HOW MANY TYPES OF FIRE POLICY CONDITIONS

 Policy conditions are simply provisions of an  insurance policy  which along with the  insuring agreement  and exclusions  complete the contract. The conditions may be precedent to the contract, conditions subsequent to the contract and conditions precedent to liability . The conditions must be complied  with to make the insurer liable under the contract . The conditions may or may not be  incorporated in the policy. The conditions which are not mentioned in the policy are known as Implied  conditions. The implied conditions are utmost good faith, insurable interest  and indemnity. On the contrary, the conditions which are set out in the policy are known as Express Conditions which may be either of general  nature and therefore , printed on the policy or conditions specially designed with reference  to a particular  contract  and are incorporated in the policy. 

The following  are the express conditions printed on the Standard policy form. 

 (1) MISDESCRIPTION : (condition I) : As per this condition there should be no misdescription  or mis representation or non  disclosure of the material facts as regards the subject  matter is concerned. Otherwise the policy be voidable at the option of the insurer. The condition stresses the proposer’s  duty to reveal all material facts at the time of making proposal. What is material and what is not material will depend  upon the circumstances of particular  case. Generally a fact  is said to be material if it affects the judgement  of the insurer after its disclosure . Some questions raised in the proposal from such as information  relating to past losses sustained on the property refusal for renewal or payment of claim by any other insurer or the involvement  of the insured in a  hazardous occupation etc. are considered as material.

 This condition is in accordance with the principle of equity  in as much as it protects the insurer if it is subsequently discovered  that the insurance. has been obtained through  an inaccurate statement on the part of the insured.  This is obvious because the insurer in deciding whether a risk should be accepted  and the rate of premium to be charged  has regards to the facts disclosed  by the proposer. Even if they misdescription  affects a part only  the whole and renders it untenable. 

  (2)  PAYMENT  OF PREMIUM CONDITION-2: No payment in respect  of premium shall be deemed unless  a printed form of receipt for the same has been given to the insured. The condition says about the proof of premium payments   (a) Premium be paid, (b) Form of printed  receipt be obtained, ( C ) it should  be signed by  an official  or agent of the company, Unless premiums  is paid in advance no risk is covered.  (3) OTHER INSURANCES  (CONDITION-3) (4) COLLAPSE OF BUILDING  CONDITION-4: According  to this condition the insurance cover is automatically cancelled  in the event of collapse of the building or of any important  part of the building if it goes to change the original  risk. The fall or  displacement may subject the building or its contents  to an   increased risk of fire. The insurance cover is not cancelled if they collapse  is covered by fire . The responsibility to prove falls  on the insured

TYPES OF MARINE INSURANCE

   (1) HULL INSURANCE: The term “HULL” refers to the frame or body of the ship or vessel and its machinery  . As the ship/ vessel/ hull moves from the one part to mother and it may be subject to marine perils, hence  insurance is effected against the risks. There are a number of classification  of vessel  such as a ocean steamers, sailing vessel etc. The  hull  insurance policies are generally issued  for 12 months . The hull policies provide the cover for the hull and machinery  as well as in report of materials and outfit and stores and provision  for the officers and crew . In addition, cover for liabilities is included. The hull policy consists of the basic policy form to which clauses are  attached. The clauses are a known as “ Institute clauses” and are drafted by the institute of London Underwrites which is an association  representing the marine  insurance companies  and Lloyds” underwriting  operating  in London. These clauses  are adopted by the General Insurance Industry in India. The cover is provided by the Institute Times Clauses (Hull) and the risk covered are maritime perils such as fire collision stranding Etc., 

 Additional perils not of a maritime nature are also covered. Some examples are damage to hull caused by latent defect in machinery  accidents in loading or discharging cargo etc., The Institute  Time clauses (Hull ) includes a clauses  known as Running Down Clauses which extends the hull policy  to provide cover to the shipowner in respect of his liability  for damage caused to the another ship in a  collision as a consequence of negligent navigation.  Hull policies are also available to cover (1) loss of freight I.e.,  earnings derivable by a  shipowner for the employment of his a  ship and (2) disbursements I. e , amount spent by him in fitting out the vessel including provisions   and a stores. Hull policies are also issued to cover vessels in course of constructions . These policies are taken by the ship builder . The vessels are insured from the laying of the keel until completion of trails leading to the delivery  of the ship to its owners.  Hull  insurance also includes the following insurances: (1) Inland vessels such as a barges launches, passengers, vessels etc., (2) Dredgers ( merchandised or non-mechanised) .

