Loss of Profit insurance why agent shy away

Loss of Profit insurance why agent shy away

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?

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Life insurance claims nursing tutor silences husband

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.


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.

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Earthquake and Volcanic Eruption property coverage

Earthquake and Volcanic Eruption property coverage

The Earthquake and Volcanic Eruption property coverage under in the Fire Insurance for Malaysian. Without any apparent warning sign, a magnitude size of 6.00 on 5th June 2015 erupted at Mt Kinabalu had rocked the nation off guard. The  Sabah earthquake, not only devoured 18 life but brought masses destruction to the infrastructure and building with estimated total damage to US$2.84 billion. Consequently, we are no longer living the free earthquake zone. Malaysian starts to realize and the urgent need to have the earthquake and volcanic eruption for the house or commercial property.

The basic Earthquake and Volcano Eruption Clause

All kinds of damages including those arising directly or indirectly out of earthquakes,
tsunami or volcano eruptions including fire, explosion, landslide, and land collapse including the foundations and retaining walls in the cover.

Additional Covered Causes Of Loss

The following 4 items to cover the loss due the cause of


The Volcanic Eruption means  eruption,
explosion or effusion of a volcano.

Any Sprinkler Leakage resulting from Earthquake.

The Sprinkler Leakage resulting from  Volcanic
Eruption. Volcanic Eruption means the
eruption, explosion or effusion of a volcano.

All Earthquake shocks or Volcanic Eruptions
concurrently occurrence within 168-hour period will constitute a single Earthquake or Volcanic Eruption.
The expiration of this policy will not reduce
the 168-hour period.

Exclusion clause

The insurer shall not liable for any damage arising out
of the loss of insured items during fire and explosion caused by earthquakes or volcano.


Insurers are liable for damages in excess of Total Loss occurrence in 72 hours the period in damages caused by earthquake and volcano eruptions excluding fire.

The concrete building will attract higher deduction in comparing with a wooden structure as the former razes to the ground completely. Nevertheless, it is unusual to have an excess of $50 000 for any claim loss unless you can prove to the underwriter that building will build to earthquake resistance proof like in Japan. Sad to say that Malaysian government lukewarm attitude, sitting on the comfort zone has not acquired such enforcement skill.

Premium Rate: 0.010%

If you are insuring your commercial building for a sum insured of $2 million, thus, the affordable premium is $200 per year. Why saves a penny now, spending a fortune later to reconstruct your sweet home later on?

Important to have this clause

Occasionally occurrence tremor on the Peninsular Malaysia hailing from large earthquakes in the Sumatran plate
margin. The highest observation recorded VI on
the Modified Mercalli (MM) scale. No exception to East Malaysia with the localized earthquake rampages on properties damage and human casualties.
The peak VII on MM scale intensity earthquake on the Southern Philippine and in the Straits of Macassar, the Sulu, and the Celebes Sea had spilled over the Sarawak and Sabah.
The earthquake occurs, the magnitude size is not a contributing factor for asunder destruction, but the population density and fire as a secondary event.

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Lazada MalaysiaEarthquake and Volcanic Eruption property coverage 12

Bank wrongly insured different classes of fire insurance

bank wrongly insured different classes of fire insurance

Bank wrongly insured different classes of fire insurance.

The working class will always dream to have a roof over their head. In order to archive the goal, they toil hard from dawn to sunset.  Some even do moonlight on several jobs in a day. They save every a single penny. They called the modern Zombie living merely eat and sleep. They come out to face the sunshine when they save enough to make the 10% or even 30% down payment. Are they happy? Please read on.

Client’s Call

“Jamin, how come your insurer sent my fire insurance policy to the old address? The building had already demolished.” my relative called me during a fine morning after having my morning 10.00 break.

“Let me check first, I shall call you later.”

“What is the policy number you are referring to? I asked her.

“I do not have such policy number, could it be you taking a loan from a bank. It arranged the fire insurance on your behalf.”

Yes, it is correct the bank already auto debit my account for the past 3 years on this shop house.” she answered me with a soft tone.

I was on my way back home on a routine visit to the hospital.  I dropped by to read their policy, shocking to find out that the bank for the 3 years making the same imbecile mistake.

Classification of Risk

As per attachment here, the policy stating the building is vacant and occupied also the sum insured. But, in fact, it occupied as a shop doing retaining business. Dear readers, let us think out of the box.

Which risk is higher? Is it the vacant shop house or retailer? The answer is crystal clear the retailing business attract many customers, thus the higher the risk compared with the unoccupied building.

