Loss of Profit insurance why agent shy away

Published September 10, 2017July 29, 2017 by jamin

Loss of Profit insurance why agent shy away?

The Loss of profit insurance sounds an alien phrase to the majority of the agent, nevertheless, it brings a profitable for an underwriting profit for the year-end. Despite the fact it is a complementary policy to the fire insurance for the existing client, the agent silence on this as if it is a taboo subject to even those veterans. Stumbling across an agent serving an insured for the past 2 decades, never raise the issue on this loss of profit insurance. Consequently, he would out of business for the following year, when a knowledgeable, armed competitor edged over the business.

Industrious to learn this subject, without the Accounting, grasping to analyze and digest this subject is a tremendous task for me. Enrolling in the class whereby I was the eldest peer among the student half of my age. Doubling hard, sacrificing my family time, enrolling for another 3 subjects for Australian Institute of Insurance via self-study. Passed 4 with 3 credit another with a distinction in addition working in a public listed insurance company and managing my logistic firm. No Labor, No Gain is my philosophy. Firmly believe the saying learning begins at the womb, ending at the tomb.

What is Loss of Profit Insurance?

Well, in basic terms, loss of profit insurance ensures your business having a decent income when impossible operation at full capacity with declining revenue as you normally would and the subsequent loss of profits

So, essentially, it covers the loss of profit your business will suffer consequences damage from an insured peril. Insured perils typically include fire, floods, hurricanes, storms, earthquakes or volcanic eruption.

The types of events impact where it’s possible to halt your business operations for a period or operate at a lower capacity, typically result in a loss of profit. It ranges from between being a minor blip on your business’s earning potential radar to completely obliterating your business.

Interpreting the coverage

An insurance policy is an evident contract between the insured and the insurer, spells out the right and duties between them, particularly, specifies the circumstances under which the insurer will pay the insured. And if the insured or anyone wants to know the coverage provided by the insurer, by finding the answer in the policy.

Policy couched in legal terms and phrases, not surprisingly few people including agents actually read and understand it. Such a situation judge an advocate of creative insurance marketing should not condone. After all one of the basic selling skills is product knowledge, indeed “Know the product” is one of the commandments practiced religiously by disciples of “creative selling” or “high impact selling”.

Is a problem for Malaysian scenario, not just food for thought?

Agents generally lack in-depth product knowledge that they are selling. The lacking not only blunts one’s competitive edge but also prevents one from reaping opportunities offer. Apparently, one contributing factors is the tangible aspect of the insurance product in the form of a legal document, undoubted hard read and understand due to the lengthy sentence full of technical jargon words. Both the insured and the agent, gratefully, they could spare the effort to read the policy. Another reason, many insureds show little interest in the exact coverage offered under such policy until they come to a crunch when a claim arises. Such apathy coupled the incompetence of many agents to explain the policy coverage fluently resulting in unjustified criticism that insurance product hides in a black box and you probably won’t know what is inside until there is a claim.

Loss of profit, what to cover in my next coming post?

You acknowledge my article

Please share it out with your friend or family member. Sharing is joy doubles. Welcome any suggestion and constructive comment or be a subscriber to my mailing list.

Email me at [email protected].

Thank.

Buy your domain name here.

Life insurance claims nursing tutor silences husband

Published September 13, 2017July 13, 2017 by jamin

Love is blind, life insurance claims nursing tutor silences husband perpetually for debt settling, happening in our neighboring a land of smile. Cool-blooded nursing tutor silenced her 6 months, husband, a grisly horror life insurance claim due to extravaganza compulsive buying branded bag and customized designer shoe. It is un unjust society where the murder had scot-free to another nation by bribing the concerned authority, a criminal proof plan. Love at sight meeting for this metrosexual couple at a posh hotel lobby, promptly married within a month. It ended with a most unnoticed traceable tragedy. Devil with an Angel dressing, let us be alert and aware such white- collar culprit.

