERAL PURPOSES, NOT AMOUNTING TO A REBELLION. THE ELEMENT OF TUMULT OR TURBULENCE (VIOLENTLY DISTURBED) IS ESSENTIAL. a.
‘WAR, CIVIL WAR, & RELATED PERILS’.
ZULFIQAR ALI KHAN
POLICY CONDITIONS
CONDITION 1 – MISREPRESENTATION. THIS IS A MODIFIED STATEMENT OF THE IMPLIED CONDITION OR PRINCIPLE OF THE ‘UTMOST GOOD FAITH’. NOTE THAT THE POLICY IS NOT AUTOMATICALLY AVOIDED BUT IS VOIDABLE AT THE OPTION OF THE INSURERS. CONDITION 2 – ALTERATION. THE POLICY IS AVOIDED ‘WITH RESPECT TO ANY ITEM THEREOF’ … UNLESS THE ALTERATION HAS BEEN PREVIOUSLY AGREED BY THE INSURER. CONDITION 4 – CLAIMS. THIS SETS OUT IN DETAIL THE ACTION TO BE TAKEN BY THE INSURED. IN THE LAST SENTENCE IT IS MADE A CONDITION PRECEDENT TO LIABILITY. THE STATUTORY DECLARATION WHICH THE CONDITION EMPOWERS THE INSURERS TO DEMAND IS SELDOM CALLED FOR BUT WOULD BE OF VALUE TO THE INSURERS IF THEY BELIEVED A CLAIM TO BE FRAUDULENT BUT HAD INSUFFICIENT EVIDENCE. ZULFIQAR ALI KHAN
POLICY CONDITIONS
CONDITION 5 – FRAUD. THIS CONDITON IS CONCERNED ONLY WITH CLAIMS. IF THE INSURED IS REQUIRED TO MAKE A STATUTORY DECLARATION IN ACCORDEANCE WITH CONDITION 4 & THIS LATER PROVES TO BE FALSE HE WILL BE GUILTY OF PRE JURY & LIABLE TO CRIMINAL PROSECUTION. CONDITION 6 – REINSTATEMENT. THIS SETS OUT THE RULES WHICH APPLY IF THE INSURERS EXERCISE THEIR OPTION TO REINSTATE THE DAMAGE. CONDITION 7 – INSURER’S RIGHTS AFTER A FIRE. BY THIS CONDITION, COMMONLY KNOWN AS THE ‘RIGHT OF ENTRY’ CONDITION, THE INSURERS MAY: a. ENTER INTO OR KEEP POSSESSION OF THE BUILDING OR PREMISES WHERE THE DESTRUCTION OR DAMAGE HAS HAPPENED, &
ZULFIQAR ALI KHAN
POLICY CONDITIONS TAKE POSSESSION OF & DEAL WITH GOODS OR PROPERTY IN ANY REASONABLE MANNER. CONDITION 10 – WARRANTIES. THE CONDITION PROVIDES THAT BREACH OF A WARRANTY PERMITS THE INSURER TO AVOID THE POLICY IRRESPECTIVE OF ANY INCREASE IN RISK. a.
ZULFIQAR ALI KHAN
THE EXCLUSION CONDITION
CONDITION 3 OF THE STANDARD FIRE POLICY LISTS CERTAIN PERILS & FORMS OF PROPERTY WHICH ARE EXCLUDED:
EXPLOSION: THIS POLICY DOES NOT COVER DESTRUCTION OR DAMAGE BY EXPLOSION (WHETHER THE EXPLOSION BE OCCASIONED BY FIRE OR OTHERWISE) EXCEPT AS STATED ON THE FACE OF THIS POLICY. EXPLOSION MUST BE CONSIDERED UNDER THREE HEADINGS: III. CONCUSSION (DISTURB OR VIOLENT SHOCK RESULT OF TWO BODIES’ CONTACT) DAMAGE. LOSS CAUSED BY THE FORCE OF THE EXPLOSION, e.g., BROKEN WINDOWS, IS NOT COVERED.
ZULFIQAR ALI KHAN
THE EXCLUSION CONDITION I.
II.
EXPLOSION FOLLOWED BY FIRE. THE PROXIMATE CAUSE OF THE FIRE IS THE EXPLOSION & THE WHOLE OF THE LOSS WOULD BE EXCLUDED. HOWEVER, WHILE THE INSURERS ARE NOT LIABLE FOR THE EXPLOSION DAMAGE, THEY EXPRESSLY ADMIT LIABILITY FOR LOSS BY FIRE FOR, ON THE FACE OF THE POLICY, THEY AGREE TO COVER FIRE DAMAGE ‘WHETHER RESULTING FROM EXPLOSION OR OTHERWISE’. THUS, THE INSURERS AGREE TO WAIVE THE RULE OF PROXIMATE CAUSE. FIRE CAUSING AN EXPLOSION. THE INSURERS ARE LIABLE FOR THE FIRE DAMAGE WHICH OCCURS BOTH BEFORE & AFTER THE EXPLOSION, BUT ARE NOT LIABLE FOR THE LOSS BY EXPLOSION. OBVIOUSLY, SUCH DIFFERENTIATION IS VERY DIFFICULT IN PRACTICE, & OFTEN THE SETTLEMENT OF THE LOSS MUST BE A COMPROMISE. EXPLOSION OF BOILERS USED FOR DOMESTIC PURPOSES ONLY & OF AS IN CERTAIN CIRCUMSTANCES IS COVERED BY THE STANDARD POLICY, & THESE NOTES THEREFORE APPLY ONLY TO ALL OTHER EXPLOSION RISKS.
