What Is Commercial Insurance?
The burglary/theft policy covers the insured against loss or damage to the insured property consequent upon actual, forcible and/or violent entry into or exit from the premises, or damage to insured property or to the premises as a result of theft or any attempt threat including armed robbery/hold-up.
Types of insured properties are:-
- Any person of business with property to the insured whilst kept in the premise that required coverage for stock-in-trade belonging to the insured.
- Goods held in trust or on commission for which the insured is responsible
- Furniture, fixture, fittings and utensils
- Household goods and personal effects
- Damage occasioned by fire or explosion
- Theft by insured, members of his family and employees
- War, strike, riot, civil commotion and kindred risks
- Radioactive contamination
Engineering insurance refers to the insurance that provides economic safeguard to the risks faced by the ongoing construction project, installation project, and machines and equipment in project operation. Product categories: Depending on the project, it can be divided into construction project all risks insurance and installation project all risks insurance; depending on the attribute of the object, it can be divided into project all risks insurance, and machinery breakdown insurance.
TYPES OF POLICY
MACHINERY BREAKDOWN INSURANCE
This policy covers the sudden and unforeseen damage to the insured machinery, plant or equipment whilst either at work or at rest and during the cleaning, maintenance, overhauling, inspection or removal to another position within the premises. It will exclude gradual damage and loss from any cause which is foreseeable.
MACHINERY BREAKDOWN LOSS OF PROFITS INSURANCE
This policy compliments the machinery breakdown policy by providing cover for resultant loss arising from material damage claim. It also covers the loss of profits from the damaged covered under the machinery breakdown policy.
BOILER AND PRESSURE VESSEL INSURANCE
This policy covers explosion or collapse of the insured plant including damage (other than fire) to the property belonging to the insured. It also includes liability at law for damage in respect of bodily injury to any person not arising out of/on in the course of employment of such person in the service of the insured and damage to third party property which is caused by explosion or collapse.
CONTRACTORS ALL RISK INSURANCE
This is an all risks policy covering any unforeseen and sudden physical loss or damage to contract works, construction plant, an equipment and/or construction machinery from any cause whilst at site during the period of insurance unless specifically excluded under the policy.
ERECTION ALL RISKS INSURANCE
This policy covers loss or damage to the contract works, predominately erection of machinery coupled with testing, including legal liability to third parties, arising out of the performance of the contract. Certain exclusions can be extended subject to the payment of additional premium.
- Material loss: the insured project loss caused by any accidents or natural disasters except the exclusions.
- The third party liability: according to law, the insured shall assume the compensation liability for the personal injury or property damage to the third party in construction sites and adjacent areas caused by the accident that directly relates to the insured project.
- Exclusions: engineering design, construction technology error, construction material quality defects, mechanical damage of machinery and equipment that happens without external momentum.
More than 40 special clauses are available on the basis of risk assessment and payment of additional expenses, including clauses in respect of strike, riot, and civil commotion, limited liability insurance period clause, extended liability guarantee period clause, special fee clause, clause in respect of buildings and tunnels in earthquake region.
Fidelity Guarantee Insurance will provide indemnity to employer against loss of money or property as a result of acts of fraud or dishonesty of any employee of the insured during the period of insurance, and during the uninterrupted continuance of employment of the said employee, and in connection with the occupation and duties of the said employees.
This policy covers your pecuniary loss or goods belonging to you due to the act of fraud or dishonesty committed by your employees:
- During the Period of Insurance
- During the uninterrupted continuance of employment of such employee
- In connection with the occupation and duties of such employees and,
- Discovered during the aforesaid period of insurance or within 6 months after the death, dismissal or retirement of such employee whichever shall happen first
The standard clauses and extensions are:
- Auditors and Accountants Fess up to an agreed sum
- Automatic Reinstatement of Guarantee Amount
- Automatic Additions and Deletions of employees
- Extension of discovery period (12 months) – to be granted on selective basis
- Payment on Account
- Premium Adjustment
- Loss Notification (30 days)
- Misdescription clause
- Losses caused by unidentified employees – to be granted on selective basis
- If the nature of the employer’s business has changed
- If the duties and conditions of employment have changed
- If remuneration of the employee is reduced without sanction by the company
- If the precautions and checks for securing accuracy of account are not observed
Also known as consequential loss insurance, Fire Business Interruption Insurance provides indemnity to the insured in respect of loss of profit. Any loss under the material damage policy will affect the business interruption insurance as this will lead to interruption in the business in terms of loss of production, sales and consequently earnings. The insurance can only be taken together with fire insurance (please refer to Fire Insurance under Personal Lines section).
The policy compensates any loss resulting from fire including damage by any additional perils specified in the material damage policy in respect of:-
- Loss of gross profit following reduction in turnover
- Increase in cost of working
Depending on the insured’s needs and subject to the insurer’s agreement and the payment of additional premiums, the basic policy can be extended to cover the following special perils:-
- Specified/Unspecified supplier’s premises.
- Prevention of access extension.
- Public utilities extension (water, electricity and gas).
- Specified customer’s premises.