Love at first sight marriage

King and Queen of the day, after the grand and blissful celebration on a luxury yacht, cruising along the city main river with all colleagues, 14 days overseas honeymoon follow suit, envy by many.

The dust has settled and back to their normal lifestyle. A faithful wife to her husband by night, a diligent nurse at the hospital by day, with her loving and career, minded spouse. She prepared the breakfast and cooking their meal happily together, a good neighbor in their gated community suburban residences. The 29 years old wife loved shopping during the weekend, having a soft spot for bag and shoe with her spouse in tow with bags of victory good. Born with a silver spoon, finally, her flamboyant life bares the true color to her husband, often ending with gruesome quarreling.

Dead

Her spouse did not rise up after she finished preparing his breakfast before off to the bank at 7.30 a.m. daily. Lying motionless on the king-side bed, she confirmed that her loving hubby dies of naturally dead at the age of 32, subsequently, not suspicious case, no need for a postmortem.

Exorbitant Claim

Instantly, after the funeral over, she went straight to the insurer filing a claim of her late husband life policy, as she was the main beneficiary. $ 1 million exorbitant sums insured for a young bank manager arose of a doubtful claim as the policy inception date less than a year. The insurer called a team of expert to handle such a huge quantum of claim collaborating with the bank and the insurance agent and a famed pathologist.

Confirmed by the agent the nurse approached him to have a policy on the life of her husband. Over the moon, the agent let her filled up all the proposal form and duly signed by the insured, payment with her own credit card.

I let my hand handle this fraud claim when the insurance company requesting to solve this mysterious claim. In the proposal form for a large inquiry for a lump sum insured, she wrote 8 years of marriage which later by the registrar of marriage clarifying the marriage of 6 months. The forensic document analysis had verified that she fabricated her husband signature.

The final verdict

Cremation of corpse did not deter the finding cyanide toxin from the ash of her late husband by a forensic pathologist. Neighbor provision shop she frequents saying she daily buying fresh cassava leaf to make a drink for her husband in the morning. Coupling the smoking habit like a chimney stressful job as fund manager of a foreign bank, indeed a low torturing poison death to him. The final verdict he died of consuming cassava leaf juice blended with some tobacco leaves accumulates of cyanide toxin in his body.

Compulsive Spender

The insurer checked with the credit card company about the spending behavior revealing a compulsive spender weekly on her bag and shoes amounting $1500 a month. Earning $1200 a month, she indeed grossly overspent, thus there is a saying woman complaining not having enough shoe to wear, never enough filling up her wardrobe.

Knowing that she failed to claim the insurance money, she escaped to other nation by bribing those corrupted officer concerned. A sobbing true story the downfall of prominent foreign Ivy graduated nursing tutor and a young innocent bank manager had gone forever due to the compulsive buying behavior.

You like my article

Please share it out with your friend or family member. Sharing is joy doubles. Welcome any suggestion and comment or be a subscriber to my mailing list.

Email me at [email protected].

Thank.

The Fast claim on equipment breakdown insurance

Published June 26, 2017June 2, 2017 by jamin

The Fast claim on equipment breakdown insurance. Generally speaking, most of the household has a numerous of equipment at home. It can be kitchen electrical appliances, air-condition, robotic vacuum cleaner or lawn movie machinery. Likewise, it is the same for a factory using equipment for fast production.

Mega Risk Insurance

A plastics molded manufacturer insured their factory building, machinery, and loss of profit insurance with me. The Bank provided the loan facilities to insured, but not keen to cover this high-risk upon completed the premise. I was called to handle this mega risk for a special rating instead of following the fire tariff. An engineer from the HQ came down to survey the premises and recommend the special rating for PIAM approval after testing all the sprinkler system, water tank vortex, water hydrant, fire extinguisher and the firefighting squad team.

We have a whole day discussion how much coverage was required for the risk.

Machinery Coverage

Since all the machinery was imported directly from Japan. I need the original invoices to convert from Japanese Yen to Malaysian Ringgit.