ZULFIQAR ALI KHAN
THE EXCLUSION CONDITION
RADIOACTIVE CONTAMINATION EXCLUSION CLAUSE: (DISCUSSED BEFORE) EXCLUDED PROPERTY: THIS POLICY DOES NOT COVER GOODS HELD IN TRUST OR ON COMMISSION, MONEY, SECURIITIES, STAMPS, DOCUMENTS, MANUSCRIPTS, BUSINESS BOOKS, COMPUTER SYSTEMS RECORDS, PATTERNS, MODELS, MOULDS, PLANS, DESIGNS, EXPLOSIVES, UNLESS SPECIALLY MENTIONED AS INSURED BY THIS POLICY. THE REASONS FOR THE EXCLUSIONS ARE: 3. THAT THERE MIGHT BE DIFFICULTY IN ASSESSING THE VALUE OF THE EXCLUDED PROPERTY IN THE EVENT OF A CLAIM & 4. TO ENSURE THAT THE SUM INSURED IS ADEQUATELY ADJUSTED IF COVER IS WANTED FOR SOME OR ALL OF THE TYPES OF PROPERTY EXCLUDED BY THE CONDITION.
ZULFIQAR ALI KHAN
THE EXCLUSION CONDITION SPECIAL CONDITIONS ARE THEREFORE IMPOSED, & SOME TIMES THERE ARE SPECIAL LIMITS OF LIABILITY IF COVER IS GRANTED. EXCLUDED PROPERTY OTHER THAN EXPLOSIVES IS USUALLY COVERED BY THE USE OF THE ‘ALL OTHER CONTENTS’ CLAUSE WHICH IS COMMONLY INCORPORATED IN THE DESCRIPTION OF ‘MACHINERY & PLANT’ OF POLCIY SCHEDULES. EXPLOSIVES, IF ISNURABLE AT ALL, CAN BE COVERED ONLY BY SPECIAL ARRANGEMENT & UNDER STRICT SAFEGUARDS. MARINE CLAUSE: DESTRUCTION OF, OR DAMAGE TO, PROPERTY WHICH AT THE TIME OF THE HAPPENING OF SUCH DESTRUCTION OR DAMAGE IS INSURED BY OR WOULD BUT FOR THE EXISTENCE OF THIS POLICY BE INSURED BY ANY MARINE POLICY OR POLICIES, EXCEPT IN RESPECT OF ANY EXCESS BEYOND THE AMOUNT WHICH WOULD HAVE BEEN PAYABLE UNDER THE MARINE POLICY OR POLICIES HAD THIS INSURANCE NOT BEEN EFFECTED.
ZULFIQAR ALI KHAN
THE EXCLUSION CONDITION
THE EFFECT OF THIS CLAUSE IS TO EXCLUDE LIABILITY FOR DAMAGE TO PROPERTY THAT IS ALSO COVERED BY A MARINE POLICY. THE MAIN REASON FOR THE EXCLUSION IS THE DIFFICULTY OF ARRANGING SATISFACTORY CONTRIBUTION BETWEEN FIRE & MARINE POLICIES SINCE THE RANGE, EXTENT & CONDITIONS OF COVER MAY VARY CONSIDERABLY. FURTHER, THERE IS THE POSSIBILITY THAT BEFORE THE FIRE THE GOODS MAY HAVE SUSTAINED UNDISCOVERED & UNDEFINED DAMAGE BY SEA WATER, PILFERAGE (SMALL THEFT) OR OTHER MARINE PERIL, SO THAT IF THE FIRE INSURERS WERE TO PAY FOR THE LOSS THE MARINE UNDERWRITERS WOULD BE RELIEVED OF A LEGITIMATE LIABILITY.
ZULFIQAR ALI KHAN
THE EXCLUSION CONDITION
NORTHERN IRELAND OVERRIDING CLAUSE (DISCUSSED BEFORE).
EXCLUSION
ZULFIQAR ALI KHAN
THE PURCHASER’S INTEREST CLAUSE
IT IS KNOWN VARIOUSLY AS THE PURCHASER’S INTEREST CLAUSE OR THE TRANSFER OF INTEREST CLAUSE: IF AT THE TIME OF DESTRUCTION OR DAMAGE TO ANY BUILDING HEREBY INSURED THE INSURED SHALL HAVE CONTRACTED TO SELL HIS INTEREST IN SUCH BUILDING & THE PURCHASE SHALL NOT HAVE BEEN BUT SHALL BE THEREAFTER COMPLETED, THE PURCHASER ON THE COMPLETION OF THE PURCHASE, IF & SO FAR AS THE PROPERTY IS NOT OTHERWISE INSURED BY OR ON BEHALF OF THE PURCHASER AGAINST SUCH DESTRUCTION OR DAMAGE, SHALL BE ENTITLED TO THE BENEFIT OF THIS POLCIY SO FAR AS IT RELATES TO SUCH DESTRUCTION OR DAMAGE WITHOUT PREJUDICE TO THE RIGHTS & LIABILITIES OF THE INSURED OR THE INSURER UNDER THIS POLICY UP TO THE DATE OF COMPLETION.
ZULFIQAR ALI KHAN
THE PURCHASER’S INTEREST CLAUSE
IN THE CASE OF A CONTRACT FOR THE SALE OF PROPERTY, WHICH IS INSURED BY THE VENDOR, IF A FIRE TAKES PLACE BETWEEN THE DATE OF THE CONTRACT & COMPLETION, THE PURCHASER IS ENTITLED TO THE BENEFIT OF THE PROCEEDS OF THE POLICY. THIS CLAUSE ONLY APPLIES TO BUILDINGS.
