Public Liability: Part 2

This week, we will continue from where we stopped last week on Public Liability Insurance.

7.0. Basic Exclusions
The following are some of the exclusions under employers’ liability insurance:
(a) Insured’s liability to employees of contractors to the insured;
(b) Bodily injury intentionally caused or aggravated by the employer;
(c) Any injury by accident or disease directly attributable to act of foreign enemy, war and nuclear risk;
(d) Any liability of the insured which attaches by virtue of an agreement;
(e) Punitive or exemplary damages because of bodily injury to an employee employed in violation of the law;
(f) Accidents resulting from riot, strike and civil commotion; however, this exclusion can be covered on payment of additional premium;
(g) Accidents occurring outside the workplace or outside working hours; this exclusion can also be covered upon payment of additional premium.

8.0. Benefits of Employers’ Liability Insurance
8.1. Employer: This policy guarantees the employer financial security for his/her business in the event that an employee is involved in an accident for which the business is liable, especially for some industrial diseases that manifest after a long period. The employer will also be seen as actively interested in the welfare of its employees.

8.2. Employee: This insurance policy also provides security for employees. Hence, employees are able to work without any fear of being abandoned in the event of an accident. This increases the productivity of employees.

9.0. Occupiers’ Liability Insurance
Occupiers’ liability insurance is one of the compulsory insurances in Nigeria. It was created to satisfy the provisions of section 65 of the Insurance Act of 2003. Section 65 of the Act requires all owners or occupiers of ‘public buildings’ to take up occupiers’ liability insurance to cover their legal liabilities with respect to loss of or damage to property or bodily injury suffered by any third party user of their premises.

Examples of possible scenarios where another party can claim under occupiers’ liability insurance are where personal injury results from accidents in a neighbour’s house such as slips, trips or falls within the property; or being bitten by their dog.

Similarly, if you have been injured, through no fault of your own, in another place such as an airport, public swimming pool, or shop, you may be able to sue the insured occupier for compensation.

An occupier is anyone who owns or occupies the premises, or has a ‘sufficient degree of control’ over an area; and might be a local authority, a company, or an individual. Consequently the occupier is responsible for the safety of those premises or that area, for the benefit of other people.

‘Public building’ under this Act includes a tenement house, hostel, a building occupied by a tenant, lodger or licensee and any building to which members of the public have access for the purpose of obtaining educational or medical service, or for the purpose of recreation or transaction of business.

10.0 Scope of Cover
The occupier liability policy can be arranged to include the following covers.

10.1 Personal Liability: This section cover payments for all sums for which the insured, spouse, relatives and anybody living with them is liable to pay for injury and medical expenses to any third party for accidental injury while on the insured’s premises.

10.2 Public Liability: This pays for legal liability of the insured for accidental damage to public utilities (underground water pipe, electricity cable, etc.) or any underground installation. Injury, death or property damage to any member of the public arising from excavations extending to the insured’s property is also covered by this section.

10.3. Accidents to Domestic Servants: In the event of a bodily injury or disease arising out of and in the course of employment of any domestic servant like gardener, driver, security guard, etc., this section will cover the insured’s liability to compensate these employees.

11.0 Sanctions for Non-compliance
It should be noted that refusal to take up this insurance policy attracts a fine of N100, 000 or one (1) year imprisonment, or both, upon conviction.

Conclusion
All of the above liability insurances help protect the assets of the business, homeowner or occupier.

To save or to invest?

The global economy is slowly starting to recover and the Nigerian economy is amongst them. With more people now in work and people earning again the question has arisen – should one save or invest for the future?

Studies have shown that the Nigerian economy although recovering, still has an unstable Naira value. The current high inflation rate is not contributing to the recovery or the stability of the nation’s economy.

So the question remains, should one invest their money or save it?
Financial experts will tell you to build a good portfolio of investments rather than leaving money in a savings account. It is wise to remember that investment, with its high returns, has the potential of enhancing ones earning capacity than savings does. Industry experts support the notion of it being good for one to save, but it is also good for the person to learn to invest a good portion of the savings in a long-term plan, capable of yielding returns.

Savings vs Investing – the risks
The fact is that saving money in a savings account is a low risk approach although the yield may be lower. With investments the overall yield can be a lot more but the risk involved is greater. At the end of the day it comes down to personal preference and circumstance. In an ideal scenario one would be able to put some money into savings whilst also making good intelligent investments.
 