“All the machinery is worth around RM10 million, it is best to cover this amount,” I advised the owner.

“I think we should cover less than this amount less say 20% depreciation.” the accountant said.

“Why? I asked him.

“The machinery would depreciate at least 10 to 20% after a year. We will write down for say 10% of depreciation based on our accounting system.”

“In insurance term, we “appreciate” for your used machinery less than 5 years old, provided that you have to cover the sum insured based on the original invoice value. We will apply average in the event of the claim”

“What do you mean the word average”

“Average is a penalty, same like the franchise in marine insurance.”

“You mean deduction from the claim,’

“Yes, Mr. Accountant, as all the machinery imported from Japan directly, I will add the adjusting and replacement cost value clauses. It is free of charge.”

What is replacement cost value?

Replacement Cost Value is the amount it would cost to repair or replace an item with one of like kind and quality as the original – in today’s market without deduction for depreciation.

3 years later, a short circuit completed blazed the one unit of the equipment into the charcoal black. It was a total loss, the machinery needed to import from Japan. The Japanese Yen had appreciated more around 35% against Malaysia Ringgit.

“Jamin, we would like to claim the total loss for this unit of a machinery of RM100 000.00 as we have the coverage.” the owner called me.

“Please do not worry, the insurer will pay you the full amount. Please request a copy of performance invoice from Japan along with duly signed and completed the claim form and forward to us.”

The final verdict

The owner called and invited me for a business lunch after I personally handed over the cheque amounting to RM135 000 for the total loss claim. If the owner agreed with his accountant to cover Rm90 000 for the said equipment just to save an insignificant amount on premium. The claim would be RM90 000/135000 x 100% = 66.60%. The average rule applies Rm90 000 x 66.60% = Rm59 940 would be the final claim amount. Do you want to have insurer pay you RM135 000 or RM59 940?

Why extra?

Why RM135 000 instead of the original price of RM 100 000. It is due to the replacement cost value at the current market price without any deduction for depreciation. The reader can also claim the household electrical appliances for new for old replacement.

If you like my article

Please share it out with your friend or family member. Sharing is joy doubles. I welcome any suggestion and comment or be a subscriber to my mailing list.

Email me at [email protected].

Thank.

Claim insurance damage on fallen tree and branches

Published June 28, 2017May 27, 2017 by Jamin

Claim insurance damage on fallen tree and branches. The atmospheric warm has gradually increased the earth temperature by a few degrees over 5 decades. It is mainly due to the massive deforestation by human economic activities. Having said this, Malaysian generally does not like to plant the tree around their house compound. They often worry about who is going to pay for their property damage due to the fallen tree or branches? Is it a naive question?

Neighbor’s fallen tree

” Jamin, my neighbor house damaged by his own fallen tree last night during the heavy downpour coupling the strong wind, very fortunate, the tree does hit my root, otherwise I will sue him for compensation. Anyway, he deserved it as I did warning when we moved into our new house.” he sarcastically told me in the afternoon high tea.

” Peter, don’t be so mean to your neighbor, did you help him to clear the debris removal of the fallen tree?

“Sorry, it is none of my business, he asked for it.”

“Peter, your neighbor does he claim his fire insurance”

“Jamin, you mean we can claim fire insurance? What does the fallen tree have anything to with it?

“Yes, of course, did you remember when my house’s one of the Rhur trees big branches hit my rooftop during the last month strong wind?.

“Yes, I do”

“Ask your neighbor to contact me if he needs a helping hand.”

My own fallen tree

It was in 2014, my family slept around midnight after outstation long distance travel. I heard a loud noise hitting my roof echo silence night. We took no notice of it and continuing our sleep.

The next morning, we discovered that one the 2 feet in diameter branches with almost 30ft long hit the edge of the roof. We suffered no injury.

My family panicked. I told my son took the from Canon camera out from the dry box with the 18-200mm zoom len.

I took the fallen branches from the main trunk and the damaged roof of the various position including the close-up images.

