Insuring Property and Liability Risks 2^nd Edition

Table of Contents

Chapter 1 - Why Do We Have Insurance?	1
Why is There a Need for Insurance?	1
What is Risk?	1
Liability Facts and Figures Premium Dollars: A Certain Loss	4 5
Insurance Takes Away the Worry Making the Policy Practical	6
Standardization Became Necessary The Standard Fire Policy	6 8
In Conclusion	13
Chapter 2 - Understanding the Impossible	14
Four Basic Parts in the Fire Insurance Form	14
Declarations	15
The Insuring Agreements	16
When is the Policy Effective?	17
Binders	17
Canceling the Policy Credit Scoring	19 22
What are the Principle Concepts of Insurance?	23
Indemnity	23
Insurable Interest	24
Example	25
Using the Mortgage Clause	26
When Negligence or Neglect is a Factor Lender’s Responsibility	26 27
Proportional Payments	27
When More Than One Mortgage Exists	28
In Conclusion	29
Chapter 3 - Liability Limitations	30
Insuring for Logical Amounts	30
Actual Cash Value	31
Repair or Replace?	33
Policy Language has Specific Meanings (Doctrine of Proximate Cause)	34
In Conclusion	35
Chapter 4 - When Multiple Policies Exist	36
Who Pays What?	37
Companies That Are Not Able to Pay	38
“Other Insurance” Alternatives	38
Non-Concurrent Policies	39
What Happens When Claimants Refuse the Offer?	40
Chapter 5 - Insurance Does Not Always Pay Everything	42
How Coinsurance Works	44
Why Would a Policyholder Want Coinsurance?	46
Small Versus Large Property Owners	48
Coinsurance History Consumer Distrust	48 49
Coinsurance Variety	50
Deductibles Why Are Deductibles Used?	51 51
Straight Deductibles     Convertible Deductibles	52 52
Cumulative and Participating Deductibles     Franchise Deductibles	53 53
Progressively Diminishing Deductibles To Recap	53 55
Loss Limitation Clauses Pro Rata Distribution clause	56 56
In Closing	57
Chapter 6 - What Are We Insuring Against?	58
Perils Defining the Losses	58 58
Loss and Damage by Fire	59
Lightning Removal of Goods	61 62
Exceptions	64
Arson	65
Coverage for Fire Department Charges Debris Removal	66 66
Exceptions to Payment	67
Peril Expansion	69
Extended Coverage Endorsement	70
How the Deductible Applies	70
Windstorm and Hail	71
Beach Plans	72
Explosion	72
Riot and Civil Commotion	73
Aircraft & Vehicles	74
Smoke	74
The Apportionment Clause	75
Joint Loss The Optional Perils Endorsement	76 77
Vandalism & Malicious Mischief Endorsement	77
Earthquake & Volcanic Eruption Insurance	78
Automatic Sprinkler Coverage	80
Water Damage	81
Flood Insurance	82
Chapter 7 - Fire Insurance Forms	85
Putting the Policy Together	85
Policy Forms	86
Residential Policy Forms - Dwelling Forms Dwelling and Contents Form	87 87
Dwelling Coverage	88
Contents Coverage	89
Dwelling and Contents Broad Form	91
Replacement Cost Coverage Dwelling Buildings Special Form	91 92
Dwelling Policy Program	92
Commercial Forms	94
Property Covered - Coverage A – Buildings	94
Coverage B – Personal Property of the Insured	94
Coverage C – Personal Property of Others	94
It Does Not Cover Everything	95
Extensions of Coverage	95
How is the Policy Arranged?	98
Is the Policyholder Adequately Insured?	98
Chapter 8 - Marine Insurance	100
What is Marine Insurance? Is There a Standard Marine Policy?	100 100
Classifying Marine Policies	101
First Group: Loss or Damage to Conveyances	101
Second Group: “Port Risk Only” Policies	102
Third Group: Fleet Policies	103
Fourth Group: “Full Form” and “Total Loss Only” Policies	104
Fifth Group: Hull Policies Adapted to the Type of Vessel	104
Liability Protection	104
Class 1 - Collision	104
Class 2 - Protection and Indemnity Insurance policies	105
Class 3 - Excess Protection and Indemnity Insurance	105
Class 4 - Water Pollution	106
Chapter 9 - Marine Insurance Marketing	107
Cost, Coverage, and Sales Rates: A judgment Call	107 107
Client Evaluation	108
Hull Rates	109
Cargo Rates	110
Considering Past Performance International Competition Pleasure Boats	111 111 111
Yacht Hull Coverage	112
Other Coverage for Yachts	113
First Coverage - Protection and Indemnity Insurance	113
Second Coverage - Federal Compensation Insurance	114
Third Coverage - Medical Payments Insurance	114
Reading the Yacht Policy	114
Outboard Policies	115
Chapter 10 - Inland Marine Insurance	116
Goods in Transit Why is it Called “Inland Marine” Insurance?	116 116
Growth of the Inland Marine Insurance Industry	116
Nationwide Marine Definition	118
Inland Marine Insurance Characteristics	120
All-Risks Protection	121
Excessive Hazard Property Normally Covered by Other Insurance	122 122
Wear and Tear	122
Dampness or Extremes of Temperature	123
Carelessness of the Insured Carelessness of Others	123 123
