PARA 13.2 IC 78, Miscellaneous Insurance One Liner, Chapter-10: Specialized Covers- The New Trend

PARA 13.2 IC 78, Miscellaneous Insurance One Liner, Chapter-10: Specialised Covers- The New Trend

Insurance exams offered by the Insurance Institute of India (III), consist of various papers either in Life or Non Life or Combined. Here we are providing ONE LINER IC 78, Misc Insurance  Chapter 10: Specialized Covers- The New Trend for para 13.2 and III exam . These questions will be very helpful for upcoming promotional exam in 2020.

IC 90, Human Resource Management is a very important topic in insurance promotional exam. This IC 78, miscellaneous insurance paper comes in all GIPSA exams which makes it very important.

The Article IC 78 Chapter 10: Specialised Covers- The New Trend

1. Special contingency policies were issued to risks which were not described or rated under any department.
2. Special contingency policies : They were also issued when a client would like to club covers accorded by two or more departments
3. Cover for machinery / equipment: to cater to the requirements of clients who desired to have all these risks in respect of their machinery and / or equipment or any other property covered under a single policy, insurers issued special contingency policies in the accident department.
4. Special contingency policies : The policy normally does not cover loss or damage caused by:

• War and allied perils and nuclear risks
• Riot, strikes and civil commotion (riot and strikes risks may be covered on payment of additional premium)
• Earthquake, flood and such other convulsions of nature (sometimes covered on payment of additional premium)
• Overloading or strain
• Consequential loss, depreciation, wear and tear or mechanical breakdown

5. A Special Contingency Policy should not be issued with an aim to cover the exclusions under a standard available policy.
6. The rate of premium charged varies from 1 percent to 2 percent of the value of the property to be covered.
7. Total abandonment of an arranged cricket match: This relates to total abandonment of one day cricket match due to specified perils.
8. These perils include fire, lightning, explosion, earthquake, rain, flood storm, riot, strike, malicious damage and terrorist act.
9. The policy covers the actual financial loss suffered by the insured i.e. the organisers.
10. The insured has to establish the extent of loss by submitting an audited account.
11. 11. It is a condition under the policy that no liability will attach even if a single ball is bowled.
12. 12. It should be noted that once a match, commences, subsequent abandonment would not constitute a loss. Similarly, change in venue or postponement of the match does not constitute a claim.
13. 13. It is prescribed that the tickets issued shall contain a stipulation that once a ticket is sold no refund will be allowed. No refund of premium, if the policy is cancelled.
14. The policy seeks to indemnify the insured (organisers) for the non-recoverable expenditure which are incurred.
15. Exclusions: The important exclusions usually applied are

• Loss of profit or consequential loss of any description
• Contractual liability, which would not have attached in the absence of such agreement
• Bad debts or irrecoverable revenue
• Liability for injury to any person or damage to any property
• War and allied perils

16. The policy can also be extended to include liability cover for the organisers in case of injury or death to the spectators of the match, participants of the event, liability to the players/spectators etc.
17. Event insurances like New Year parties, birthday parties, film festivals, beauty contests, orchestras and musical nights etc. are the most sought after insurances today.
18. The coverage normally sought for are as follows.

• Cancellation of event due to accident or illness to the performers
• Cancellation of the event due to specified perils like fire, riot, strike and AOG perils etc
• Liabilities cover for spectators, participants and performers
• “Loss of profit” cover due to cancellation or postponement of the event

18. The sum insured for the basic cover is the amount of non-recoverable expenses incurred by the insured
19. Exposures requiring fire and allied perils cover as well as marine, burglary and theft covers for portable items: All exposures requiring the above covers combined into a single policy, was usually covered under a special contingency or special perils policy. E.g. Laptops, mobiles, film and high value cameras, specialised machinery which needs to be moved from one place to another
20. Identity theft cover: If a person incurs losses due to theft of his identity and fraudulent usage there of, he gets compensated
21. The cover is restricted to a minimum number of hours prior to reporting the loss to the card issuers.
22. The indemnity is limited to the charges made on the debit/credit card in those prescribed number of hours, by the thieves.
23. Identity theft cover Specific exclusions