The logger cut the branches with the removal of branches debris. I called a handyman to repair the damaged edge roofing. Since it occurred on Saturday, in order to mitigate the further loss, I immediately instructed them to do within a day.

On Morning day I informed the insurer about the loss claim. They formed me the fire insurance claim form.

Claim Documents

I submitted the following the documents to claim the loss due to fallen branches.

1.) The duly completed claim form signed by me.

2.) All the images snapped by me and I emailed to the insurer.

3.) The original bills of repairing roofing, the sawing of the 2 ft diameter log and the removal of the debris of the branches and broken tiles.

4.) I photocopied of my bank account.

Claim Approved

After one week, I received the approval offer letter RM (4750-250) = RM4 500.00 for the final settlement. A few days later, I checked my bank account, the insurer had already bank in the claim amount. In less than 14 days, my claim was all settled.

DAMAGE BY FALLING TREES OR BRANCHES AND OBJECTS THEREFROM

Rate: 0.010%

By paying an additional premium, the insurer shall extend to include loss or damage to the property to walls, gates, and fences around directly resulting from damage by falling trees or branches and objects.

The insurer shall be borne an excess of RM250.00 of each and every claim as ascertained after the application of any condition of average.

Applying all the policy incorporated herein. Any loss or damage shall be deemed to be a loss or damaged by fire.

If you like my article

Please share it out with your friend or family member. Sharing is joy doubles. I welcome any suggestion and comment or be a subscriber to my mailing list.

Email me at [email protected].

Thank.

Storm and tempest cover house on Fire insurance

Published September 27, 2021May 19, 2017 by jamin

Storm and tempest cover house on Fire insurance. I was away for 2 months having a tour to Sarawak state during the Chinese New Year. I had a good time at the Kapit for a cool forest stay and Sibu for the Foochow-style cooking steam fish. The Kanowit town for the longhouse stays etched in my memory. Kuching snapping scenic sunset pictures of thousand at the waterfront.

One of my old buddies called to me when I back to Johor.

Storm and tempest cover house on Fire Insurance

“Jamin, did you receive my WhatsApp video on the zinc roof dangling dangerously at my 2 story factory?

“Mr. X, when and how it happens?

“The windblown off the zinc roof on 14 Feb night, I discover the next morning?

“Did you do any repair?

“No, I make inquiries with one insurer’s branch manager and another veteran agent with 3 decades of insurance experience. Both agreed that it is not payable.”

“Why?”

“As the zinc roof still dangling by the side of the wall, the workmanship or rather upkeep or maintenance shall not be payable in the fire insurance policy.

What is Storm and tempest cover house on Fire insurance?

“Don’t worry, please email the policy jacket to me, after reading throughout the policy, I shall advise you what to do.” I consoled him

After study the policy content, I called Mr. X

“Please get a handyman to repair the zinc roof immediately to mitigate further loss. Also, get the repair bill for claim purposes. Meanwhile, I shall liaise with the insurer for the claim form and information about the loss claim. Even though it is almost two months have lapsed, you’re still entitled to the genuine claim.

Claim approval under storm and tempest cover

I helped the insured to complete the claim form, and enclosed the repair invoice via registered post to the insurer. 2 weeks later the claim was approved less excess of RM200.

The insured called me for a meal and asked me how I did it, why others gave the negative feedback answer. In this stage, I reserved my comment because the 2 persons mentioned earlier were also my friends. One of them happened to me, my insurance mentor when I joined this industry.

What are Storm and Tempest in Fire Insurance ?

A storm is defined as a violent atmospheric disturbance that produces severe winds, accompanied by rain, snow, or hail or by thunder and lightning.

A tempest is an exceptionally severe storm. Do we still recall the British hurricane of October 1987?