Investment options available in Nigeria
•    Buy land or property
•    Buy shares and stocks
•    Bonds and debenture

Whether you are saving, investing or doing both, always remember to periodically check your choices to ensure that they are suitable for your current investment goals.

Skill Acquisition on Mansard Safe Cruise

Is skill acquisition of any importance; Yes or No?

Join Mansard Safe Cruise this evening at 6:10pm on Smooth 98.1fm and let us know what your thoughts are on this.

Mansard - Thinking Insurance

What is Travel Insurance

With foreign holidays and international business trips becoming more frequent, travel insurance has become a necessity. Yet, many of us do not understand what travel insurance actually is.  Travel insurance can be divided into two main categories:

• Trip Cancellation Insurance
• Travel Medical Insurance

Trip cancellation insurance consists of:

• Trip Cancellation - If you cancel your trip prior to departure, you will be able to claim back your deposit or entire holiday cost
• Trip Interruption - If you need to return home before your scheduled departure, the policy will help you pay for flights and any other arrangements.
• Emergency Medical Expenses - Your travel insurance package will pay for your medical costs whilst abroad
• Emergency medical Evacuation - The travel insurance policy will arrange and pay for transport to the nearest medical facility. Some policies will also pay for your flight home if special arrangements are needed
• Repatriation of Remains - If you do unfortunately pass away while on your travels, your travel insurance policy will pay to have your remains brought back
• Baggage - Most travel insurance policies will cover lost luggage, damaged luggage and late luggage.
• Accidental Death & Dismemberment - The policy would pay out if you died in an accident or post two limbs in the accident
• Miscellaneous - Some policies will also cover extra items such as delayed flights, emergency cash transfer and ID theft.

Travel Medical Insurance
This type of travel insurance focuses mainly on medical benefits. This type of policy will specialise in medical fees, evacuations and other medical emergencies. Cancelled or delayed trips will not be covered.

Travel Insurance Excess
Both types of policies will most likely have some form of excess. The size of the excess will depend on the specifics of the claim and the cost of the premium. Please remember to double check and query your excess with the provider before you take up the insurance.

Different Types of Car Insurance

There are three main types of motor insurance products; they offer different levels of cover for your vehicle. In most cases third parties are not affected by which level of cover you have. The three main products are:

1.       Third Party

2.       Third Party Fire & Theft

3.       Fully Comprehensive

When shopping for car insurance quotes it is a good idea to check the premiums for all three types, but before selecting the quote make sure you are comfortable with the level of cover. Drivers of expensive cars tend to choose fully comprehensive. New and young drivers often choose Third Party as it is the cheapest option.

Third Party Car Insurance
If you choose third party car insurance you will most likely pay less for your premium, but the level of cover is minimal. If you were to have an accident and it was your fault then your insurance provider would only pay out for loss to other vehicle, you vehicle repair costs will not be covered. If the other driver is at fault then it does not make a difference what level of cover you have. 

Third Party Fire & Theft Car Insurance
As above but with the additional peace of mind that if your vehicle was stolen or burned it would be covered. So, your road risk cover is still the same as third party only cover. This level of cover is more popular than third party only. Be advised that there will be some level of excess applied if you were to make a claim – check your policy for exact details.

Full Comprehensive Car Insurance
This level of cover includes the first two levels plus, if you were to have an accident and it was your fault your car repair costs would be covered. This level of cover is the most expensive but it offers full protection in the event of an accident. Again, there will be excess amounts applied to any claim so check your policy wordings.

Keyman Insurance

What is Keyman/Person insurance?

It is an important form of business insurance, which is taken out by the business to compensate for financial losses that might arise from the death or extended incapacity of an important member of the business. Keyman insurance does not indemnify the actual losses incurred but compensates with a fixed monetary sum as specified on the insurance policy.

Since keyman insurance is more of a type of insurance policy it may include other insurance used for other business specific purposes, including:

• Buy/Sell Insurance (Shareholder Insurance)
• Debt Protection
• Revenue Protection

Keyman insurance can provide compensation for losses in four categories:

• Losses related to the extended period when a key person is unable to work
• Insurance to protect profits
• Insurance to protect shareholders or partnership interests
• Insurance for anyone involved in guaranteeing business loans or banking facilities

Who is the keyman in a business?

A key person can be anyone directly associated with a business whose loss can cause financial strain to the business. In a small business, it’s usually the owner or founders, the people whose absence would sink the company.

