This policy covers material damage to the property insured arising from a wide range of perils which will usually include fire, lightning, explosion, storm, tempest, flood, riot damage, malicious damage, bush fire, cyclone, tornado and impact damage.
CONSEQUENTIAL LOSS (Following Fire or Allied Peril Damage) This policy enables you to:
1. Pay all the overhead expenses of the business and any other expenses which continue following the damage.
2. Retain all essential employees or if required, all employees, during the period of interruption.
3. Earn the same net revenue as would have been earned had the damage not occurred.
4. Cover any increase in cost of working incurred in an endeavour to reduce the interruption to a minimum e.g. the renting and equipment of temporary premises, contracting out, extra labour, special advertising, and the like. 5. Cover auditors’ fees for producing and certifying any particulars or details required in connection with the claim.
The fidelity guarantee policy is intended to reimburse you for financial loss that may be incurred arising from fraud/embezzlement of monies, stock or other property, or other material assets involving your employees.
The most recent relevant law – the Workmens’ Compensation Decree 1987 – imposes on all employers of labour in Nigeria, a liability to pay certain benefits to “workmen” (as defined) in the event of injury or death of such workmen arising out of and in the course of employment. In order to establish a valid claim under the Decree, it is essential that the following conditions be satisfied:
• The incident must be accidental (not a self-inflicted injury for example) and the result must be death or injury to the employee.
• The employee must be under a contract of service. • The accident must arise out of and in the course of employment .
• The employee must be a “workman” as defined by the Decree.
Provides cover for all risks of damage, loss or destruction of contract works, whether permanent or temporary including materials and other things meant for incorporation into the works.
It also provides indemnity which the insured collectively or individually, including all participants to the yard shall become liable to pay, according to the law in force, in respect of claims arising out of accident and consequential losses to third party provided that such accident, injury, damage or loss results from activities in connection with the performance of the contract.
The policy could be effected to cover a specific project. It could equally be effected on open basis where all projects (falling within the previously agreed limits) are declared prior to commencement of such projects based on the prior declarations, premiums are then adjusted at the end of the policy period.
This policy is designed for use by contractors, or employers of contractors, where contract conditions do not require (compel) the contractor to insure. It is usually divided into two major sections:
- Material Damage
All risks of loss or damage to the whole of the contract works whether permanent or temporary including materials incorporated therein the property of the insured’s or for which they are responsible (but excluding contractors tools, plant and equipment) whilst on the site of work or in transit thereto.
Temporary buildings meant for residential offices and stores together with their contents including contractors stock in warehouse, spare parts and tools, office furniture, fittings and equipment the properties of the insured’s or for which they are responsible whilst at the contract site or in transit thereto
- Third Party Liability
Legal liability to third parties for accidental bodily injury or death and/or damage to property including all costs incurred in defending claims for such compensation arising out of and in connection with the execution of the contract works.
There are three main classes of cover offered in the Nigeria market.
1. COMPREHENSIVE COVER
This provides the maximum coverage possible. It could be likened to the All Risks cover in respect of household or industrial properties. It is however subject to a number of exclusions which tends to make the “Comprehensive” title a misnomer.
It, amongst others, affords indemnity in respect of theft, damage to own vehicle, third party liability for both bodily injury and property damage.
2. THIRD PARTY ONLY
This provides a restricted cover in the sense that damage to own vehicle is excluded. Only third party liability is covered.
3. THIRD PARTY FIRE & THEFT
This provides in addition to third party liabilities, cover against fire and theft loss to own vehicle. Accidental damage to own vehicle is however excluded.
The interest to be protected under this class of insurance could be classified as follows:-
1. PRIVATE CARS
All private passenger cars including four wheel drive vehicles whether owned, leased, used in connection with the company operation or by officials of the company. Policy also covers third party property damage.
2. COMMERCIAL VEHICLES (GOODS ONLY)
All goods carrying vehicles including Pick-up van(s) whether owned/leased, used in connection with the company’s operations.
