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Corporations around the world
battle daily to increase their efficiency, find new opportunities
for growth, and stay connected with the business world.
In the meantime, it is also important for all industries to protect
their exposures in all aspects to assure a good return on their investment.
Poor risk management can negatively impact a company and its bottom
line. Earnings could be affected by excessive costs arising from third
party claims for bodily injury or property damage, or companies could
be left with unproductive assets, such as accidental damage to machinery
or tools. The impact can be direct loss for repair or replacement
of equipment, compensation to third party, and consequential loss
due to business interruption. Do you
have a proper insurance program to protect your exposures?
 All
businesses should have, at least, Property Insurance to cover physical
damage to their tangible assets e.g. building, machinery, equipment,
stock etc. The coverage varies from Standard Fire Insurance, which
covers loss or damage caused by fire, lightning and explosion. Or,
with additional premium, the coverage can be extended to cover extra
perils like flood, windstorm, earthquake, burglary, robbery etc. which
is called Contingencies Insurance. The other popular one is "All
Risks" Insurance, which provides broader coverage than the other
two forms. Coverage includes all aforementioned perils and other types
of unforeseen and accidental damage. The policy does not spell out
the perils covered but specifies the exclusions. As such, it is normally
interpreted that losses from causes not specifically excluded are
covered under all risks insurance.
The effect to businesses after an accident is not just damage to the
physical assets but sometimes also consequential loss. This can have
a great effect on the business, which leads to loss of revenues and
profits. It is recommended that Business Interruption Insurance be
arranged in conjunction with Property Insurance to minimize the loss
to businesses should an accident occur.
 The
coverage under this insurance is to indemnify against the Insured's
legal liability for bodily injury or property damage of third party
arising from the Insured's negligence or wrongful acts. The compensation
to third parties for medical expenses and/or repair costs for his/her
car due to motor accident, which is covered under Motor Insurance,
is one form of third party liability insurance. There are various
forms of third party liability insurance policies. Public Liability
Insurance covers general liability happening in connection with the
Insured's business. However there are exclusions for specific causes
of liability, which require more specific forms of policy. Product
Liability covers liability arising as a result of the products of
the Insured e.g. accident or illness caused by the use of the Insured's
products etc. Professional Indemnity is to protect those professionals
e.g. bankers, lawyers, architects, accountants, etc., who might negligently
fail to exercise reasonable care as other professionals and causing
loss or damage to others. Directors' and Officers' Liability is to
protect the directors and officers of a company while performing their
managerial duties. The diversity of professions and functions covered
by the policies necessitates the use of more than a single policy
form.
Many companies purchase insurance for their employees as additional
benefits to those available under workmen's compensation funds. The
insurance can be arranged for particular covers or as a package policy
for group medical / health insurance, group personal accident insurance
and group life insurance.
 It
has been mandated by law (Motor Vehicle Accident Victims Act of 1992),
all vehicles registered for use on public roadways must take out liability
insurance to cover bodily injury or death arising from a car accident.
But the coverage under this compulsory insurance is very limited and
does not cover property damage or bodily injury claims in excess of
the very limited compulsory cover. Normally, car owners will also
purchase voluntary insurance, which covers third party liability and
physical damage to the vehicle insured. The coverage for third party
liability under voluntary insurance includes bodily injury (in excess
of compulsory insurance) and property damage (i.e. car or other property
belonging to third party).
This insurance covers loss or damage to vessels (Hull Insurance) or
goods or property during inland transit, sea-freight or airfreight
shipments (Marine Cargo Insurance). For businesses that have significant
volume and frequency of shipments during the year, Open Cover Policy
is recommended because it is cost effective and convenient for administrative
arrangement, while Per Shipment Policy is suitable for businesses
who have less shipments. |
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