3) Fishing   vessels  ( merchandised or non-mechanised) . (4) Sailing vessels ( merchandised or

non-merchandised) . (5) Jetties and wharves.    2.   CARGO INSURANCE: Cargo means the good or merchandise  commodities carried in a ship in the course of shipment. When the goods or cargo transported  from the port of the departure of the port of destination, forms the subject  matter of  insurance. This policy  may be arranged for the duration of a voyage or as time policies or open policies or on other basis. As in hull  insurance, the basic cover (I.e . in respect  of maritime perils) is provided by the Standard marine policy. In practice the cover is much the Institute Cargo clauses attached to the policy. However from 31st march 1983, the Lloyd’s  S.G. Policy form the  has been replaced by the a new simplified policy which  contains particulars such as a name of the insured, details of vessels , voyage,  goods insured sum insured,  premium etc.,

 The risks covered under the cargo is  policies  an  are incorporated in the revised institute Cargo clauses (A), (B), and  ( C ).    (1)  INSTITUTE CARGO CLAUSE ( C ): This cover is provided for loss or damage to cargo due to  (a) Fire or explosion, (b) Standing  grounding  sinking of the vessel or craft: ( c )  Overturning or derailment of vehicle . (d) Collision or contract of vessel or conveyance  with an external object  (e) discharge of cargo at port of distress: (f) General average and Salvage charges and  (g) Jettisoning.  (2). institute cargo clauses (B): In additional to the losses covered under clauses ( C ) Sling loss

I, e, total of any package lost or dropped during loading or unloading and (d) entry of sea, lake or river water.  (3)  INSTITUTE CARGO CLAUSE (A): The cover is on a All risks basis and thus covers all physical loss or

SETTLEMENTS OF CLAIMS UNDER MOTOR INSURANCE

 The claims arise under motos insurance are divided  into two classes i.e. claim for own damages  and claims for third liability.  (A) CLAIMS FOR OWN DAMAGES: Own Damages arise which damage to the vehicle  is caused by the insured. These damaged  are generally caused by collision or over running of the vehicle. The settlement of claims for own damage is done in three phases, namely preliminary scrutiny  assessment of loss and settlement.  

 (a) PRELIMINARY SCRUTINY:  Immediately on occurrences of any accident or loss of or  a damage to the vehicle, the  insured has to serve a notice of a loss of the insurer. On receiving  the notice, the insurer will check his records to find out whether policy is in force or discontinued . Later, the loss is entered in claims  register and a claims form is sent to the insured to be filled up by him and to be returned  to the insurer. The insured is asked to give all  relevant   particulars in the claim form such as a date and time of accident cause of accident extent of damage to the vehicle  etc. The insured is also required to submit a detailed  estimate of repairs from any repairer of his choice. The insurer generally accepts the estimates. But at times he  asks for another estimate , Insurer does with this when it doubts the competence  moral hazard or business integrity of repairer first chosen.

  (b) ASSESSMENT: The insurer employs independent  automobile surveyors  to ascertain the cause of the accident and extent of loss sustained by the insured. The surveyors  are supplied a copy of a the policy , the claim form and repairer’s  estimate. They inspect the damage vehicle, discuss the cost of the repair or replacement with repairer and submit their survey report. In case of minor damage claims independent   surveyors is not appointed. The officials  of insurance company or its engineer inspect  and finalise the claim  report. 

 ( C ) SETTLEMENT: The surveyors  report is taken as a basis for settlements of claims. The report is examined  thoroughly  and settlements is made according to the recommendations  in the report. The usual practice is to authorize repairer. The repair receives a later from the insurer. The repairer will be given payment after completion  of repairs. The insured has go to give a satisfactions  note or voucher that he is hundred  percent satisfied with the repairs. In case the cost of repair paid by the insured, the latter can recover the amount from the insurer. For reimbursement of cost of the repair the insured has to produce  the letter receive from the repairer  with the insurer as an evidence for payment of cost of repair. Finally the insurer will pay the claim for cost of repair.