Storm and Tempest cover means to you

A storm or tempest damages your property. You are protected against the potentially very costly repairs. In the above case, if the insured does not repair the zinc roof, gradually, the wiring system will get wet and soak in the rainwater. A short circuit will prevail soon causing more damages and lead to a huge claim. Do you want it, of course not? Nevertheless, prevention is better than cure. The insured pays an extra premium, has peace of mind.

Coverage

Storm and Tempest cover allows you to claim for damages that occur due to a severe weather event. It includes damage to the building structure or to items within the building damaged by the storm. For example office equipment affected by a leak from, or collapse of, an otherwise sound flat roof. Do you want to undergo a major repair of your roof? Of course not, it is advisable to pay an extra premium to have such extensive coverage.

If you like my article

Please share it out with your friend or family member. Sharing is joy doubles. I welcome any suggestion and comment or be a subscriber to my mailing list.

Email me at [email protected].

Thank you.

Bank misrepresents consumer putting insurer at risk

Published April 24, 2019May 6, 2017 by jamin

Bank misrepresents consumer putting insurer at risk. The bank is making an excess profit out of ignorance consumer’s expenses and putting the insurer at risk especially in the underdeveloped nation. There is a lack of the law and regulation to govern the bank activity.

Freight Forwarder.

The freight forwarder besides handling the logistic of the client’s cargo, also, advises the purchase of marine insurance. Batu Pahat manufacturers imported textile cotton yarn from Taiwan and Pakistan. Export the garment and knitted apparel to Europe and North America respectively via Singapore port. When the import shipment arrived at the port, after the customs’ inspection, the FCL was then break bulk into 20′ or 40′ lorry before conveyance to its destination.

2 Insurance Policies

One need to have the bill of lading, invoice, packing list, insurance policy and the customs’ form for customs declaration purpose. I often noticed that there were 2 insurance policies enclosed.

Bank misrepresents

I later found out the reason for 2 policies coverage for the same consignment. When the bank issued a letter of credit. It also helped customers to buy the marines policy. The 1st policy was to cover for the sea voyage and the 2nd policy for inland transit after Singapore customs’ clearance at the destination, the local practice for years.

Claim repudiate

One importer purchased mainly on Fob term, there was another policy from a local insurer to cover the inland transit. It protected her shipment from accident damage. She did not want to repeat the same ill fate as her elder brother.

The electronic part imported from Taiwan totally damaged at the midway to the factory. The insurer repudiated his claim stating the coverage only up to port only, and not to his factory.

” This is weird, I am sure you know XYZ company, we pay the full claim for the electronic part that accidentally damaged at the highway,” I explained to my potential client.

” Oh… you are only to handle the marine insurance for them. When are you free to drop by my office to discuss the cargo insurance?”

International Trade term

If you buy on a CIF term, it is fine with the same insurer for 2 separated policies. Buy on FOB term, there is a foreign insurer to cover the sea voyage. The local insurer has a disadvantage covering the inland transit. Who knows if there is any invisible damaged during the sea adventure. The best advice to have the cargo thoroughly examined before loading.

There is a charge of opening a letter of credit, another 2 insurance premiums to pay. Thus the bank is making an excess profit out of the client’s ignorance.

The solution

I advised all my clients for both the importer and exporter for CIF term. The “Warehouse to warehouse clause” must insert into the policy. It must an All risk or ICC “A” to protect themselves, It is also a win-win situation for both insured and insurer. It saves a substantial amount of insurance premium. Also, it is much more convenient to deal one insurer and not two. No more any finger-pointing when a claim occurs.

If you like my article

Please share it out with your friend or family member. Sharing is joy doubles. I welcome any suggestion and comment or be a subscriber to my mailing list.

Email me at [email protected].

Thanks

Claim and underwriting Rosewood Coffin Scratch

Published May 4, 2017April 28, 2017 by jamin

Claim and underwriting rosewood coffin scratch. It was one of the weird kind of cargo that I had to underwrite during my 23 years working experience in the general insurance industry.

Introduction

My partner of second handed imported car tire from Japan and South Korea Mr. Leong of Singapore called me on Monday, April fool morning to underwrite a shipment of 2 exorbitant coffins.

