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M is also for
Complex industrial plant and simple office machinery can be insured not only for fire and allied perils, but also for any accidental damage including mechanical or electrical derangement. Such cover is usually subject to certain levels of maintenance being maintained and is almost certainly subject to a significant deductible. For industrial plant business interruption following breakdown is also usually insured.
The Maintenance Period is the period following completion of a construction project during which the contractor is responsible for certain maintenance issues under the many building or engineering contracts. During this period, the contractor needs to maintain insurance in force, the extent of which will depend on the contract and on his own concern for the risk he is facing. Normally the maintenance period will last for twelve months from the completion of the contract but this may be longer or shorter. Differing levels of cover are available (visits maintenance, extended maintenance guarantee maintenance) depending upon the specifics of the particular contract.
See ‘Additional Peril’ under a Fire policy. Cover against malicious damage provides cover against damage caused by ‘malicious persons’ and is usually only available as part of a riot and strike extension.
Engineers, architects, lawyers, accountants, insurance brokers and the like carry professional indemnity or errors and omission insurance. Doctors, nurses, surgeons and hospitals require the same type of cover, but refer to it as malpractice insurance.
Marine insurance refers to much more than the insurance of ships. The insurance market tends to divide into three areas: Life, Marine and Non-Marine. Marine insurance will include the insurance of hulls, the cargo they carry, liabilities that may devolve upon ships and ship operators, known as “protection and indemnity” and also the insurance of wharves, ports and harbours, container terminals and even oil platforms and drilling rigs.
All Business Interruption policies contain a requirement that a Material Damage policy remains in force at all times to protect the property, which is the subject of the business interruption policy. This is usually a Fire policy, an Industrial All Risks policy or a machinery breakdown policy. This is to ensure that in the event of a loss, funds are available to repair the damage and thus minimise the period during which the business will be interrupted. It is important to note that as a result of the material damage proviso, older style wordings may exclude cover under a business interruption policy where the material damage falls below the material damage deductible. Special care is needed and we recommend strongly that your insurance experts, Trafalgar International be consulted.
The principle of “utmost good faith” requires anyone seeking insurance to disclose all the material facts about the risk that he knows, or should know. A material fact has been defined in a number of legal cases and broadly is “any fact which may influence the judgement of a prudent underwriter in deciding whether to accept a risk and if so at what rate of premium.” How do you as an Insured know what an underwriter may regard as ‘material’? If in doubt as to whether some piece of information is relevant, tell insurers anyway. While the law has softened in favour of the Insured in many territories, it is still normally possible for the insurer to turn away any claim if there has been a breach of utmost good faith i.e. material facts have been withheld by the Insured
The Maximum Indemnity Period is a limit under a business interruption policy relating to the maximum period over which the insurer will pay for loss of profit. It is the responsibility of the Insured to decide upon the Maximum Indemnity Period and if the period chosen is inadequate, it can have a very serious effect on the Insured’s business. Professional advice is necessary in deciding this issue and we recommend you contact your professional advisors, Trafalgar International.
There is no fixed definition for this term, which tends to mean slightly different things to different insurers. It is used along with Estimated Maximum Loss (EML) and Maximum Possible Loss to refer to the largest loss likely, possible or probable under any given insurance policy.
An absolute must for expatriates where medical facilities may not be as modern or as reliable as they are at home. Trafalgar International are experts in this area and operate a number of programmes which can be tailor made to any situation. Refer to our article on medical insurance by clicking here.
Cash, bank and currency notes, cheques, money orders, postal orders and current postage stamps are excluded from the cover given by a fire insurance policy and a separate money policy is usually required. This is written on an “All Risks” basis to cover any accidental loss or damage but will exclude or limit cover for employee dishonesty. Cover can extend to money in or out of a safe on business premises, in the home of any director or employee, in a safety deposit box, in transit to or from the bank or in the hands of bill collectors. One particular area that needs to be considered is the definition of money. Does it really include all the financial instruments that you hold?
See “Hazard”. Moral hazard hand refers to the attitude and conduct of the Insured.
To be continued...Please visit us soon again !
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