3. COMMERCIAL VEHICLE (OMNI – BUS)
All passenger-carrying vehicles other than private cars.
4. COMMERCIAL VEHICLE (SPECIAL TYPE)
Mobile cranes, Fork lifts, Refuellers, Hydrant servicers and the likes.
The policy relates to loss or damage to the sea or ocean-going vessels insured arising from a wide range of marine perils. In addition, certain third party liabilities that may be incurred from the operation of these vessels are covered.
The basic cover is as per the Institute Yatch Clauses. This covers the vessel while on commission at sea or in inland waters, in port, docks or ways, gridirons or pontoons.
The cover is broadly divisible into two sections.
1. Loss of or damage to the vessel
2. Liability for injury to third parties, or damage to third party property
The three most common bases of arranging marine cargo insurance are the following:
a. Institute Cargo Clauses ‘A’
The cover is “all risks” of loss or damage to the subject matter insured except as stated below. This is the widest cover available.
b. Institute Cargo Clauses ‘B’
This covers loss or damage to the cargo insured reasonably attributable to fire or explosion, vessel or craft being grounded, stranded, sunk or capsized, overturning or derailment of land conveyance, conveyance, collision or contact of vessel or conveyance with any external object other than water, discharge of cargo at a port of distress, earthquake, volcanic eruption or lightening.
c. Institute Cargo Clause ‘C’
This covers loss or damage to the cargo insured reasonably attributable to fire or explosion, vessel or craft being stranded, grounded sunk or capsized, overturning or derailment of land conveyance, collision or contact of vessel or craft with any external object other than water and discharge of cargo at a port of distress.
The policy will usually cover loss of or damage to goods whilst in transit (i.e. whilst actually on the vehicle or other means of transit), whilst the goods are being loaded onto or offloaded from the vehicle, and whilst the vehicle is temporarily garaged in the course of transit. There are two broad alternative bases of cover:
This covers loss or damage caused by any accident or misfortune (all risks) to goods, unless resulting from a peril specifically excluded by the policy.
This will usually cover loss or damage to the goods arising from a limited range of perils, such as overturning or collision.
The combined workmen’s compensation/group personal accident policy for the staff (Permanent and Contract staff) of the policy holder indemnifies the insured against:
· Death or bodily injury of the insured’s employee(s) caused by violent, accidental, external and visible means, which shall independent of any other cause result in death or disablement or incurring of medical expenses. Cover is for 24 hours whether at home, at work, on a trip within or outside Nigeria.
· Legal liability to pay compensation to employees for death or bodily injury caused by accident or disease arising out of and in course of their employment in accordance with the workmen’s Compensation Decree No. 17 of 1987 and/or at common law.
1. Death/Permanent Disablement 4.5 times annual earnings
2. Temporary total disablement
per week (maximum of 104weeks) 2% of annual earnings per week.
3. Medical Expenses/ Unlimited
4. Reparation Expenses N50,000 per capita or more.
5. Transport, Burial , & other expenses Negotiable
Our recommendation is anchored on the twin planks of cheap rates and wider scope of cover. As a matter of fact, there are some extensions under the combined cover as enunciated above which are not available under standalone workmen’s compensation or group personal accident policies. To cap it all, the combined cover also lends itself to easy administrations.
This is a special type of insurance in terms of its provisions and scope of cover. It is generally an attempt by the principal party to a contract to transfer liabilities to the insurance companies in monetary terms for failure or non -performance of contracts awarded to contractors. It is a guarantee- ship & surety-ship insurance.
The most common Bond arrangement includes the following:-
Performance Bond (PB)
This policy is designed to provide financial compensation to the principal party to a contract for all claims and liabilities to the tune of the total contract amount as a result of failure or non-performance or improper performance of the contracts. Under the policy the insurance company, being the surety of the contractor in this context, undertakes to pay to the contractor upon first demand any such amount, as the contractor shall require, not exceeding the full contract value.