The vacant risk the insured pay lesser premium, higher for the retailer shop house. Occurring of fire razed the building to ash, will insurer pay? The Principle of Utmost good faith shall apply to whom.  Is the bank or the insured party?

Insurable Interest

Malaysia is a unique country with different rule and regulation. The local bank also has a subsidiary composite insurance. It could be a general or life insurance. Despite the Bank Negara Malaysia gave warning to the bank stating it could not force the borrower to buy fire insurance with them.   Nevertheless, it has fallen to a deaf ear, either the bank is greedy to make an excess profit out from the borrower or the insured is very ignorant. Do bank has any insurable interest in the building? Does the bank suffer any financial loss without the building?

Creditor Insurance

The insured is still continuing paying the installment even without the existence of the building. The bank providing the credit to the borrower, the bank should issue the creditor’s insurance to the borrower.  In the event, the borrower passed away, the bank would suffer the financial loss, as it has insurance interest on the loan amount, not on the building.

Under insurance

The Malaysian ringgit has depreciated against the US dollars about 30-35% coupling with the 6% of GST implemented 1st April 2015. It was inadequate to cover the building that brought from the developer in 2014. The purchase price was RM350 000.00 and the loan amount was RM244 000.00. On 2017, the sum insured was still the same amount as before without any upward adjustment.  No inflation for the past 3 years in Malaysia? Even the kid knows the answer. When a claim occurs, the average would apply. People would say insurer always conned people.

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Bauxite vessel sinks off Vietnam coast of Vung Tau

Bauxite vessel sinks off Vietnam coast of Vung Tau

Bauxite vessel sinks off Vietnam coast of Vung Tau. M.V.,”Bulk Jupiter” left Kuantan Port carrying a cargo of bauxite ore sank off Vietnam waters on the way to China killing 18/19 crewmembers. The only Filipino chef survival said that he did not know why the ship suddenly capsized and sank when it was about 150 nautical miles from the southern city of Vung Tau on the morning of January 2, 2015 (Vietnam time).

The cause of sinking

The liquefaction of cargo causing the cargo to behave like a liquid inside the cargo hold of the ship hence causing instability to the ship and making it basically turn turtle.

The following was my comment on the FB on 7th April 2017 in the Insurance Forum.


Under the Code, bauxite is stated to be a Category “C” cargo, with the following cargo composition: Size
70% of 90% Lumps:
2.5 mm to 500 mm
10% to 30 % powder.

We assuming the cargo is sufficiently dry and in any event has a moisture content below the Transportable Moisture Limit (the “TML”) which is, of course, a figure at 90% of the Flow Moisture Point (the “FMP”). In this case, the port surveyor engaged by the Charter Party i.e the shipper did not test the cargo before loading. If the test was not in their favor, the shipowner could refuse to load the said cargo. Refer to the IMSBC code for further explanation.

Flag of convenience

The MV “Bulk Jupiter” was a flag of convenience registered in the Bahamas, thus it was the sub-standard class of vessel. Was it a member of the London P& I club.? Also, the annual dry docking for inspection would able to find out the vessel fatigue. Had the sea-worthiness and crew-worthiness certificate been obtained from the classification society namely Lloyd, Bureau Veritas, American Bureau of Shipping, Russian maritime of shipping and Nippon Kaiji Kyokai?

The Master’s Knowledge

The master of the ill-fated vessel knew that the bauxite can turn into a liquid state, by 10% of moisture content, which risks increase from C to A category. Therefore, there was a chance of cargo shift that leads the vessel capsizing. Was the crew constantly monitor on the bulk cargo in the various hold? The stability of the vessel depends on the crew competency. During the Northwest monsoon, the sea wave is choppy in the South China Sea, with the frequency of Typhoon Signal of 3 or even higher that bring disaster to vessel plying along the coastal area or in the open sea. Had the master been warned about it?

P & I club will never engage a pre-shipment surveyor. Whether it is loading in America, Canada, Thailand, Indonesia, Malaysia and Australia port. According to various sources, the cargo insurer was actively threatened by the bauxite syndicate and practically tossed out of port” Was it true? Any evidence to prove it?

Finally, the chartered party term and insurance policy need to examine closely. The master log book report with a special detail of the sea weather condition like wind speed and, wave level need to study carefully before it can derive a final report.


The Sub-Committee concluded that:

  • There is a need to raise awareness, despite the efforts to date made by the Member clubs of the International Group of P&I Clubs, of the possible dangers of liquefaction associated with carriage of bauxite.
  • The potential for bauxite to liquefy is not specifically addressed in the IMSBC Code since it is only classified as Group C cargo.
  • If a Group A cargo is shipped with moisture content in excess of its transportable moisture limit (TML) there is a risk of cargo shift, which may result in capsizing.
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The Fast claim on equipment breakdown insurance

The Fast claim on equipment breakdown insurance

 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. 