“Can I have the detail of this shipment? I asked him.

“Please liaise with the producer, Mr. James at Ho Chi Minh City, Vietnam shortly, he is expecting your call urgently, as the shipment is ready.”

“Good morning, Mr. JAMES, I am Jamin, Mr. Leong partner from Singapore. Can I have the detail of this consignment?”

Customised order

“My client, a business tycoon from Singapore has called to make this customized rosewood coffin with dragon and phoenix carving on both sides for his elderly parent. We use the high-quality craftsmanship for the carving. Indeed a filial son to his parent. It is hand carving by 10 craftsmen for 3 months to complete a coffin. We take total 6 months to finish the whole the assignment. Rosewood must be more than 100 years old to make such exclusive coffin.There is a sparkling of gold dust sprinkle on the carving to give a shiny beam look. Later the coffin would be cremated.

Tailor made

“What other requirement or special clauses for this cargo.?

“The client would not accept any scratch on the outer surface of the carving or any other part of the wooden surface. It means to bring in bad omen or misfortune for the descendants. It is due to this clause, no insurer in Vietnam dare to cover this type of risky adventure. Is it alright with you?”

“Mr. James, it is fine with me, but I need you to follow strictly my instructions before the shipment.”

Pre-shipment survey

1. A Switzerland cargo surveyor was needed to inspect the packing before stuffing into the flat rack container.
2. The surveyor had to take a detailed close-up video clip on every inch of the cargo especially the dragon and phoenix carving.
3. A dendrochronologist’s verification report that the age of the rosewood must be more than 100 years based on the ring of the wood.
4. Double layer corrugated box outside and styrofoam on the inside for packing purposes.
5. The coffin must be wrapped with the air tight thick plastic bag to prevent moisturized of the wood.
6. A professional handler must be supervised the stuffing of the container.
7. There must be protective foam stuffing in between the container.
8. A 30% was added to the invoiced valued of S$2 million to determine the sum insured.

Policy issued

I issued the policy with following clauses:-

ICC “A” clause
Constructive total loss if container dropped into the sea
Loading and unloading
Hijacking and Armed robbery especially open sea near the Southern Philippines and Indonesia.
Strike riot and malicious damage.
Warehouse to warehouse clause.
Scratched and dented.

Claim

The cargo arrived Singapore sound. The mishap happened during customs inspection. One of the professional handlers had accidently pierced through the double layer hard carton paperboard with his long knife. There was a visible scratch on the dragon head of this exquisite coffin.

I had to file a claim using the earlier video clip done by the pre-shipment surveyor at Vietnam.It was negligent of the freight forwarder carried out their duty without utmost care.
The claim amount was $1.3 million less an excess as stating the marine insurance policy. It was an agreed value policy. Of course, there was a salvage value for this kind of high quality and costly rosewood.

If you like my article

Please share it out with your friend or family member. Sharing is joy doubles. I welcome any suggestion and comment or be a subscriber to my mailing list.

Email me at [email protected].

Thanks

Bank unethical practice forced client insured property risk

Published June 2, 2017April 20, 2017 by Jamin

Bank unethical practice forced client insured property risk. We love and hate the bank. They forced us to take an insurance policy when the property loan is approved. Someone called them they are the licensed loan shark or legalized Mafia bully the poor and apple polishing the rich. I had a nasty experience with one of the bank staff.

Bank Loan approved

“Mr. Jamin, your housing loan is approved. Please sign on the dotted line on a blank house owner proposal form with a sum insured for a quarter of million. In the event of a fire, you can claim for the said amount.”

“Only fire? What about the storm and tempest, impact damaged or bush or falling, subsidence landslide?

“No, only fire, Mr. Jamin”

“Sorry, no signature, I use my own insurer which is also your panel of the insurance company.”

