|
|
|
|
General Business BURGLARY INSURANCE – BUSINESS PREMISES Introduction: This is an important class of business, which should be developed, but profitable underwriting depends on careful selection and an adequate protection in the form of guards, watchmen and locks, bolts and bars. The business premises policies normally do not cover the risk of: (i) Larceny (ii) Master key or duplicate key used (iii) Trick not involving force (iv) Pilfering or shoplifting (v) Legitimate entry without violent or forcible exit. Events Insured Against 1) “Any of the property described in the schedule, whilst contained in the premises described in the schedule and situate as stated therein (which premises shall not include any garden verandas yard out-building or other building not connected with or communicating with the main building) shall be lost by theft consequent upon forcible and violent entry of the premises containing the said property or 2) A) The premises or B) The property shall as the result of actual forcible and violent entry of the premises (or attempt thereat) with intent to commit theft suffer damage…. The company shall indemnify the insured in respect of: 1) Property stolen 2) Damage to a) Premises) such sum as to make good the damage b) Property) falling to be borne by the insured. Not exceeding in respect of any one description of property not in the whole sum or sums respectively insured by this policy as stated in the schedule.” Exclusions: a) This policy does not cover loss, destruction or damage where any inmate or member of the insured’s household or his business staff are concerned as principal or accessory or loss or damage due to the wilful act or with the connivance of the insured. b) To deeds, bonds, bills of exchange, promissory notes, money or securities for money, dividend warrants, postal orders, cheques, postage or bill or other stamps share and stock certificates or other documents or business books, plan, drawings, pattern design, moulds models, precious stones, platinum gold or silver articles, bullion coins, medals, stamp collections, cups, trophies, curiosities, sculptures, manuscripts, or rare books or works of art unless the same is specially insured there under; c) Which can be insured, against by a fire or glass insurance policy; d) Riot, strike, civil commotion – war and similar risks – flood – and other convulsion of nature; e) Occurring while the premises are left without an inhabitant or caretaker actually in them for a continuous period exceeding four consecutive days and nights or ten days and nights in any one year of insurance unless such further non-occupancy be previously notified to the company and covered by the payment to and acceptance by the company of an extra premium. For the purpose of this exception “night” means the period between closing time and the usual hour for re-opening the following day. Sundays and holidays are to be reckoned as “days”; f) Nuclear exclusion – Nuclear fuel; g) Nuclear exclusion – Nuclear weapons material; h) Due to larceny; i) If the insured without the consent of the company in writing shall make or permit to make any alterations to the premises or change or relax any of the safeguards for securing the premises; Comments on the exclusions: a) We provide cover against theft and this clause protects the company against the dishonesty of the insured, his family or employees. The insured could obtain fidelity guarantee insurance for his employee. b) This clause excludes items which could be: 1) Extremely attractive to thieves – gold, jewellery etc. 2) Difficult or impossible to assess the true value after loss had occurred – manuscripts, plans, moulds, etc. 3) Possible to insure under a separate policy – money insurance. But all this items could be insured under a burglary policy provided the insured gives full details and the company accepted the risk. Refer any such request to the head office. c) Although the policy covers property damage following burglary, if there is damage by fire or breakage of glass the burglary policy would not pay any claim. d) Normal exclusion are self explanatory. See policy for full exclusion wording. Although we are occasionally requested to extend a policy to cover riot and strike, this is a risk more properly insured under a fire policy and we would not wish to include cover for any of these excluded perils. e) Limit the time the premises can be unoccupied to 4 days and nights at any time. Any longer period of unoccupancy would be regarded, as unduly hazardous and additional premium to cover greater unoccupancy should need to be paid, if this was acceptable to the company. f) Burglary and housebreaking policies require “forcible and violent entry” and these words thereby exclude larceny cover. g) Any alteration to the premises or change or relax any of the safeguards for securing the premises will increase the company’s exposure. Underwriting Considerations: a) The proposal, as always is designed to provide information on the moral and physical hazards and should always be properly completed, it is desirable, whenever possible, for theft survey to be carried out. b) The first and foremost question to consider is, can the goods that we are to insure be quickly converted to cash. If the answer is yes, then the theft risk is large because the goods are attractive to thieves. c) The area in which the premises are situated is of importance. Business known “rough” should be avoided. Risks situated in streets lit at night are an improvement over premises in dark unlit areas where thieves can work unnoticed at the locks. d) Consideration should be given to the protection of the premises; it is a basic fact that the risks must be fully protected in accordance with the hazards that they present. e) Wherever possible risks should be seen even if a full survey cannot be carried out, to satisfy the underwriter that there are sufficient protections to make it as difficult as possible for thieves to break in and will go to seek less well protected premises elsewhere. f) The proposer’s occupation (goods to be insured) has a bearing upon the rate to be charged, goods that are the least attractive to thieves being lowest rated and goods that are attractive being rated at higher rates. The situation of the risk and protection of the premises are also rating factors but an increase in rate will never compensate for lack of property security. g) If the past experience shows that a previous burglary or burglaries have occurred, these must be investigated thoroughly and the method of entry of the thieves discovered and precautions must be taken so that this cannot occur again. It is important to be sure that the goods are insured for their full market value and the sum insured is regularly increased to keep abreast of ever increasing price rise and any genuine expansion of business activities. h) By failing to convince an insured of the need to constantly revise the sums insured, the underwriter is losing premium income when the cost of claims must rise to reflect the increased values of goods being stolen. In practical terms, it is unusual for an insurer to be able to take advantage of the “Average Clause” because of the practical difficulty (and expenses) of being able to prove under-insurance. i) Ideally the insured should be asked to increase the sum insured every year at renewal date, but in any case, if the sum insured has not increased every 2 or 3 years, letter must be written suggesting an upward revision of the sum insured and explaining the disadvantages to the insured if the average clause has to be involved following a claim. RATING (i) Burglary (private dwelling) between 0.55% - 1% (ii) Burglary (business premises) between 0.40% - 1% (iii) First loss discount levels Discount
If the underwriter assessed EML for the risk is equal Types of Cover Available: (a) Full Value Policy The normal type of policy for small risks, say up to N50,000 (although this would be more for high values items) is where the total value of the stock is the sum insured by the policy and in the invent of a total loss claim, is the amount which could be paid by the policy. (b) First Loss Policy For larger risks we prefer a first loss policy and for very large risks (a sum insured above N250, 000) would be prepared only to write a first loss policy. The policy grants a full indemnity up to a specified amount, which is less than the full values of the property at risk. The first loss sum insured usually represents the greatest estimated probable loss. Thus a first loss policy may be issued on a store for N50, 000, where the total value may be N500, 000.the reason for our preferring a first loss policy is that although the chance of a loss above the first loss sum insured is small it is not a risk, which we wish to accept. From the insurance point of view, both full value and first loss policies represent almost the same degree of risk of having a claim, as the chance of a claim above the first loss limit is remote. Thus although some discount is given for a first loss policy the amount is small. The security of large premises having first loss insurance is normally much better than smaller risks. All first loss policies must be endorsed with the first loss average clause. Occasionally a policy is on a first loss basis for certain goods only and a full value basis for all other property. |
Quick Links
For details of Branch Network and Managers Nationwide select the appropriate location below:
|
|
© 2002 Copyright Niger Insurance Plc. Website designed by Tritech Computers Ltd. E-mail:- webunit@tritech-computers-ltd.com |