ZULFIQAR ALI KHAN
LLOYD’S FIRE POLICY
LLOYD’S FIRE POLICY IS A SHORTER & PERHAPS SIMPLER FORM THAN THE STANDARD POLICY. IT DECLARES THAT THE UNDERWRITERS WILL MAKE GOOD TO THE ISNURED, OR TO HIS EXECUTORS, ADMINISTRATORS, & ASSIGNS, LOSS OR DAMAGE AS COVERED BY THE POLICY & SUSTAINED BY THE SUBJECT-MATTER OF INSURANCE. PERILS INSURED AGAINST ARE:
FIRE &/OR LIGHTNING;
FIRE CONSEQUENT UPON EXPLOSION WHEREVER THE EXPLOSION OCCURS; EXPLOSION CONSEQUENT ON FIRE ON THE PREMISES INSURED; EXPLOSION OF DOMESTIC BOILERS OR OF GAS USED FOR DOMESTIC PURPOSES OR FOR LIGHTING OR HEATING THE BUILDING.
ZULFIQAR ALI KHAN
LLOYD’S FIRE POLICY
IN ADDITION TO APPLIED CONDITIONS FOLLOWING CONDITIONS ARE APPLICABLE: EXCLUSIONS: RIOT & CIVIL COMMOTION, KINDRED (RELATED) PERILS, RADIOACTIVE CONTAMINATION, EXPLOSIVE NUCLEAR ASSEMBLIES, & WAR RISKS AS DETAILED IN THE STANDARD FORM. FRAUD: THE COVER IS STATED TO BE VOID IF THE INSURED KNOWINGLY MAKES ANY FALSE OR FRAUDULENT CLAIM. THE ELECTRICAL CLAUSE: THIS RELIEVES THE UNDERWRITERS OF LIABILITY FOR DESTRUCTION OR DAMAGE TO ELECTRICAL PLANT OR CONDUCTORS CAUSED BY ABNORMAL CURRENTS OR SELF-HEATING. DAMAGE CAUSED BY THE FIRE SPREADING TO OTHER INSURED PROPERTY IS COVERED.
ZULFIQAR ALI KHAN
FIRE POLICIES ON PRIVATE DWELLINGS
STANDARD FIRE POLICY IS NOT USED FOR THE INSURANCE OF PRIVATE DWELLING HOUSES. SCOPE & WORDING OF FIRE POLICIES ON PRIVATE HOUSES VARIES; NOT ONLY ARE ADDITIONAL PERILS INCLUDED, BUT ALSO FOR CONTENTS THE WORDING IS FRAMED TO GIVE COVER UP TO 15% OF THE SUM INSURED BEYOND THE INSURED’S OWN DWELLING, & PROPERTY BELONGING TO DOMESTIC SERVANTS & MEMBERS OF THE INSURED’S OWN FAMILY PERMANENTLY RESIDING WITH HIM IS INLCUDED. IN ADDITION, POLICIES ON THE BUILDINGS OF PRIVATE HOUSES INCLUDE THE BUILDINGS OF DETACHED DOMESTIC OUTBUILDINGS & WALLS, GATES & FENCES IN ONE AMOUNT WITH THE HOUSE, WITHOUT AVERAGE.
ZULFIQAR ALI KHAN
FIRE POLICIES ON PRIVATE DWELLINGS 2.
3. 4. 5. 6.
THE PERILS COVERED BY A TYPICLA POLICY OF THIS KIND WOULD INCLUDE: FIRE, INCLUDING FIRE DIRECTLY CAUSED BY: i. RIOT OR CIVIL COMMOTION (BUT EXCLUDING ALL SUCH DESTRUCTION OR DAMAGE CAUSED IN IRELAND & NORTHERN IRELAND); ii. EXPLOSION; iii. EARTHQUAKE; iv. AIRCRAFT & OTHER AERIAL DEVICES OR ARTICLES DROPPED THEREFROM; v. SPONTANEOUS FERMENTATION, HEATING OR COMBUSTION; LIGHTNING; EXPLOSION; EARTHQUAKE SHOCK; SUBTERRANEAN FIRE.
ZULFIQAR ALI KHAN
FIRE POLICIES ON PRIVATE DWELLINGS
IT IS NOW RARE FOR THE FOR BUILDINGS OR CONTENTS OF A PRIVATE DWELLING TO BE COVERED BY A POLICY OF THIS NATURE BECAUSE INSURERS ARE WILLING TO GRANT POLICIES OF MUCH WIDER SCOPE.
ZULFIQAR ALI KHAN
COLLECTIVE POLICIES
THESE REPRESENT A METHOD OF COINSURANCE WHEREBY A SUBSTANTIAL INSURANCE IS SHARED BETWEEN A NUMBER OF DIFFERENT INSURANCE COMPANIES.
A SINGLE POLICY IS PREPARED & THE DIFFERENT COMPANIES (DESCRIBED IN THE DOCUMENT AS COINSURERS) ARE SHOWN IN RELATION TO THE PERCENTAGES UNDERWRITTEN BY EACH. LIABILITY IS SEVERAL & NOT JOINT ie EACH INSURER IS RESPONSIBLE ONLY FOR ITS AGREED PERCENTAGE OF ANY LOSS WHICH MAY BE SETTLED UNDER THE INSURANCE. A SIGNING SLIP IS SENT BY EACH INSURER TO THE ‘LEADING OFFICE’, THAT BEING THE INSURER WITH THE LARGEST PERCENTAGE.