Why is keyman insurance important in a business?

The purpose of keyman insurance is to help a business survive the sudden loss of the person who makes the business work. The business can use the insurance proceeds for expenses until it can find a replacement person, or, pay off debts, distribute money to investors, pay severance to employees and close the business down in an orderly manner.

Nigerian Insurance Industry to see a steady 7.5% Growth over next four years

Nigerian Insurance Industry to see a steady 7.5% Growth over next four years

A recent report carried out by Fast Market Research based in the States claims that Nigeria’s Insurance Industry will grow at an average annual rate of 7.5% between now and 2018. The research company is very reputable in market research, business information and competitive intelligence, representing top global analysts and publishers.

Read more here

NIA moves to standardise car insurance premiums

Car insurance in Nigeria accounts for about 26% of the country’s insurance industry’s gross premium. The Nigerian Insurers Association (NIA) is working on new plans to standardise the premium rates being charged on motor insurance policies in order to put an end to rate cutting and boost industry revenue.

Read more here

14 Million Uninsured cars in Nigeria!

The Nigerian Insurers Association (NIA) has published shocking figures that show only 15% of Nigerian cars currently on the road have adequate motor insurance. That’s a scary 85% of Nigerian motorists driving around without car insurance! The NIA recently announced that it had records of only 2.5 million cars as insured on its database; the remaining 14 million were registered as Uninsured. NIA’s Director General, Sunday Thomas, raised this issue while speaking on the threats to the survival of the nation’s insurance industry.

Read more here

Clampdown on Illegal Insurance Businesses

The sale of illegal insurance premiums in Nigeria is presenting a big problem for the country’s insurance industry. There are many illegal insurance agents and brokers, who collect the premium and produce documentations. Unfortunately these policies fail to pay out when a claim is made.

Read more here

PUBLIC LIABILITY: Part 1

Introduction
Various organizations and businesses carry out a wide range of activities that have potential impact on third parties including customers, visitors and members of the public. The impact of business activities on third parties can result in lawsuits from the affected parties bringing unexpected expenses to the organization and threats to its finances.


1.0.    What is Public Liability Insurance?
Public liability Insurance provides protection against your legal liability for injury to third parties or damage to third party property. It covers your business for damages payment and legal costs for bodily injury to third parties and damage to third party property caused by negligence in the course of your business activities. It covers claims from members of the public, visitors, passers-by, bona fide sub-contractors both on your own premises and at third party premises where you or your employees work.

2.0.    Standard Exclusions
Public liability Insurance, like most insurance policies, does not cover all risks. Below are some risk exposures that are ordinarily not covered under Public Liability insurance.
(a) Liability resulting from pure financial loss, i.e. where there has been no injury or damage to a third party.
(b) Bodily injury, death or damage to the property of any employee of the insured. This is excluded because the risk is covered more specifically by employee liability insurance, which we shall look at shortly.
(c) Liability for loss of or damage to property owned or in custody of the business or insured. Recall that we stated earlier that liability policies pay compensation to third parties only.
(d) Most Public Liability insurance policies exclude gradual pollution damage and only cover pollution damage caused by sudden and unforeseen events.
(e) Fines and penalties: Fines and penalties are often excluded from insurance policies because insurance does not support or encourage going against the laws of the state.
(f) Excess: This is the first part of every claim or loss borne by the insured and it is either expressed in a percentage of the claim or in a certain monetary figure

3.0. Extensions
Notwithstanding the major exclusions itemized above, public liability policies can be extended to cover certain other risks upon the insured’s request. Some of these risks are as follows:
3.1. Strike, Riot, Civil Commotion: Here, the liability of the insured is extended to cover accidental bodily injury or accidental property damage to any third party occurring at specified premises directly caused by strike, riot and civil commotion.
3.2. Overseas Liability: The jurisdiction covered by Public Liability insurance is usually stated in the policy. However, on payment of additional premium, the policy can be extended to cover the insured’s employees or directors against legal liability for bodily injury or property damage to any third party incurred in a personal or official capacity temporarily outside Nigeria.
3.3. Contractual Liability: The policy can also be extended to cover the insured against any claim made in respect of liability assumed by the Insured under any contract or agreement for bodily injury and property damage to any third party provided that such contract or agreement has been declared to the insurance company.

4.0. Importance of Public Liability Policy
Injuries and accidents can occur when you least expect them. Sometimes they occur as a direct result of work related activities, but more often, members of the public simply fall victim to the circumstances in which they work.

