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Business insurance

11.04.2014

Business insurance

Property insurance

Building and property coverage

FLEXA + EC

ALL RISKS

Crime

Burglary

Robbery and holdup

Damage to a building

caused by a burglary

Indirect lossess (BI)

liability insurance

Business liability

insurance

Mandatory

Voluntary

Employer’s insurance

D&O

Land vehicle

insurance

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Property insurance

1. List of buildings
2. Location of the buildings with full address
3. The value of the premises (book value /

replecment value)

4. Terms of fire and burlary protection (

early

warning systems, fire extinguisher, smoke vents,
hydrants

)

5. Scope of protection
6. The list of lossess from at least 3-5 years
7. Scope of protection
8. Additiona clauses
9. Deductibles and excess

Commercial general liability

 policy basically provides coverage against legal liability exposures

of a business unless specifically excluded.

 legal defense costs, are typically also covered.
 policy may cover:

„ ...bodily injury and/or property damage on the premises of a
business, when someone is injured as the result of using the product
manufactured or distributed by a business or when someone is
injured in the general operation of a business

 all risk but with many clauses covering excluded risks

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Voluntary

Pollution

liabiity

coverage

Premisses

and operation

Conduct of business

operations as a hotel

Product

liability

Contigent

Liability

Contractual

Liability

Directors&

Officers

Voluntary

caused by vehicles

not subject to

registration

liability for loss or

damage to items

brought by guests

caused during participation

in trade fairs, shows and

exhibitions

arising out of the operation

of water and sewer facilities

and central heating

due to the transfer of

infectious diseases

and infections

resulting in movables, of which an

insured person under a lease, rent,

use, lend, lease or other agreement

of a similar nature

employer's liability

for the

consequences of

accidents at work

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Premises and Operations

liability arising out of the ownership and maintenance of the premises;
premises should be maintained in a safe condition;
operations connected with business on or off the premises (construction worker on a high-rise

building may drop a tool that injuries a pedestrian..)

Product liability insurance

 for manufacturing firms and importers, wholesalers
 covers losses which originate from defects in conception, design, manufacture or storage of the

product or (not very often) from improper use by the consumer.

 liability is triggered by the defective nature of products, not by their hazardous characteristics.
 usually determined strictly by law – no fault in US, in EU – clause of consistency with the law,

knowledge, science and technical rules

 Insurance for product recall and product integrity reimburses the expenses that are incurred by

the recall of faulty products, thus reducing the risk of accidents and related product liability

claims.

Directors and officers liability insurance

covers the consequences of violations of the duty to exercise care on the
part of the members of the board of directors, supervisory boards or
management
this type of policy protects against certain types of claims from:
• shareholders who suffer investment losses
• workers claims in case of violation of their rights, discrimination,

harassment

• other entities

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Business Interruption Insurance

 covers the loss of income:

profits that would have been earned (based on prior months' financial

statements);

operating expenses and other costs still being incurred by the property

(based on historical costs)

extra expenses for moving to and operating from a temporary location - some

policies

reimbursement for reasonable expenses (beyond the fixed costs) that allow

the business to continue operation while the property is being repaired

 is not sold as a stand-alone policy, always added into property

insurance policy

Credit insurance

protects against the risk of loss arising from a customer default

most common forms:

 general insolvency,
 export credit,
 repayment of instalments

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guarantee insurance

• the written obligation of the insurer to pay to the beneficiary a

specified amount of guarantee in the event that the contracted entity
has not fulfilled its contractual obligations.

• Most common forms:

guarantee of repayment of custom duties,
 tender guarantee
guarantee of advanced payment refund,
guarantee of proper fulfilment of the contract,
guarantee of timely removal of defects and faults

Debtor

Beneficiary

Insurance company

Insurance
policy

application

premium

contract

guarantee

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Insurance vs. guarantee

Insurance

Guarantee

Economic construction of an
agreement

Protection against loss, risk resulting from economic
processes

Protection against lack of occurence of particular event

Legal construction of an agreement

Customer/Principal – pays insurance premium
Insurer – pays indemnity

Customer/Principal – pays commission
Insurer – pays guarantee sum

Risk management

Subject of insurance is insured against random events,
which he isn’t responsible for

Supported entity shall not be exempted from liability for the
emergence of adverse effects

Subjects’ relations

2 parties involved, 1 privity;
beneficiary shall bear the financial burden of paying the
insurance premiums

3 parties involved ana 3 privities;
beneficiary shall not bear the financial burden of paying the
insurance premiums

Moment of protection

After the payment of the premium

Since signing the contract, even if the payment hasn’t been
paid yet

Type of protection

Always conditional

Conditional or unconditional

Responsibility

Distribution of responsibility (odpowiedzialność
repartycyjna)

Individual’s responsibility

Amount of benefits

Limited indemnity

Unlimited indemnity, guarantee covers the loss