ZULFIQAR ALI KHAN
COLLECTIVE POLICIES
LEADING OFFICE PREPARES POLICY ON BEHALF OF ALL THE INSURERS. IN ADDITION TO HE ECONOMY IN POLICY PREPARATION TWO FURTHER ADVANTAGES ARE: ONLY ONE SET OF RENEWAL PAPERS IS NEEDED, & EACH ENDORSEMENT IS DEALT WITH BY THE LEADING OFFICE, WHICH PREPARES ONLY ONE DOCUMENT FOR ALL THE INSURERS. LLOYD’S UNDERWRITERS NOT SUBSCRIBE DIRECTLY TO A COLLECTIVE POLICY & IF A PERCENTAGE OF THE INSURANCE IS PLACED AT LLOYD’S A SEPARATE LLOYD’S POLICY WILL BE ISSUED FOR THIS. ZULFIQAR ALI KHAN
THE ESCALATOR CLAUSE
AN AUTOMATIC INCREASE IN THE SUM INSURED MAY IN CERTAIN CIRCUMSTANCES, & SUBJECT OT AN ADDITIONAL PREMIUM, BE AVAILABLE TO COUNTER TO SOME EXTENT THE EFFECT OF INFLATION. AN ANNUAL RATE OF INCREASE OF UP TO 20% IS CHOSEN BY INSURED. THE CLAUSE STATES THAT DURING THE PERIOD OF INSURANCE THE SUM INSURED SHALL BE INCREASED BY THAT PROPORTION OF THE SPECIFIED PERCENTAGE WHICH THE NUMBER OF DAYS SINCE THE COMMENCEMENT OF SUCH PERIOD SHALL BEAR TO THE WHOLE OF SUCH PERIOD. THUS, SUM INSURED INCREASES PROGRESSIVLEY DURING THE PERIOD OF INSURANCE.
ZULFIQAR ALI KHAN
THE ESCALATOR CLAUSE
AVAILABLE TO BUILDING & CONTENTS INSURANCES, BUT IT IS NOT AVAILABLE FOR THE INSRUANCE OF STOCK, AS THIS IS CATERED FOR BY A DECLARATION POLICY.
ZULFIQAR ALI KHAN
ZULFIQAR ALI KHAN
THE STANDARD FIRE POLICY
SINCE 1923 MOST INSURERS OTHER THAN LLOYD’S UNDERWRITERS HAVE EMPLOYED A STANDARD FORM OF POLICY.
THERE IS NO REFERNCE TO INDEMNITY IN THE WORDING; THE UNDERTAKING IS THAT ON THE HAPPENING OF CERTAIN SPECIFIED EVENTS THE INSURER WILL: a.
b.
PAY TO THE INSURED THE VALUE OF THE PROPERTY AT THE TIME OF THE HAPPENING OF ITS DESTRUCTION OR THE AMOUNT OF SUCH DAMAGE, OR AT ITS OPTION WILL REINSTATE OR REPALCE SUCH PROPERTY OR ANY PART THEREOF. ZULFIQAR ALI KHAN
THE STANDARD FIRE POLICY
HERE IT IS TO BE NOTED THAT THE INSURER’S LIABILITY IS DECLARED TO BE LIMITED IN RESPECT OF EACH ITEM TO THE SUM INSURED THEREBY &, IN ALL, TO THE TOTAL SUM INSURED OR ANY SUMS SUBSTITUTED THEREFORE BY ENDORSEMENT. THE LATTER PROVISION IS INSERTED TO PERMIT AN ALTERATION OF AMOUNTS INSURED WITHOUT THE NECESSITY OF ENTERING INTO A NEW CONTRACT. ZULFIQAR ALI KHAN
THE PERILS COVERED
THE PERILS COVERED ARE: a. b. c.
FIRE, OTHER THAN THAT CAUSED BY CERTAIN PERILS AS DETAILED BELOW, LIGHTNING, & EXPLOSION: i. OF BOILERS USED FOR DOMESTIC PURPOSES ONLY, OR ii. IN A BUILDING NOT BEING PART OF ANY GAS WORKS, OF GAS USED FOR DOMESTIC PURPOSES OR USED FOR LIGHTING OR HEATING THE BUILDING.
ZULFIQAR ALI KHAN
THE PERILS COVERED
UNDER b & c IT IS UNNECESSARY FOR FIRE DAMAGE TO BE CAUSED. THE EXPLOSION COVER IS LIMITED & DOES NOT INCLUDE EXPLOSION OF GAS USED IN ANY TRADE PROCESS. ‘DOMESTIC PURPOSES’ IS NOT EASY NORMALLY BUT IMPLIES THAT THE USE OF THE BOILER OR GAS IS FOR A PURPOSE SIMILAR TO THAT MET WITH IN AN ORDINARY HOUSE.
IT HAS BEEN HELD THAT A HOT WATER BOILER USED IN A HOSPITAL FOR PROVIDING HOT WATER FOR KITCHEN USE & WARMING THE WARDS BY MEANS OF RADIATORS IS A BOILER USED FOR DOMESTIC PURPOSES.
ZULFIQAR ALI KHAN
THE PERILS COVERED
FIRE IMPLIES THE ACTUAL IGNITION OF SOMETHING WHICH OUGHT NOT TO BE ON FIRE, & IT MUST BE ACCIDENTAL OR FORTUITOUS SO FAR AS THE INSURED IS CONCERNED. THE FIRE NEED NOT ORIGINATE IN THE INSURED PREMISES, SO THAT IF A FIRE OCCURS IN NEARBY PREMISES & AS A RESULT DAMAGE BY SCORCHING (DRY UP WITH HEAT OR BURNT AT SURFACE) OR BLISTERING (THIN BUBBLE ON THE SKIN) IS CAUSED TO THE INSURED PROPETY, THAT WOULD BE RECOVERABLE UNDER THE POLICY. OTHER CIRCUMSTANCES IN WHICH THE LOSS IS SO CLOSELY CONNECTED WITH THE FIRE THAT IT IS REGARDED AS COVERED BY THE POLICY INCLUDE:
ZULFIQAR ALI KHAN
THE PERILS COVERED
PROPERTY DAMAGED BY WATER OR OTHER EXTINGUISHING AGENTS USED FOR EXTINGUISHMENT PURPOSES; DAMAGE DONE BY THE FIRE BIRGADE IN THE EXECUTION OF ITS DUTIES, FOR EXAMPLE, IN GAINING ACCESS TO A FIRE; PROPERTY BLOWN UP TO PREVENT A FIRE SPREADING; DAMAGE OCCASIONED BY FALLING WALLS OR PARTS OF A BUILDING IN WHICH A FIRE TAKES PLACE; LOSS OF OR DAMAGE TO PROPERTY REMOVED FROM A BURNING CAUSED BY RAIN, THEFT, OR DAAMAGE DURING REMOVAL, PROVIDED THAT THE REMOVAL WAS JUSTIFIED & THAT THE INSURED TAKES STEPS AS SOON AS REASONABLY POSSIBLE TO PROTECT THE REMOVED PROPERTY FROM FURTHER DAMAGE.
