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Lecture Risk management and insurance - Lecture No 18: Fundamental legal principles

This chapter’s objectives are to: Explain how the simplified commercial lines portfolio policy meets property loss exposures, identify property and perils covered by boiler and machinery insurance, describe how insurance contracts can be designed to insure property that fluctuates in value, list the different types of consequential loss exposures and types of insurance coverage available for such loss exposures. | Fundamental Legal Principles Lecture No. 18 1 2 Chapter Objectives Explain how the Simplified Commercial Lines Portfolio policy meets property loss exposures Identify property and perils covered by boiler and machinery insurance Describe how insurance contracts can be designed to insure property that fluctuates in value List the different types of consequential loss exposures and types of insurance coverage available for such loss exposures 3 Insuring Agreements Loss to property Perhaps the chief reason for the purchase of boiler and machinery insurance is either to Replace damaged property belonging to the insured in the event of sudden or accidental loss Or to prevent the occurrence of such a loss Expediting expenses The reasonable extra cost of expediting repair of the machinery Including overtime costs and the extra cost of express or other rapid means of transportation 4 Optional Endorsements Business income insurance One of the important types of loss stemming from the failure . | Fundamental Legal Principles Lecture No. 18 1 2 Chapter Objectives Explain how the Simplified Commercial Lines Portfolio policy meets property loss exposures Identify property and perils covered by boiler and machinery insurance Describe how insurance contracts can be designed to insure property that fluctuates in value List the different types of consequential loss exposures and types of insurance coverage available for such loss exposures 3 Insuring Agreements Loss to property Perhaps the chief reason for the purchase of boiler and machinery insurance is either to Replace damaged property belonging to the insured in the event of sudden or accidental loss Or to prevent the occurrence of such a loss Expediting expenses The reasonable extra cost of expediting repair of the machinery Including overtime costs and the extra cost of express or other rapid means of transportation 4 Optional Endorsements Business income insurance One of the important types of loss stemming from the failure of the steam boiler or other vital machinery Is the shutdown of an entire plant Use and occupancy insurance is commonly added by endorsement to the boiler and machinery contract Extra expense Could arise from the failure of a heating plant boiler Forcing a business to install temporary alternative methods of heating at considerable expense Consequential damage Provides protection when an interruption of power is due to failure of an insured object on the insured’s own premises 5 Business Owners Policy Designed for certain small- to medium-sized businesses Small- to medium-sized is defined to mean Apartments and office buildings of less than six stories and with a total area of less than 100,000 square feet A standalone policy and cannot be added to the CPP 6 Business Owners Policy Property forms used Standard and special Mandatory coverage exists for both direct and indirect loss to property, liability, and medical payments Options include outdoor signs, money and securities, employee .