Fire insurances

I brought 2 fire insurances on the building with all the necessary perils, I assigned a quarter million assigned to the bank another balance $600 000 to my own name to avoid the average clause in the event of an either partial or total loss. Another householder policy to cover fire and full theft for the house content.

Victim

My investor in the unit trust or mutual fund holder was a victim of the bank. I could not help her when signed the fire insurance proposal form as I went oversea excursion with my whole family.

Land Building

She purchased a corner lot land residence building, the property was earlier converted into a commercial lot. She took a 90% margin loan out of 2 million on the purchase price. The bank gave her a favorite low-interest rate with 8 units of condominium plus a small scale factory building in the same year with the same bank. Everything went through smoothly without a hiccup, but not every day was a sunshine day.

The fire razed the building to the ground due to short-circuit. No injury. The car repair workshop closed on Sunday.

Verdict

“Mr. Jamin, can I get back the sum insured of 1.8 million dollars? It was 10 years loan tenure. another 5 more years to service the loan.

“No way, you cannot get the full sum insured as it depends on the reconstruction cost recommended by the fire adjuster. I am not sarcastic, but true, let us wait for the final adjuster claim report.” I consoled her.

She could only claim for 700 000 dollars based on the finalized claim report. Speechless and dumbfound on seeing the recommendation as she overinsured her property and paying the extra premium to the drain.

“Why you take the bank word as gospel after all money is not a problem to you. Take it as a costly lesson learned” I scolded her in her office.

The bank often takes the panel of the real estate appraiser’s valuation report as a guide to insured the property. The 2 million dollars building comprises of (1) the element of profit, (2) the land price tag. Both are not taking into consideration in the event of a claim. The insurer only indemnified you for the loss the building prior to the fire occur. The property appraiser and the bank have a shallow deep knowledge of insurance. Be wise to consult the insurance broker who has the insured’s best of interest. The bank just acts as an agent to the insurer, who has to obey the rule and regulation lay down by the insurer.

If you like my article

Please share it out with your friend or family member. Sharing is joy doubles. I welcome any suggestion and comment or be a subscriber to my mailing list.

Email me at [email protected].

Thanks

HA

Click Here!

How to claim employee dishonesty coverage?

Published June 5, 2017April 7, 2017 by jamin

How to claim employee dishonesty coverage? In the course of employment, sometimes the employer often discovers the stock gradually diminishing. It is very hard to detect the culprit, especially in the department store. During the annual stock-taking, a 2-3% marginal loss is all right for the management, as it has already taken into consideration for the loss.

A tragedy case I handling for more than a decade, still fresh in my mind.

Logistic

A lady boss of a logistic company once called me to insure their company good in transit. I suggested to her another policy compliment the shortfall in the good in transit policy. She agreed to have another policy to cover the dishonesty of the employee during their employment. The fidelity policy was issued with the full list of employees’ name and identity card number.

Employee’s Particulars

“Why do you need to have their particular” she questioned me.

“The reason is I need to check any criminal background especially the driver and attendant. The traffic police department should have all their offenses and also drug taking while driving.

A few months later when the both of policies were in forced. She called me about the loss of 50,000 dollars of consignment.

Police Report

“Please make a police report and also the driver’s particular. Let the police dealt the driver for further investigation.” I advised the panicked owner.

A few days later the police arrested the driver.

The driver had worked for the company more than 10 years, a diligent and responsible married man with 3 kids plus another one on the process. He confessed to the police that he sold the whole cargo for 25000 dollars. The money was to pay the high bill for his wife who was undergoing kidney dialysis. He was at the wits end in seeing wife getting weaker as the day went by. She could hardly undertake any household chores. The eldest daughter had to stop schooling at primary year 5 to take care of the family.

After knowing the predicament of the driver, she canceled the police report. She let the driver continuing working with her. With wide social contact, she managed to get the patient undergoing kidney dialysis at the government hospital. The kind and soft-spoken lady boss gave another 20 000 dollars to her driver repairing his depleted house besides, sending back his daughter to school until high school with fully sponsored by the company. She worked for her until tied her nuptial knot with another transporter’s son. All end well.