• Charges more than specified number of hours prior to first reporting the loss of the card
• Charges post reporting the loss of the card
• Cash advances made by card
• Charges incurred by a person whom the card was entrusted to
• Monetary losses unrelated to resolution of identity theft
• Physical injury, sickness, disease, disability, shock, mental anguish and emotional losses
• Any loss which is compensated by any other source e.g. Employer, credit card company etc.

24. Money policy to individuals for withdrawals from ATMs: mLoss of money withdrawn from ATM within a specified time limit due to robbery, injuries and consequent medical expenses incurred due to such robbery can be covered as an extension.
25. Cost of replacement of documents lost during such robbery can also be covered as an extension.
26. Normally, the specific exclusions under the above cover are:

• Cover to cheques, transportation tickets and similar items
• Loss or damage caused by an event other than theft or robbery
• Accidental damage to wallet and items inside
• Fraudulent charges on the lost or stolen payment cards/documents
• Any identity theft related costs caused by lost or stolen personal papers

27. The general exclusions under the above covers are:

• Any kind of illegal act on the part of the insured
• Intentional loss/damage
• War, invasion, act of foreign enemy, civil war, rebellion, terrorism, riot and civil commotion etc
• Loss arising from the order of any Govt. or public authority
• Nuclear perils

28. Kidnap and ransom insurance: This insurance is designed to protect individuals and corporations operating in high-risk areas around the world.
29. K&R insurance policies typically cover the perils of kidnap, extortion, wrongful detention and hijacking.
30. K&R policies are indemnity policies; they reimburse a loss incurred by the insured. The policies do not pay ransoms on the behalf of the insured. The insured must first pay the ransom, thus incurring the loss, and then seek reimbursement under the policy.
31. Losses typically reimbursed by K&R polices are ransom payments, loss-of-ransom-in-transit and additional expenses, such as medical expenses.
32. The policies also typically indemnify personal accident losses caused by a kidnap. These include death, dismemberment, and permanent total disablement of a kidnapped person.
33.  They also pay for the fees and expenses of crisis management consultants. These consultants provide advice to the insured on how best to respond to the incident.
34. Intellectual property insurance: Intellectual property insurance coverage protects companies for patent, copyright or trademark infringement claims arising out of the company’s operation. It pays the defence costs and any judgement up to the policy limits.
35. Patents: The idea of a patent is to give an inventor the right for a time to stop other

companies, or persons trying to make, use or sell an invention, without the expressed permission of the creator/ inventor.

36. A patent is granted by the Government to the inventor, and the invention becomes the property of the inventor. The inventor then has an asset which could be bought, sold or leased.
37. Trademark: Trademark is the distinctive unique identification of one’s organisation, product or service offered.
38. The registration of a trade mark must have the following criteria:

• The trademark must be individually distinctive for the goods or services that are applied for
• The trade mark must not be misleading, break any laws or be in any way immoral
• The trade mark must not be similar or identical to other trademarks regulated for similar goods or services

39. Copyright: There is, in fact, no official register for copyright, it is an unregistered right.
40. A copyright comes into effect as soon as something is on paper, film, sound recording or on the internet etc.
41. The areas that copyright protects are

• Things such as novels, lyrics for songs, software programs and newspaper articles etc
• Original works of music, dance, art, photography, maps, logos and diagrams.
• Broadcasts, films, videos, published works, recordings on any mediums, DVD’s, tapes and CD’s

42. The policies offer cover against the following areas

• Legal expenses to defend rights of the insured
• Legal expenses to enforce such rights
• Legal expenses to defend agreements of the insured
• Damages awarded if defence is unsuccessful
• Expert witness, enquiry and attendance expenses

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