- Infectious or contagious diseases, murder, suicide, pest, food or drink poisoning or defective sanitary arrangements
Since the business interruption policy comes together with the material damage insurance, the exclusions will be similar to material damage policy.
This policy covers any loss or damage to goods conveyed on land by road or rail or by boat for short journeys. The cover provided on all risks basis, indemnifying the insured for loss or damage to goods by fire, accident, theft or pilferage while being loaded or unloaded from any vehicle or passenger or goods train of temporarily housed in the ordinary course of transit, whether on or off conveyance.
- Wear and tear, deterioration
- Consequential loss of any kind
- Loss to goods whilst temporarily housed in the course of transit for the purpose of storage, making up, packing or processing
- Theft or pilferage by the insured’s employees
Liability insurance also known as Commercial insurance protects you in the event you are sued for claims that come within the coverage of your liability insurance policy.
Types of Liability Insurance:
PUBLIC LIABILITY INSURANCE
This type of insurance would cover a business if a customer or member of the public was to suffer a loss or injury as a result of its business activities, and if that person made a claim for compensation. The insurance would cover the compensation payment plus any legal expenses.
PRODUCT LIABILITY INSURANCE
Product liability insurance covers the cost of compensating anyone who is injured by a faulty product that your business designs, manufactures or supplies.
PROFESSIONAL INDEMNITY INSURANCE
This policy is a form of liability insurance that helps protect professional advice and service-providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit.
DIRECTORS AND OFFICERS LIABILITY INSURANCE
This policy is a liability insurance payable to the directors and officers of a company, or to the organization(s) itself, as indemnification (reimbursement) for losses or advancement of defense costs in the event an insured suffers such a loss as a result of a legal action brought for alleged wrongful acts in their capacity as directors and officers. Such coverage can extend to defense costs arising out of criminal and regulatory investigations/trials as well; in fact, often civil and criminal actions are brought against directors/officers simultaneously.
WORKMEN’S COMPENSATION INSURANCE
This policy cover the employer in respect of the statutory liability under the Workmen’s Compensation Law(s) as well as at Common Law to the employees who are generally not covered under SOCSO.
This policy indemnifies the employer against all sums for which the employer shall be liable to pay compensation to any employee for personal injury sustained by accidents or occupational diseases arising out of and in the course of this employment under the Acts.
FOREIGN WORKERS’ COMPENSATION SCHEME
Employers who are employing foreign workers must comply with the statutory requirement under Section 26(2) of the Amended Act 1996 of Workmen’s Compensation Act 1952 to purchase this insurance to protect their foreign workers.
This policy indemnifies the employer under the Act in respect of compensation for employment injury as well as non-employment injury sustained by your foreign workers.
FOREIGN WORKERS HOSPITALIZATION AND SURGICAL INSURANCE SCHEME
The Foreign Workers Hospitalization and Surgical Insurance Scheme (FWHS) or better known as SKHPPA is specially designed in view of increasing Hospital and Surgical charges and to reduce financial burden of the Employers of foreign workers in the event of hospital admission of their foreign workers due to accident or illness. Coverage is required before work permit is issued by Immigration Department for both new and renewal applications.
EMPLOYERS’ LIABILITY INSURANCE
This policy covers the employer because the employer may be at risk of being sued by those employees who are not protected by Workmen’s Compensation Acts or SOCSO.
This policy indemnifies the employer against liability at law to pay compensation and cost and expenses to your employees in respect of accidental bodily injury or disease arising out of or in the course of employment. The standard Common Law limit is RM1,000,000 any one accident and in the aggregate.
Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or cargo by which property is transferred, acquired, or held between the points of origin and final destination.
Types of Marine Insurance:
MARINE CARGO INSURANCE
Marine cargo insurance policy insures property while in transit against loss or damage arising from perils associated with the navigation of the sea or air and subsequent land and inland waterways.
MARINE HULL INSURANCE
Marine Hull Insurance policy covers loss or damage to hull and machinery. The hull is the structure of the vessel. Machinery is the equipment that generates the power to move the vessel and control the lighting and temperature system such as boiler, engine, cooler and electricity generator.
AIR CARGO INSURANCE
A type of insurance policy that protects a buyer or seller of goods being transported through the air. Air cargo insurance is designed to protect the insured against items damaged, destroyed or lost. Cargo insurance is offered through insurance companies, some freight forwarders and trade service intermediaries. The amount of coverage and deductible required with this insurance varies, with each insurance provider.
This policy covers for loss of money whilst in the transit and whilst kept in locked drawers, safe or strong rooms or due to any hold-up whilst on the business premises. Money will comprise cash, bank notes, currency notes, cheques, postal orders or money orders.
- The cost of repair or replacement of the safe or strong room, as a result of theft or attempted theft, if these items are not specifically insured
- Compensation in the form of a personal accident benefit to employees who may be injured during a robbery whilst accompanying or carrying money
- Personal accident to the messenger or custodians
- Armed robbery and hold-up at the insured’s premises
- Riot and strike
- Messenger absorbing with money
- Damage to safe and/or locked drawers
- Losses arising from fraud or dishonesty of insured’s employees
- Shortage due to errors and omissions
- Losses from an unattended vehicle