ZULFIQAR ALI KHAN
THE EXCEPTED PERILS
IN THE STANDARD FORM THE EXCEPTED PERILS ARE INCORPORATED IN THE OPERATIVE CLAUSE OF THE POLICY.
PURPOSE OF THIS IS TO PLACE THE BURDEN OF PROOF OF LOSS UPON THE INSURED, WHO IS REQUIRED TO PROVE NOT ONLY THAT THE PROPERTY HAS SUSTAINED DAMAGE BY FIRE BUT THAT SUCH DAMAGE IS ‘NOT OCCASIONED BY OR HAPPENING THROUGH’ THE STATED EXCEPTED PERILS. THE EXCEPTED CAUSES OF FIRE ARE AS FOLLOWS:
ZULFIQAR ALI KHAN
THE EXCEPTED PERILS a.
‘ITS OWN SPONTANEOUS FERMENTATION (EXCITED) OR HEATING OR ITS UNDERGOING ANY PROCESS INVOLVING THE APPLICATION OF HEAT’. THE EFFECT OF THE WORD ‘ITS’ IS TO WAIVE THE RULE OF PROXIMATE CAUSE. IF THE WORD WERE NOT SO USED, THE INSURERS WOULD NOT BE LIABLE FOR ANY FIRE CAUSED BY OR RESULTING FROM THE USE OF ANY PROCESS INVOLVING THE APPLICATION OF HEAT TWO EXAMPLES WILL ILLUSTRATE THE PRACTICAL EFFECT: a. A HAYSTACK CATCHES FIRE BY ITS OWN SPONTANEOUS HEATING. THE HAYSTACK ITSELF IS NOT COVERED, BUT IF THE FIRE SPREADS & DAMAGES NEARBY PROPERTY, SUCH FURTHER DAMAGE IS WITHIN THE POLCIY TERMS.
ZULFIQAR ALI KHAN
THE EXCEPTED PERILS GOODS UNDERGOING A HEATING PROCESS IGNITE & THE FIRE SPREADS. THE ONLY PART OFF THE LOSS NOT COVERED IS THAT IN RESPECT OF THE GOODS BEING HEATED. ‘EARTHQUAKE & SUBTERRANEAN (UNDERGROUND) FIRE’. THE RISK FROM THESE CAUSES DEPENDS UPON THE LOCALITY OF THE PREMISES. SUBTERRANEAN FIRE REFERS TO A FIRE OF VOLCANIC ORIGIN, BUT WOULD INCLUDE A FIRE IN A COAL MINE OR AN OIL WELL. ‘RIOT & CIVIL COMMOTION’. IN FIELD V. METROPOLITAN POLICE RECEIVER (1907) IT WAS HELD THAT THE FOLLOWING FIVE ELEMENTS MUST BE PRESENT TO CONSTITUE A RIOT: a.
a.
b.
ZULFIQAR ALI KHAN
THE EXCEPTED PERILS i.
ii. iii.
iv.
v.
THERE MUST BE THREE OR MORE PERSONS ASSEMBLED; THEY MSUT HAVE A COMMON PURPOSE; THERE MUST BE EXECUTION OR INCEPTION OF THE COMMON PURPOSE; THERE MUST BE AN INTENT TO HELP ONE ANOTHER, BY FORCE IF NECESSARY, AGAINST ANY PERSON WHO MAY OPPOSE THEM IN THE EXECUTION OF THE COMMON PURPOSE; & THERE MUST BE FORCE OR VIOLENCE DISPLAYED IN SUCH A MANNER AS TO ALARM AT LEAST ONE PERSON OF REASONABLE FIRMNESS & COURAGE. ZULFIQAR ALI KHAN
THE EXCEPTED PERILS FOR THE PURPOSE OF OBTAINING A RECOVERY UNDER THE RIOT (DAMAGES) ACT 1886, NOT ONLY MUST THE ABOVE FIVE ELEMENTS BE PRESENT BUT THE ASSEMBLY MUST ALSO BE TUMULTUOUS (VIOLENT & CONFUSED EMOTIONS) (J. W. DWYER LTD. V. RECEIVER OF METROPOLITAN POLICE DISTRICT (1967)). CIVIL COMMOTION IS USED TO INDICATE A STATE BETWEEN A RIOT & A CIVIL WAR. IT HAS BEEN DEFINED AS AN INSURRECTION (A RISING) OF THE PEOPLE FRO GENERAL PURPOSES, NOT AMOUNTING TO A REBELLION. THE ELEMENT OF TUMULT OR TURBULENCE (VIOLENTLY DISTURBED) IS ESSENTIAL. a.
‘WAR, CIVIL WAR, & RELATED PERILS’.