Mysterious Disappearance	123
Infidelity (a Disloyal Act) Artificially Generated Electricity	124 124
Earthquake and Flood War, Acts of War, and Nuclear Reaction	124 124
Underwriting: Moral and Morale Hazards	124
Assignment The Person or Entity Requesting Coverage	125 125
Imports and Exports (Categories A and B)	125
Domestic Shipments (Category C)	125
Transportation Policies	127
Parcel Post and Registered Mail Policies	128
Registered Mail Policy	129
First Class Mail Policy	129
Other Forms: Armored Car and Messenger Policy	130
Motor Truck Cargo Insurance	130
Public Trucker’s Legal Liability Forms	131
Means of Communication Coverage	131
Chapter 11 - Risks & Protection	132
Personal Property Floater Risks	133
Scheduled and Unscheduled Floaters	132
Standard Provisions	132
Terminology of the Personal Property Floater	133
Floaters: Personal Property Floater	135
Personal Effects Floater	137
Personal Articles Floater	138
Government Service Floater	139
Snowmobile Floater Policy	139
Nearly Anything is Possible	140
Commercial Property Floater Risks	140
Livestock Floater	141
Accounts Receivable Insurance	142
Valuable Papers & Records Insurance	142
Floor Plan Merchandise Policy	143
Signs and Street Clocks Form	143
Dealer’s Block Insurance	144
Electronic Data Processing	145
Chapter 12 - Consequential Loss Insurance	147
Loss of Business	147
Business Interruption Insurance COVID-19 and Loss of Business Loss of Earnings in Normal Times	147 148 150
A Separate and Specific Policy	150
Describing the Property	151
Indemnity Period	152
Forms	153
Gross Earnings Form	154
The Agreed Amount Endorsement	155
Premium Adjustment Endorsement	155
Extended Period of Indemnity	156
Deferred Loss Payment Endorsement	157
Payroll Endorsements	157
Simplified Earnings Forms	157
Contingent Business-Interruption Insurance	158
An Earnings Form of Business Interruption Insurance	159
Extra Expense Insurance: Business Interruption Means Loss of Business	160
Business Income Coverage Form	161
Policy Definitions	162
Individual Consequential Loss Insurance	163
Rent insurance	163
Forms Coinsurance	164 165
Period of indemnity Rates Additional Living Expense	165 165 166
Leasehold Insurance	166
Recovering Profit Losses	168
Chapter 13 - Boiler and Machinery/Glass Insurance	169
Boiler and Machinery Insurance Premium	169 170
Inspection Services	170
Application for Coverage	171
Direct-Damage Policy	172
Primarily Property Coverage	175
Exclusions	176
Endorsements Business Interruption Endorsement	177 177
Extra Expense Insurance	179
Combined Business Interruption and Extra Expense	179
Consequential Damage Insurance Utility Interruption	179 180
Glass Insurance	180
Chapter 14 - Insurance Ethics	182
What Ethical Agents Know	182
Insurance Perceptions	182
Establishing Ethical Goals	184
Why Be Ethical?	187
Following the Law	188
Ethics in the Workplace	189
Ethics Are the Same Regardless of the Name Used	190
Understanding How the Past Affects the Future	192
Companies Set Ethical Guidelines	196
Promoting Ethical Behavior	200
An Ethical Theory: Egoism	203
Is it possible to teach ethical behavior to other people?	204
What is the scope of ethics?	204
What does it take to be a moral person?	206
What quality of work does the individual want to perform?	207
What is the legacy desired?	207
Who Determines Ethics?	208
What are an individual’s responsibilities to other moral people?	210
The Theory of Objectivist Ethics	212
Holding an Ethical Code	214
Looking Professional	221
Courtesy	222
Mores	222
Measuring the Ethical Values of Others	227
General Education and State Mandated Continuing Education	228
Getting Education in a Timely Manner	229
Laying Out Policy Benefits and Limitations	231
Policy Replacement	234
When Agents Allow Misconceptions	236
When the Premiums Seem Too High to the Client	237
Obtaining Proper Application Signatures	237
Keeping in Touch After the Sale	238
Selling the “Fast Buck” Items	239
Commingling Funds	240
Professional Investment Advisors	240
Preparing for Tomorrow	241
Fixed and Variable Income Vehicles	241
Financial Management	242
Due Diligence	243
Due Diligence Technical Versus Common-Sense Approach	246
To Recap	247
Public Images	252
Selecting Insurers to Represent	253
Does Legal Automatically Mean Ethical Too?	253
Chapter 15 – Course Review	257
Chapter 1	257
Chapter 2	257
Chapter 3	258
Chapter 4	258
Chapter 5	259
Chapter 6	259
Chapter 7	260
Chapter 8	261
Chapter 9	261
Chapter 10	262
Chapter 11	262
Chapter 12	263
Chapter 13	264
Chapter 14	275

United Insurance Educators, Inc.

PO Box 1030

Eatonville, WA 98328

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