5.0. Employers’ Liability Insurance
Employers are responsible for the health and safety of their employees while they are at work. Your employees may be injured at work (for example, employees are at risk of injuries due to slips, trips, falls, accidents from faulty equipment, hazardous materials, repetitive strain injuries, etc.) or they or your former employees may become ill as a result of their work while in your employment.
Employers’ liability will not cover you against claims such as wrongful dismissal, sexual discrimination, etc.

6.0. What does Employers’ Liability Insurance Cover?
The employers’ liability insurance policy indemnifies the insured against liability at law to pay compensation and claimant’s costs and expenses in respect of the bodily injury by accident or disease to the insured’s employees for which he is liable. The policy will bear the following costs, amongst others:
1. Payment of medical expenses of the insured employee;
2. Temporary disability benefits;
3. Permanent disability benefits;
4. Vocational rehabilitation services;
5. Death benefits to dependants of an employee should the employee die from work related accidents;
6. All costs and expenses with the insurance company’s written consent.
We will conclude this article next week. Keep a date.

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PROFESSIONAL INDEMNITY: Part 2

3.0 Former Subsidiary: The civil liability of a former subsidiary (must be specified in the policy) in the course of rendering professional services, arising out of any act, error or omission occurring prior to the date such subsidiary ceased to be a subsidiary of the insured. The basis of indemnity is usually agreed in advance and incorporated into the policy.

4.0 Joint Venture Liability: The indemnification of the insured against civil liability for compensation and claimant’s costs and expenses in respect of any claim resulting from the insured’s participation in any joint venture in connection with its professional services. The indemnity will be limited to the insured’s proportion of any liability incurred, and income derived from participation in the joint venture must have been included in the calculation of income furnished by the insured,

Professionals should always consider adding ‘run-off’ coverage to their policies, which provides protection for several years after their businesses are closed. If not, professionals are open to lawsuits as liability does not expire because they are not operating a business. A third party can bring a lawsuit years later, and a PI policy pays for claims and the insured’s legal costs only when it is in effect.

5.0 Rating Consideration
Insurance companies usually consider several factors in determining the premium payable for PI policies. Such factors include the following:

5.1. Insured’s Profession/Experience: The insured’s profession and professional business are vital in determining the terms. The insurer will want to know how many years the insured has been practicing, added qualifications and recognition over the years and the quality or otherwise of previous professional services rendered. The insurer will also be interested in the industry in which the professional operates (and the regulatory requirements), how frequently the insured renders professional services and the likely severity of claims when they occur.

6.0 Scope of Cover: The insured’s preferred cover arrangement including the extensions required will also influence the pricing of the risk.

6.1. Limit of Liability: The limit of liability gives an indication of the maximum potential loss.

6.2. Insured’s Loss Experience: Obtaining loss history of a given insured will assist in assessing the customer’s risk. The insured’s reputation will also be assessed. An insured with a bad loss experience will either pay a higher premium or be ready to abide by stricter insurer’s terms.

6.3. Excess: Excess is the first amount of each and every claim that is borne solely by the insured. If an insured elects to have higher excess than normal, the pricing of his risk will be different from the insured with normal excess.

7.0 Policy Exclusions
Like most other insurance policies, a PI policy does not cover all risks. Some of the exclusions under the policy are as follows:

1. Any act, error or omission that occurred or was committed prior to the retroactive date.

2. Any breach of duty by the insured (or the insured’s employee) committed in the insured’s capacity as a director.

3. Any dishonest, fraudulent, criminal or malicious breach of duty including reckless disregard for the consequences, or any deliberate breach of any statute or regulation.

4. Claims made against the insured before the inception of cover or claims arising out of facts or circumstances which were known (or should reasonably have been known) to the insured before the inception of cover.

5. Liability arising from asbestos or asbestos products in any form or quantity or for defending any claim for such actual or alleged liability. However, this exclusion shall not apply if any injury sustained is unrelated to the inherently hazardous nature of asbestos.

6. Liability to any of the insured’s employees or to any person deemed to be employed by the insured under any relevant workers’ compensation act or similar legislation.

7. Liability arising from bodily injury or property damage involving the use of the insured’s internet/intranet operations including property damage to computer data or programs and storage media.

8. Liability arising from war, invasion, act of foreign enemy, hostilities, rebellion or warlike activities (whether war is formally declared or not), mutiny and civil commotion assuming the proportions of or amounting to a popular rising.