ZULFIQAR ALI KHAN
POLICY CONDITIONS
CONDITION 1 – MISREPRESENTATION. THIS IS A MODIFIED STATEMENT OF THE IMPLIED CONDITION OR PRINCIPLE OF THE ‘UTMOST GOOD FAITH’. NOTE THAT THE POLICY IS NOT AUTOMATICALLY AVOIDED BUT IS VOIDABLE AT THE OPTION OF THE INSURERS. CONDITION 2 – ALTERATION. THE POLICY IS AVOIDED ‘WITH RESPECT TO ANY ITEM THEREOF’ … UNLESS THE ALTERATION HAS BEEN PREVIOUSLY AGREED BY THE INSURER. CONDITION 4 – CLAIMS. THIS SETS OUT IN DETAIL THE ACTION TO BE TAKEN BY THE INSURED. IN THE LAST SENTENCE IT IS MADE A CONDITION PRECEDENT TO LIABILITY. THE STATUTORY DECLARATION WHICH THE CONDITION EMPOWERS THE INSURERS TO DEMAND IS SELDOM CALLED FOR BUT WOULD BE OF VALUE TO THE INSURERS IF THEY BELIEVED A CLAIM TO BE FRAUDULENT BUT HAD INSUFFICIENT EVIDENCE. ZULFIQAR ALI KHAN
POLICY CONDITIONS
CONDITION 5 – FRAUD. THIS CONDITON IS CONCERNED ONLY WITH CLAIMS. IF THE INSURED IS REQUIRED TO MAKE A STATUTORY DECLARATION IN ACCORDEANCE WITH CONDITION 4 & THIS LATER PROVES TO BE FALSE HE WILL BE GUILTY OF PRE JURY & LIABLE TO CRIMINAL PROSECUTION. CONDITION 6 – REINSTATEMENT. THIS SETS OUT THE RULES WHICH APPLY IF THE INSURERS EXERCISE THEIR OPTION TO REINSTATE THE DAMAGE. CONDITION 7 – INSURER’S RIGHTS AFTER A FIRE. BY THIS CONDITION, COMMONLY KNOWN AS THE ‘RIGHT OF ENTRY’ CONDITION, THE INSURERS MAY: a. ENTER INTO OR KEEP POSSESSION OF THE BUILDING OR PREMISES WHERE THE DESTRUCTION OR DAMAGE HAS HAPPENED, &
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POLICY CONDITIONS TAKE POSSESSION OF & DEAL WITH GOODS OR PROPERTY IN ANY REASONABLE MANNER. CONDITION 10 – WARRANTIES. THE CONDITION PROVIDES THAT BREACH OF A WARRANTY PERMITS THE INSURER TO AVOID THE POLICY IRRESPECTIVE OF ANY INCREASE IN RISK. a.
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THE EXCLUSION CONDITION
CONDITION 3 OF THE STANDARD FIRE POLICY LISTS CERTAIN PERILS & FORMS OF PROPERTY WHICH ARE EXCLUDED:
EXPLOSION: THIS POLICY DOES NOT COVER DESTRUCTION OR DAMAGE BY EXPLOSION (WHETHER THE EXPLOSION BE OCCASIONED BY FIRE OR OTHERWISE) EXCEPT AS STATED ON THE FACE OF THIS POLICY. EXPLOSION MUST BE CONSIDERED UNDER THREE HEADINGS: III. CONCUSSION (DISTURB OR VIOLENT SHOCK RESULT OF TWO BODIES’ CONTACT) DAMAGE. LOSS CAUSED BY THE FORCE OF THE EXPLOSION, e.g., BROKEN WINDOWS, IS NOT COVERED.
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THE EXCLUSION CONDITION I.
II.
EXPLOSION FOLLOWED BY FIRE. THE PROXIMATE CAUSE OF THE FIRE IS THE EXPLOSION & THE WHOLE OF THE LOSS WOULD BE EXCLUDED. HOWEVER, WHILE THE INSURERS ARE NOT LIABLE FOR THE EXPLOSION DAMAGE, THEY EXPRESSLY ADMIT LIABILITY FOR LOSS BY FIRE FOR, ON THE FACE OF THE POLICY, THEY AGREE TO COVER FIRE DAMAGE ‘WHETHER RESULTING FROM EXPLOSION OR OTHERWISE’. THUS, THE INSURERS AGREE TO WAIVE THE RULE OF PROXIMATE CAUSE. FIRE CAUSING AN EXPLOSION. THE INSURERS ARE LIABLE FOR THE FIRE DAMAGE WHICH OCCURS BOTH BEFORE & AFTER THE EXPLOSION, BUT ARE NOT LIABLE FOR THE LOSS BY EXPLOSION. OBVIOUSLY, SUCH DIFFERENTIATION IS VERY DIFFICULT IN PRACTICE, & OFTEN THE SETTLEMENT OF THE LOSS MUST BE A COMPROMISE. EXPLOSION OF BOILERS USED FOR DOMESTIC PURPOSES ONLY & OF AS IN CERTAIN CIRCUMSTANCES IS COVERED BY THE STANDARD POLICY, & THESE NOTES THEREFORE APPLY ONLY TO ALL OTHER EXPLOSION RISKS.
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THE EXCLUSION CONDITION
RADIOACTIVE CONTAMINATION EXCLUSION CLAUSE: (DISCUSSED BEFORE) EXCLUDED PROPERTY: THIS POLICY DOES NOT COVER GOODS HELD IN TRUST OR ON COMMISSION, MONEY, SECURIITIES, STAMPS, DOCUMENTS, MANUSCRIPTS, BUSINESS BOOKS, COMPUTER SYSTEMS RECORDS, PATTERNS, MODELS, MOULDS, PLANS, DESIGNS, EXPLOSIVES, UNLESS SPECIALLY MENTIONED AS INSURED BY THIS POLICY. THE REASONS FOR THE EXCLUSIONS ARE: 3. THAT THERE MIGHT BE DIFFICULTY IN ASSESSING THE VALUE OF THE EXCLUDED PROPERTY IN THE EVENT OF A CLAIM & 4. TO ENSURE THAT THE SUM INSURED IS ADEQUATELY ADJUSTED IF COVER IS WANTED FOR SOME OR ALL OF THE TYPES OF PROPERTY EXCLUDED BY THE CONDITION.