Advance Payment Bond (APB)
This aspect of the bond insurance is issued only to cover the advance payment given to the contractor as against the full contract value. Most contract agreements require that mobilization or advance payment for certain percentage of the full contract value be given to the contractor and upon satisfactory completion, the balance amount is paid. The advance payment bond guarantees the amount so advanced for the contractor in the event of failure on the paid of the contractor.
While the fire policy caters for loss/damage to assets resulting from fire and the burglary policy, loss/damage resulting from theft, one vital exclusion on both policies is that loss/damage to money (and similar items such as stamps, bullion e.t.c) is not covered. Loss/damage to money resulting from fortuitous events (which are usually described by the policy schedule) is the province of what is known as a money insurance policy.
As mentioned, the circumstances in which loss/destruction of money are covered are usually spelt out in specific policy schedules, but generally speaking these would include whilst money is in transit, on your premise during working hours or in securely locked safe outside working hours. Most money policies are also usually extended to cover loss while money is in the personal custody of designated officials of the insured.
In addition, the proposed policy will provide limited fidelity (dishonesty of staff) cover provided the loss is discovered within a specified period of time, usually seven days. As with other property policies, there are various extension clauses that may be added to enhance cover provided by the basic policy at little or no extra cost. In our own proposal for your institution, we intend incorporating such beneficial clauses as:
- The riot and strike extension clause
- Damage to safe extension clause
These would be discussed further during subsequent meetings with you.
To enable insurers assess your own exposure accurately, we require the under-noted details:
· The estimated amount of money you envisage would be carried within a given year. This would depend on the volume of cash transactions you are likely to be involved in during the year.
· The maximum amount of money you normally carry during a given Transit.
· The maximum amount of money you are likely to hold in safe during and after working hours as well as the make, type and value of the safes.
· The maximum amount of money you are likely to keep on your premises (not in the safe(s) during working hours.
This policy will cover unforeseen and sudden damage to the insured machinery arising from such causes as:-
· Faulty materials, design, construction or erection, vibration maladjustment, mal-alignment ;
· Defective lubrication, loosening of parts, abnormal stress, self-heating centrifugal force, molecular fatigue.
· Excessive electrical pressure whether due to atmospheric electricity or otherwise,
· Failure of insulation, short circuit, open circuits or arcing,
· Failure of connected machinery or protective devices,
· Storm and tempest, obstruction or the entry of foreign bodies,
· Lack of skill, carelessness or malice of persons whether in the insured’s employment or not,
· Falling, impact, collision and the like, and other cause not specifically excluded by the policy.
LOSS OF PROFITS (MACHINERY BREAKDOWN) INSURANCE
This policy covers (during the Indemnity Period):-
1. Loss of gross profit
2. Extra costs incurred to prevent or minimise a loss of gross profit
Due to interruption of the business caused by an “accident” to machinery
The policy covers you against legal liability that you may incur from sale of goods, for injury to third parties or damage to third party property arising therefrom.
The policy covers loss of or damage to the insured appliances/equipments such as computers together with auxiliary and air-conditioning equipments, from accidental causes while situated within the specified premises. Cover under this policy is on “All Risks” basis, covering loss/damage from external or internal causes, subject to policy exceptions. The perils covered includes, fire, malicious damage, theft and damage done by thieves.
CONSEQUENTIAL LOSS COVER
· Loss of revenue or additional expenditures e.g. extra costs of using alternative computer facilities.
· Costs of recompiling data · Electronic/Electrical Appliances
Accident covered : As per material damage policy
Indemnity period : To be selected in accordance with the maximum repair/replacement period
Time exclusion : To avoid minor stoppage, at the initial period following the accident will be excluded
The policy covers you against legal liability that you may incur in everyday business activities, for injury to third parties or damage to their property.