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Claim insurance damage on fallen tree and branches

Claim insurance damage on fallen tree and branches

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?Claim insurance damage on fallen tree and branches 17

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.


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.

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Storm and tempest cover house on Fire insurance

Storm and tempest cover house on Fire insurance

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 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.


“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 wind blown 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 experiences. Both agreed that it is not payable.”


“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.

Policy study

“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 purpose. Meanwhile, I shall liaise with the insurer for the claim form and information about the loss claim. Even though it is almost two months has lapsed, you still entitled for the genuine claim.

Claim approval

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 other gave the negative feedback answer. In this stage, I reserved my comment because the 2 persons mentioned earlier also my friends. One of them happened to me my insurance mentor when I joined this industry.

What are Storm and Tempest?

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 rain water.  A short circuit will prevail soon causing more damages and lead to a huge claim.


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.

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Air Transportation Linear Accelerator Ex USA after 9/11

Air Transportation Linear Accelerator Ex USA after 9/11

How to underwrite the Air transportation Linear Accelerator Ex USA after 9/11? I was in Kuantan port at that particular time for being part of the team of investigating shipment from Indonesia being hijacked. Lloyd Intelligence mid-ocean satellite AIS coverage detected the ship was abandon at the Kuantan port minus cargo.

Back to the hotel for a rest, there was an email pops up in the inbox requesting me to underwrite a shipment of air cargo. Why me again? Totally exhausted for the past 4 days with a few hours of sleep, I slept like a log until the next day.

Linear Accelerator

The USA’s manufacturer supplied me the detail specification of the medical equipment. What is Linear Accelerator? A linear accelerator (LINAC) is the customized medical equipment. It produces high energy x-rays or electrons to conform to a tumor’s shape.  It can destroy cancer cells while sparing surrounding normal tissue.

The danger of X-ray

X-rays and electrons are classified as dangerous material. The terrorists can use it to make dirty bombs.  X-rays can cause mutations in our DNA. It might develop cancer in later in life. For this reason, X-rays are classified as a carcinogen by both the World Health Organization (WHO). The possibly at low doses, radiation might increase the risk of cardiovascular disease and some other non-cancer diseases. The long term effect might inherit down to the third generation.

I emailed the party for the following detail before I can issue their air cargo policy with terrorism clause.


1. A copy of product liability. 2. The size of the unit load container. 3. How to pack the equipment? The prevention measure for the leakage of x-ray. 4. Any depletion of uranium after constant use of the linear accelerator? 5. How to dispose of the balance dosage?

Risk Management Visualization

The ong wait for 2 hours in the hotel indeed killing me. My mind occupied with the full the images and video clip. The collapsed of the Twin Towers of the
World Trade Center like a match box with people jumping off from the window for the precious life. My memory etched with the horror of the dead bodies strewn on the debris. What was the probability of terrorist attack for another passenger plane after 9/11? If the plane was shot down, the catastrophic impact on the people around the zone area? Accept or decline the risk.?What is the precaution step is taken if I accepted the risk.? If I decline the risk can they find another underwriter in a short span of time? The plane would take off in the next 12 hours.

Upon receiving the full detail of my request, I issued the policy. The additional clause with an extra premium for the sum insured of RM (Malaysian Ringgit) 12 000 000.

Policy Issued
  • ICC (Air)
  • Terrorism Extension Clause:  It is agreed and understood that subject to the Insured having paid the agreed additional premium, this Policy shall be extended to cover the Insured’s liability for claims made against the Insured for the bodily injury of and or property damage to any third party at the specified premises directly caused by any terrorist organization. This clause is subject otherwise to the terms, conditions, and exceptions to this Policy.

A.) 2 armed air marshals on the plane to escort the cargo from the USA to Singapore Airport.

B.) Another 4 plain armed escorts to accompany the conveyance from Singapore to a designated hospital in Malaysia during the off-peak period.

C.) A compliment Public liability policy with the Terrorism extension clause.

All the term and conditions were complied with, the consignment arrived sound.  A few years later, the fungal infected the 2 units of medical equipment as the hospital had not found suitable professional personnel to handle the equipment.

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Bank misrepresents consumer putting insurer at risk

Bank misrepresents consumer putting insurer at risk

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.

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Bank misrepresents consumer putting insurer at risk 21