Monday, 10 April 2017

Fronting fee/policy

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I have gone though an invoice submitted by the Contractor to substantiate actual cost incurred by them for obtaining the PII which was measured as a PS. The invoice contains an item called "fronting fee" in addition to the PII policy premium.


So what does it means by fronting fee?


 "Fronting Policy' A risk management technique in which an insurer underwrites a policy to cover a specific risk, but then cedes the risk to a reinsurer. Fronting policies are most commonly used by large organizations, and is a type of alternative risk transfer (ART)."


That means fronting fee is a fee paid by the insurer to a re insurer when they are re insuring a risk, for your information local insurance companies are reassuring their risks with large scale international reinsurance companies.


Fronting companies charge a fee for this service, generally between 5 and 10 percent of the premium being written. 




Reference:http://www.investopedia.com/terms/f/fronting-policy.asphttps://www.irmi.com/online/insurance-glossary/terms/f/fronting.aspx


Tuesday, 18 October 2016

Excess Layer of an Insurance

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Excess layer cover is a policy designed to provide increased limits of liability over your primary insurance cover.



Example:

 A Roofing company has £2,000,000 Public Liability, they have requested cover for £5,000,000 for a contract they are starting.

Excess layer will provide the £3,000,000 over £2,000,000 to give a total of £5,000,000"



Example phase from an insurance policy:

Combined single limit bodily injury, property damages losses up to USD 20M any one occurrence and in the aggregate in excess of a primary layer of USD 40M....



In above example aggregate value of the insurance policy is 20M+40M=60M





Source: http://www.scruttonblandinsurance.co.uk/liability/excess_layer.php

Wednesday, 13 January 2016

Tool box meeting is mandatory in Qatar

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It is a general practice in Construction sites to carry out Tool box meeting (s) for the benefits of their workers, in terms of their health and safety, prior to commence the work by gang leader (s).
In Qatar, it is a legal requirement pursuant to the Qatar Labour Law (Law No (14) of the Year 2004), in particular Section 53, to carry out such meeting, as extracted below

PART TEN SAFETY,
VOCATIONAL HEALTH AND SOCIAL CARE
Article (99)

The employer or his representative shall on the commencement of every worker's engagement inform him of the hazards of the work and the hazards which may occur thereafter and shall inform him of the safety measures to be taken for the protection therefrom and shall post up in a conspicuous place his detailed instructions concerning the means of observing vocational health and safety for protecting the workers from the hazards to which they are exposed during performance of their work.



Wednesday, 15 July 2015

workers compensation and employers liability policy

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An insurance policy that provides coverage for an employer's two key exposures arising out of injuries sustained by employees.

Part One of the policy covers the employer's statutory liabilities under workers compensation laws, and

Part Two of the policy covers liability arising out of employees' work-related injuries that do not fall under the workers compensation statute.

Source: http://www.irmi.com/online/insurance-glossary/terms/w/workers-compensation-and-employers-liability-policy.aspx

severability of interests clause in an insurance cover

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A policy provision clarifying that, except with respect to the coverage limits, insurance applies to each insured as though a separate policy were issued to each. Thus, a policy containing such a clause will cover a claim made by one insured against another insured."



Purpose of this clause and the purpose of "cross liability clause" is identical.





http://www.irmi.com/online/insurance-glossary/terms/s/severability-of-interests-clause.aspx

Cross Liability Coverage in an Insurance cover

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Cross liability refers to the ability of one insured party to sue another insured party if both parties are under the same contract. Cross liability coverage is most frequently found in commercial insurance contracts.



 It allows the different parties on the contract to be treated separately in certain situations, while in other situations treated the same. In the case that the parties are treated separately during a claims suit, they are not all given a separate coverage limit. This means that an aggregate limit still applies to the total coverage provided by the policy.



 For example, an automobile company shares a liability policy with its subsidiaries. The parent company is responsible for assembling the vehicle, while the subsidiaries make the parts and components. Because of a faulty part, a number of road accidents occur, resulting in a number of claims made against the automobile manufacturer. Using the separation of insureds feature of the cross liability coverage policy, the parent company sues one of its subsidiaries."



http://www.investopedia.com/terms/c/cross-liability-coverage.asp

Sunday, 15 March 2015

What is excess liability policy

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Excess liability policy 



A policy issued to provide limits in excess of an underlying liability policy. The underlying liability policy can be, and often is, an umbrella liability policy. An excess liability policy is no broader than the underlying liability policy; its sole purpose is to provide additional limits of insurance



For an example, if a Construction project has umbrella insurance cover for Works with a deductible of 1M (which means any claim below 1 M shall be born by Contractor and Insurance company will not pay) that has been arranged by Employer, then the Contractor shall arrange another insurance cover to cover the deductible and that insurance cover is call as Excess liability policy



Source - http://www.irmi.com/online/insurance-glossary/terms/e/excess-liability-policy.aspx







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