  (B)  CLAIMS  FOR THIRD PARTY LIABILITY: The third party liability arises  when a motor vehicle hurts a third party so as to cause damage to his property or his death or a personal  injury  to him. For settlement claims for third party liability the following procedure is generally adopted:  (1) ENTRY OF NOTICE:  As soon as the notice of claim is received  from any: the insured the third party, or the Motor Accidents Claims Tribunal (MACT)  the same will be entered in Claims Register. Date of intimation, claim number , Policy number data of accident. Vehicle number . MACT  number . Name of Insured, Driver and claimant, amount claimed etc are entered in the Claim Register. Separate sections are maintained in the register for fatal claims and bodily injury  claims

RISK MANAGEMENT AND ITS EVOLUTION

These techniques range from carrying a talisman or a lucky dollar to fortune tellers and star readers and ultimately to the multinational  financial  behemoths of insurance companies. Most business  in the past centuries have transformed some of their risks to insurance companies in exchange for a premium. Insurance companies in their search for  more business and more profits have hired  agents and brokers to sell more of their products  to more clients in exchange for a sizeable commission. It is only when business owners realized that the coast  of this distribution system and its inherent conflict  of interest did not work to their  advantage that the discipline  of risk management  came into its own right. The conflict  of interest comes from the fact that agents and brokers are paid by the insurance companies  to produce sales. Consequently they only solve risk problems through more insurance sales and  then only solve those that are problems.  that fit the available  products  of the insurance company ( ies ) they represent.    Risk management  as a discipline  is an objective look at all the risks a  business faces, evaluating  them, prioritizing them and solving them . For example providing protective footwear to your employees may be a much more practical  and cost effective manner to solve your problem than buying insurance for such risk.

With this realization and the ever increasing  demands from better educate  consumers and employees the business brought the management of their risk In house. They hired and trained professionals  who were on the payroll of the company rather than commission   driven marketing people to handle all aspects of their risks. When the broker industry saw their  business disappear they reacted by consolidating  ferociously  and repositioning  themselves  very often as risk consultants A professional  risk manager should be completely  independent from the insurance industry in order to be able to provide advice  and solutions which are in the best interest  of those they serve. This can be obtained by either bringing  the service  In house or hiring  consultants on a fee for service basis. Any risk manager worth their “Cup Of Tea”  should be able to earth this fee back for their employer client in a short time by improved protection and lower insurance costs.  The risk and insurance management Society based in New York is one of the most prestigious international organizations  in this field advocating the above principles. It celebrated its 50th Anniversary  this year. Their annual convention gathers some 15,000 people active in the international risk management business.

  DEFINATION OF RISK MANAGEMENT:  (1) CUMBRIA COUNTY COUNCIL: “Risk management is a continuous process involving there current cycle of identifying   hazards and that lead to the risks occuring analyzing  the risk of an event and its profiling the risk in a respect of likelihood and impact controlling  the risk through action planning outcomes and monitoring the effectiveness of the control measures.  (ESSENTIALS OF RISK MANAGEMENT: The above definitions have brought to light a few essentials of an effective risk management . They are as a following:  (1) Risk must be identified before they can be measured and only after their impact  has been evaluated  can we decide on the most effective method of control. (2) The method of risk control should be economic . There are is no in spending Rs. 1,00,000 to control a risk which can only cost rs. 50,000, There will always be a point where spending on risk  control has to stop,  (3) The assets of the organization can be physical or human they are both important and risk management  must be seen to have a part to play in a  both . However risks do not strike at a sets but also play earning capacity of the enterprise.  (4) The principle of risk management  are just as applicable in the services sector as they are in the manufacturing  sector
and are of the equal  importance in the public and private sectors of the economy.

BENEFITS OFRISK MANAGEMENT: The following are some of the key gains from risk management “ (1) Reduces losses and costs due to risks. (2) Helps in anticipating problems before they impact a business . (3) Enhance profits.  (4) Eases out uncertainty by proactive systematic methods. (5) Ensures stability and target achievements. (6) Avoids litigation by taking preventive steps. (7) Improves efficiency in the organizations  by weeding out unplanned events and consequent loss of time and money.  (8) Improves  decision  making by understanding and systematic study of volatility and the opportunities  there from.  RISK MANAGEMENT PROCESS: The process risk management  can be broken into five steps, namely:  (1) Setting the objectives of risk management . (2) Risk Identification. (3( Risk Impact analysis-evaluation or estimation (4) Risk Strategy
(a) Risk Reduction and avoidance. (b) Risk transfer. ( C ) Risk retention