The fidelity guarantee policy response in this case as she brought policy with sum insured of 100 000 for each loss with a 1% excess. The insurer paid 49 000 after deducting the excess.

Fidelity Guarantee

An insurance policy designed to indemnify the Insured (the employer) for the loss of money or property sustained as a direct result of acts of fraud, theft or dishonesty by an employee in the course of employment.

Employee theft insurance.

It protects the business against property thefts committed by employees. It is also called employee dishonesty coverage. Employee theft coverage may be written alone or in conjunction with other crime coverages, such as Computer Fraud Coverage, under a commercial crime policy.

If you like my article

Please share it out with your friend or family member. Sharing is joy doubles. I welcome any suggestion and comment or be a subscriber to my mailing list.

Email me at [email protected].

Thanks

The Bursting of water tank caused damaged to property

Published July 19, 2017March 31, 2017 by jamin

The Bursting of water tank caused damaged to property. Do we still remember Condo pool’s glass panels crash to the ground? Fortunately, there were no reports of injury.

Nowadays, finding a water tank on the rooftop is quite common in our home and commercial building. A case I recalled vividly in 1995. A greenhorn in general insurance except for marine insurance which I acquired during 6 years with Robert Kouk dealing with Ship Chattering for both import and export shipment.

A Greenhorn

After a few months on the job training, I closed fire insurance on a double-floor shop retailer doing trading and also, repair sewing machine. On the second year of renewal, the insured called me his machinery had damaged by the bursting of the water tank on the top floor. A crack in the cement ceiling, water gushing down from the roof-top, damaged some of the new and old machinery.

Painful Mistake

Naively I consoled confidently to the insured. “Sure you can claim under the commercial fire to your plant and machinery.” Subsequently, I informed my branch manager about the scenario.

“Sorry, Mr. James, you could not claim a single cent for the water damaged to your machinery.” My branch manager informed the insured the outcome result after checking the policy jacket. I walked off silently, ashaming to face the insured. I learned a painful lesson.

After the incident, I signed up the former Australian Insurance Institute course for self-study. Realizing that I lacked the product knowledge to handle such situation.

Pet Shop

A few years back, there was a case in the state Johor Malaysia, whereby the pet shop was burnt down by fire. The animal either died of suffocation or burnt to charcoal black. The fire brigade sprayed water to put off the fire. An air-condition dealer on the next door found out that all new and repair air-conditioned had been damaged by the water. The owner lodged a claim report for the damaged to his machinery and his stock.

Smiling pet shop owner was laughing all his way to the bank after receiving the full claim. But he regretted not listening to the agent to buy a loss of profit or consequential loss of profit insurance.

No Claim

The gloomy faced air-conditioned owner cursed himself to save a penny, in the end, he lost an arm. Saving a small amount of money, he lost 200 000 dollars on the stock and wiring damaged. A stubborn businessman did not want the extension peril of Bursting of the water tank when entering into the contract of insurance.

Let say the sum insured be 500 000 dollars. The Rate was merely 0.005%. He saved 25 dollars but in the end lost Rm 200 000, indeed dug his own grave, There is an excess of 100 dollars. Thus, the final claim would be 199 900 dollars.

Bursting and/ or overflowing of Water Tanks, Apparatus, and Pipes

The policy covers damages caused to the insured property by water or otherwise due to overflowing of water into the tanks by accident or bursting of the water tanks, water pipes or other apparatus like facility water purifiers.

It is advisable to cover commercial building or house fire insurance with the bursting of the water tank. It is an automatic cover for house owner policy. It is not worth to save such a small sum of premium, but in the end, losing an arm and leg like the air-conditioner dealer. It is my advice to those insureds don’t be so calculating and stingy.

You like my article

Please share it out with your friend or family member. Sharing is joy doubles. Welcome any suggestion and comment or be a subscriber to my mailing list.

Email me at [email protected].

Thank.