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THE EXCLUSION CONDITION SPECIAL CONDITIONS ARE THEREFORE IMPOSED, & SOME TIMES THERE ARE SPECIAL LIMITS OF LIABILITY IF COVER IS GRANTED. EXCLUDED PROPERTY OTHER THAN EXPLOSIVES IS USUALLY COVERED BY THE USE OF THE ‘ALL OTHER CONTENTS’ CLAUSE WHICH IS COMMONLY INCORPORATED IN THE DESCRIPTION OF ‘MACHINERY & PLANT’ OF POLCIY SCHEDULES. EXPLOSIVES, IF ISNURABLE AT ALL, CAN BE COVERED ONLY BY SPECIAL ARRANGEMENT & UNDER STRICT SAFEGUARDS. MARINE CLAUSE: DESTRUCTION OF, OR DAMAGE TO, PROPERTY WHICH AT THE TIME OF THE HAPPENING OF SUCH DESTRUCTION OR DAMAGE IS INSURED BY OR WOULD BUT FOR THE EXISTENCE OF THIS POLICY BE INSURED BY ANY MARINE POLICY OR POLICIES, EXCEPT IN RESPECT OF ANY EXCESS BEYOND THE AMOUNT WHICH WOULD HAVE BEEN PAYABLE UNDER THE MARINE POLICY OR POLICIES HAD THIS INSURANCE NOT BEEN EFFECTED.
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THE EXCLUSION CONDITION
THE EFFECT OF THIS CLAUSE IS TO EXCLUDE LIABILITY FOR DAMAGE TO PROPERTY THAT IS ALSO COVERED BY A MARINE POLICY. THE MAIN REASON FOR THE EXCLUSION IS THE DIFFICULTY OF ARRANGING SATISFACTORY CONTRIBUTION BETWEEN FIRE & MARINE POLICIES SINCE THE RANGE, EXTENT & CONDITIONS OF COVER MAY VARY CONSIDERABLY. FURTHER, THERE IS THE POSSIBILITY THAT BEFORE THE FIRE THE GOODS MAY HAVE SUSTAINED UNDISCOVERED & UNDEFINED DAMAGE BY SEA WATER, PILFERAGE (SMALL THEFT) OR OTHER MARINE PERIL, SO THAT IF THE FIRE INSURERS WERE TO PAY FOR THE LOSS THE MARINE UNDERWRITERS WOULD BE RELIEVED OF A LEGITIMATE LIABILITY.
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THE EXCLUSION CONDITION
NORTHERN IRELAND OVERRIDING CLAUSE (DISCUSSED BEFORE).
EXCLUSION
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THE PURCHASER’S INTEREST CLAUSE
IT IS KNOWN VARIOUSLY AS THE PURCHASER’S INTEREST CLAUSE OR THE TRANSFER OF INTEREST CLAUSE: IF AT THE TIME OF DESTRUCTION OR DAMAGE TO ANY BUILDING HEREBY INSURED THE INSURED SHALL HAVE CONTRACTED TO SELL HIS INTEREST IN SUCH BUILDING & THE PURCHASE SHALL NOT HAVE BEEN BUT SHALL BE THEREAFTER COMPLETED, THE PURCHASER ON THE COMPLETION OF THE PURCHASE, IF & SO FAR AS THE PROPERTY IS NOT OTHERWISE INSURED BY OR ON BEHALF OF THE PURCHASER AGAINST SUCH DESTRUCTION OR DAMAGE, SHALL BE ENTITLED TO THE BENEFIT OF THIS POLCIY SO FAR AS IT RELATES TO SUCH DESTRUCTION OR DAMAGE WITHOUT PREJUDICE TO THE RIGHTS & LIABILITIES OF THE INSURED OR THE INSURER UNDER THIS POLICY UP TO THE DATE OF COMPLETION.
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THE PURCHASER’S INTEREST CLAUSE
IN THE CASE OF A CONTRACT FOR THE SALE OF PROPERTY, WHICH IS INSURED BY THE VENDOR, IF A FIRE TAKES PLACE BETWEEN THE DATE OF THE CONTRACT & COMPLETION, THE PURCHASER IS ENTITLED TO THE BENEFIT OF THE PROCEEDS OF THE POLICY. THIS CLAUSE ONLY APPLIES TO BUILDINGS.
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LLOYD’S FIRE POLICY
LLOYD’S FIRE POLICY IS A SHORTER & PERHAPS SIMPLER FORM THAN THE STANDARD POLICY. IT DECLARES THAT THE UNDERWRITERS WILL MAKE GOOD TO THE ISNURED, OR TO HIS EXECUTORS, ADMINISTRATORS, & ASSIGNS, LOSS OR DAMAGE AS COVERED BY THE POLICY & SUSTAINED BY THE SUBJECT-MATTER OF INSURANCE. PERILS INSURED AGAINST ARE:
FIRE &/OR LIGHTNING;
FIRE CONSEQUENT UPON EXPLOSION WHEREVER THE EXPLOSION OCCURS; EXPLOSION CONSEQUENT ON FIRE ON THE PREMISES INSURED; EXPLOSION OF DOMESTIC BOILERS OR OF GAS USED FOR DOMESTIC PURPOSES OR FOR LIGHTING OR HEATING THE BUILDING.
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LLOYD’S FIRE POLICY
IN ADDITION TO APPLIED CONDITIONS FOLLOWING CONDITIONS ARE APPLICABLE: EXCLUSIONS: RIOT & CIVIL COMMOTION, KINDRED (RELATED) PERILS, RADIOACTIVE CONTAMINATION, EXPLOSIVE NUCLEAR ASSEMBLIES, & WAR RISKS AS DETAILED IN THE STANDARD FORM. FRAUD: THE COVER IS STATED TO BE VOID IF THE INSURED KNOWINGLY MAKES ANY FALSE OR FRAUDULENT CLAIM. THE ELECTRICAL CLAUSE: THIS RELIEVES THE UNDERWRITERS OF LIABILITY FOR DESTRUCTION OR DAMAGE TO ELECTRICAL PLANT OR CONDUCTORS CAUSED BY ABNORMAL CURRENTS OR SELF-HEATING. DAMAGE CAUSED BY THE FIRE SPREADING TO OTHER INSURED PROPERTY IS COVERED.