9. Any contractual or other assumed liability, unless the insured would in any event be legally liable in the absence of such contractual or other assumed liability; or any liability assumed by an insured under any guarantee or warranty.

10. Liability arising out of the insured’s insolvency, bankruptcy, liquidation, or failure to pay any trade debt.

11. Liability arising from any terrorism act, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

8.0. Conclusion
If your business provides a highly specialized service or the service you render is highly sensitive and critically important to your client’s business, then you need Professional Indemnity policy. All human beings are prone to mistakes and you might commit errors and omissions in the performance of your duties. These risks can open you up to litigations and that’s where Professional Indemnity insurance becomes very relevant.

Furthermore, the activities of most professionals are guided by laws and legal precedents. That makes Professional Indemnity insurance even more critical to a professional firm’s long-term survival, as it may find itself being sued tomorrow for actions that are completely in line with today’s consulting expectations.

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PROFESSIONAL INDEMNITY: Part 1

Introduction
A professional is a person who possesses special skills and is (usually) paid to undertake a specialized set of tasks. A professional offers himself or herself as an expert in a particular area and is expected to exercise the skill and expertise at the level set by the profession. Examples of professionals include doctors, engineers, lawyers, architects, accountants, engineers, scientists, technology experts, social workers, real estate agents, insurance brokers, insurance companies and artists.

However, professionals are human beings who can make mistakes or fail to exercise the required professional skills, expertise and judgement at the level expected by their clients. Because the public relies on the expertise of a professional, even when negligence is not established, they can be sued for mistakes that result in injury, loss or damage to the client. Most other liability insurance policies cover claims of bodily injury and property damage only and typically exclude coverage for claims related to the delivery of professional services. The liability risk associated with your company’s professional errors, omissions and negligence can be far greater than the bodily injury and property damage risks covered by your general liability policy. A professional’s legal liability can only be covered by a Professional Indemnity insurance policy.

If you are in the business of selling your knowledge or skills by providing advice, recommendations or services to your clients, it is important and in your best interest to buy Professional Indemnity (PI) insurance. In Nigeria, many professionals are required by law or as part of their professional authorization to have PI insurance.

1.0. Scope of Cover
Professional Indemnity insurance provides comprehensive protection against claims for financial loss, injury or damage arising from an act, negligence, error or omission in the performance of professional services. The cover also includes payment for any legal fees that accumulate during litigation and the damages that might be awarded against the insured up to the policy’s coverage limit

A Professional Indemnity policy can be arranged to cover the following, amongst others:
1.1. Breach of Professional Duty: Civil liability (including payment of compensation and claimant costs and expenses) arising from a breach of professional duty owed in the conduct of the insured’s professional business.

1.2. Defence Costs: The cost incurred with the prior written consent of the insurer in the investigation, defence or settlement of any claim under the policy.

1.3. Libel and Slander: The insured’s legal liability to pay compensation and claimant’s costs and expenses and other costs in respect of claims made against the insured or any of its employees for libel or slander committed (not committed with express malice) in the course of carrying out its professional business or practice.

1.4. Intellectual Property: Infringement of rights of intellectual property, provided that the act, error or omission by the Insured is unintentional and is committed in the course of rendering professional services.

2.0. Possible Policy Extensions
The Professional Indemnity policy can be extended to cover the following risks subject to the payment of additional premium and other additional terms and conditions.

2.1. Employee’s Liability: Liabilities arising from the act of the insured’s employee (other than for such employees’ dishonest, fraudulent, criminal or malicious breach of duty) for which the insured would have recovered under the policy.

2.2. Loss of Documents: The costs, charges and expenses incurred in replacing or restoring documents (including but not limited to documents which are the property of the insured) which have been destroyed or damaged, or lost or mislaid and cannot be found after diligent search.

2.3. Costs of Official Inquiries: The reasonable costs incurred by the insured in respect of legal representation at any inquiry (including any coronial inquiry or any inquiry under the disciplinary rules of a professional association of which the insured is a member) or other similar process relating to or connected with the insured’s professional business, which the Insured is legally compelled to attend. Sometimes insurers will insist that they nominate the lawyer to represent the insured.

2.4. Compensation for Court Attendance: Payment of compensation (subject to a limit) to the principal or employee who attend court as a witness in connection with a claim recoverable under the policy, The legal advisers of the insured together with the insurer must be in agreement that such witness’s testimony is necessary.

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