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FIRE POLICIES ON PRIVATE DWELLINGS
STANDARD FIRE POLICY IS NOT USED FOR THE INSURANCE OF PRIVATE DWELLING HOUSES. SCOPE & WORDING OF FIRE POLICIES ON PRIVATE HOUSES VARIES; NOT ONLY ARE ADDITIONAL PERILS INCLUDED, BUT ALSO FOR CONTENTS THE WORDING IS FRAMED TO GIVE COVER UP TO 15% OF THE SUM INSURED BEYOND THE INSURED’S OWN DWELLING, & PROPERTY BELONGING TO DOMESTIC SERVANTS & MEMBERS OF THE INSURED’S OWN FAMILY PERMANENTLY RESIDING WITH HIM IS INLCUDED. IN ADDITION, POLICIES ON THE BUILDINGS OF PRIVATE HOUSES INCLUDE THE BUILDINGS OF DETACHED DOMESTIC OUTBUILDINGS & WALLS, GATES & FENCES IN ONE AMOUNT WITH THE HOUSE, WITHOUT AVERAGE.
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FIRE POLICIES ON PRIVATE DWELLINGS 2.
3. 4. 5. 6.
THE PERILS COVERED BY A TYPICLA POLICY OF THIS KIND WOULD INCLUDE: FIRE, INCLUDING FIRE DIRECTLY CAUSED BY: i. RIOT OR CIVIL COMMOTION (BUT EXCLUDING ALL SUCH DESTRUCTION OR DAMAGE CAUSED IN IRELAND & NORTHERN IRELAND); ii. EXPLOSION; iii. EARTHQUAKE; iv. AIRCRAFT & OTHER AERIAL DEVICES OR ARTICLES DROPPED THEREFROM; v. SPONTANEOUS FERMENTATION, HEATING OR COMBUSTION; LIGHTNING; EXPLOSION; EARTHQUAKE SHOCK; SUBTERRANEAN FIRE.
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FIRE POLICIES ON PRIVATE DWELLINGS
IT IS NOW RARE FOR THE FOR BUILDINGS OR CONTENTS OF A PRIVATE DWELLING TO BE COVERED BY A POLICY OF THIS NATURE BECAUSE INSURERS ARE WILLING TO GRANT POLICIES OF MUCH WIDER SCOPE.
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COLLECTIVE POLICIES
THESE REPRESENT A METHOD OF COINSURANCE WHEREBY A SUBSTANTIAL INSURANCE IS SHARED BETWEEN A NUMBER OF DIFFERENT INSURANCE COMPANIES.
A SINGLE POLICY IS PREPARED & THE DIFFERENT COMPANIES (DESCRIBED IN THE DOCUMENT AS COINSURERS) ARE SHOWN IN RELATION TO THE PERCENTAGES UNDERWRITTEN BY EACH. LIABILITY IS SEVERAL & NOT JOINT ie EACH INSURER IS RESPONSIBLE ONLY FOR ITS AGREED PERCENTAGE OF ANY LOSS WHICH MAY BE SETTLED UNDER THE INSURANCE. A SIGNING SLIP IS SENT BY EACH INSURER TO THE ‘LEADING OFFICE’, THAT BEING THE INSURER WITH THE LARGEST PERCENTAGE.
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COLLECTIVE POLICIES
LEADING OFFICE PREPARES POLICY ON BEHALF OF ALL THE INSURERS. IN ADDITION TO HE ECONOMY IN POLICY PREPARATION TWO FURTHER ADVANTAGES ARE: ONLY ONE SET OF RENEWAL PAPERS IS NEEDED, & EACH ENDORSEMENT IS DEALT WITH BY THE LEADING OFFICE, WHICH PREPARES ONLY ONE DOCUMENT FOR ALL THE INSURERS. LLOYD’S UNDERWRITERS NOT SUBSCRIBE DIRECTLY TO A COLLECTIVE POLICY & IF A PERCENTAGE OF THE INSURANCE IS PLACED AT LLOYD’S A SEPARATE LLOYD’S POLICY WILL BE ISSUED FOR THIS. ZULFIQAR ALI KHAN
THE ESCALATOR CLAUSE
AN AUTOMATIC INCREASE IN THE SUM INSURED MAY IN CERTAIN CIRCUMSTANCES, & SUBJECT OT AN ADDITIONAL PREMIUM, BE AVAILABLE TO COUNTER TO SOME EXTENT THE EFFECT OF INFLATION. AN ANNUAL RATE OF INCREASE OF UP TO 20% IS CHOSEN BY INSURED. THE CLAUSE STATES THAT DURING THE PERIOD OF INSURANCE THE SUM INSURED SHALL BE INCREASED BY THAT PROPORTION OF THE SPECIFIED PERCENTAGE WHICH THE NUMBER OF DAYS SINCE THE COMMENCEMENT OF SUCH PERIOD SHALL BEAR TO THE WHOLE OF SUCH PERIOD. THUS, SUM INSURED INCREASES PROGRESSIVLEY DURING THE PERIOD OF INSURANCE.
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THE ESCALATOR CLAUSE
AVAILABLE TO BUILDING & CONTENTS INSURANCES, BUT IT IS NOT AVAILABLE FOR THE INSRUANCE OF STOCK, AS THIS IS CATERED FOR BY A DECLARATION POLICY.
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