building combine and office contents module 3 · 2019. 12. 6. · copyright © santam ltd. 2007 11...

1

Building Combine and Office Contents

Module 3

Copyright © Santam Ltd. 2007 Course code: ASSESS123 / Module 3

Copyright © Santam Ltd. 2007 2 Course code: ASSESS123 /Module3

Building Combine and Office Contents Module introduction The policy of one of your current clients, Studioplus, has to be renewed. It will be expected of you to renew the policy with reference to the insured’s claims ratio of the past year. The insured didn’t have a pleasant experience with SA Insurance company and therefore you will be confronted with various questions before he will concede to proceed with the renewal. After renewal, you are told that the insured is going to buy a part of an editing studio from a friend. The equipment will be accommodated in the offices of the insured, where the editing will also be done. Thus, it is expected of you to advise the insured on this and to underwrite the risk accordingly. The following sections are relevant to this case study: Section: General Section: Fire/Buildings Combined Section: Office Contents Section: Money Section: Public Liability Section: Electronic Equipment

If you use the following guidelines in relation to this risk, you will be able to complete this module effortlessly: Case study 1

1. Firstly, read the module thoroughly. 2. Then, complete the questions of Task 1. 3. Study the content of Task 2. 4. Complete the inspection reports. 5. Complete the quotation and recommendation/requirement form, which

will also serve as renewal document.

Case study 2

• Complete the questions of Task 1. • Complete the quotation and recommendations of Task 2. • Complete the questions of Task 3.


Module objective The goal of this module is to evaluate your knowledge of the following aspects of an office (buildings and content) as risk: • General questions asked with renewal;

• Risk evaluation with regard to changes and the claims ratio;

• Policy renewal and the application of new underwriting measures; and

• Posing questions on changes that could occur.

(There will be focused on the various types of cover and the underwriting as a result of it and not on premium/tariffing.) Case study Task 1 The policy of Studioplus has to be renewed and you were requested to handle it. It is clearly put to you that the claims ratio of the past year was not as one would wish. You are also aware that the insured is quite difficult and that he has come into conflict with your colleagues on various aspects. The claims ratio of the past year is as follows: Portfolio: Property (Buildings Combined, Money and Office Contents) 157,57% Theft of office equipment R 5 000 Burglary R 5 000 Money stolen in transit R 850 Portfolio: Engineers (Electronic Equipment) 381,47% Damage by lightning R 5 500 Burglary R12 000 The insured’s policy for the current year is put together as follows:


SCHEDULE

Insurer: SA Insurance Company Product: MMIII Insured: Studioplus Business: Offices Agency: L & L Brokers Agency number: 00003 Manner of payment: Monthly debit order in advance Institution: National Bank Date of payment: 1st day of the month Insured period: 1January 2004 to 31 January 2004

Any consecutive period of one calendar month to which the company agrees to renew the policy or any section of it.

Office: Cape Town Signed at Cape Town on 15 December 2003. On behalf of the insurer


SCHEDULE SUMMARY

Effective sections Additional/Refund premium

Renewal premium Monthly Annually

Office R251,04 R3 012,50

Money R 58,33 R 700,00

Electronic Equipment R700,00 R382,29 R 4 587,50

Public Liability R 70,83 R 850,00

Policy fee R 10,00 R 120,00

Total premium (14% VAT included) R772,49 R 9 270,00

After inception of cover, this schedule will become a tax invoice for the payment due (VAT number: 1234). Prescription date: 1 January 2005

SA Versekeringsmaatskappy

Insurance Company


SCHEDULE

Policy number: 123/123456 Insured: Studioplus Effective date: 01/01/2004 ___________________________________________________________________ Endorsements applicable to monthly policy (Endorsements attached to policy and which form part of it) Section Reference General 001 Adjustment of premium clause Office 116 Capital additions clause Money N.A. Electronic Equipment N.A. Public Liability (Claims made basis) Legal defence costs Wrongful arrest and defamation ___________________________________________________________________ General provision If, in the schedule of this policy, the sum insured, limit of indemnity or compensation is: • left blank or has no monetary amount stipulated against it; • reflected as nil or not applicable or not covered or no indemnity extended; it means the defined event or circumstance shown in the schedule is not covered by the policy.


Insurance Company


SCHEDULE

SECTION OFFICE CONTENTS Policy number: 123/123456 Insured: Studioplus Transaction number: Effective date: 01/01/2004 ___________________________________________________________________ Stand no. Details of premises/Item description Sum insured/ Indemnity limit

1 1 Tyger Street, Bellville, 7530

Content R250 000 Construction: Standard _____________________________________________________________________________________________ Optional extensions applicable Theft by forcible entry into or exit R 50 000 First amount payable – 10% of claim min R500 Theft R 10 000 First amount payable – 10% of claim min R500 __________________________________________________________________________________ Memorandums N.A. __________________________________________________________________________________ Optional extensions not applicable Extension: Riot and strike __________________________________________________________________________________ Premium calculation Content R250 000 x 0,225% = R 562,50 Theft by forcible entry into or exit R50 000 x 3,5% = R1 750,00 Theft R10 000 x 7% = R 700,00

= R3 012,50


Insurance Company


SCHEDULE SECTION ELECTRONIC EQUIPMENT

Policy number: 123/123456 Insured: Studioplus Transaction number: Effective date: 01/01/04 ___________________________________________________________________

Item description Sum insured/ Indemnity limit

1 x HP Colour Laserjet 4500 printer R15 000 (serial number 1234) First amount payable 10% of claim min R500 5 x HP Laserjet 6P printers @ R6 000 each R30 000 (serial number 1101) (serial number 1102) (serial number 1103) (serial number 1104) (serial number 1105)

First amount payable 10% of claim min R500 per item 1 x Minolta fax machine (model MF 2800) R 8 500 (serial number 98761) First amount payable 10% of claim min R500 1 x Minolta photocopier (model Dl 3010) R25 000 (serial number 98888) First amount payable 10% of claim min R1 000 6 x Acer Veriton 3200 computers & 35C Monitors @ R5 000 each R30 000 (serial number 110123) (serial number 110234) (serial number 110311) (serial number 110499) (serial number 110566) (serial number 110577)


Insurance Company


First amount payable 10% of claim min R500 per item

6 x Acer Veriton 5500 computers & 77C Monitors @ R7 000 each R42 000 (serial number 220123) (serial number 330234) (serial number 220311) (serial number 123499) (serial number 222566) (serial number 999577) First amount payable 10% of claim min R500 per item

1 x HP scanner (model 2670) R 3 000 (serial number 99999)

First amount payable 10% of claim min R250 Acer Network server 3120 hard drives R30 000 (serial number 123499) (serial number 222566) First amount payable 10% of claim min R100 _________________________________________________________________________________ Optional extensions applicable N.A. ___________________________________________________________________ Memo 1 Excess applicable to theft claims: 10 % of claim minimum R1 500 ___________________________________________________________________ Optional extensions not applicable Telkom access lines Incompatibility cover __________________________________________________________________________________


SCHEDULE SECTION PUBLIC LIABILITY

Policy number: 123/123456 Insured: Studioplus Transaction number: Effective date: 01/01/2004 ___________________________________________________________________ Item no. Description Indemnity limit 1 Liability

Claims made basis R2 500 000 Retrospective date: 01/01/2004 _____________________________________________________________________________________________ Optional extensions applicable Extension: Legal defence costs R 10 000 Extension: Wrongful arrest and defamation

• per event R 50 000 • per annual insurance period R 100 000

__________________________________________________________________________________ Optional extensions not applicable Extension: Products liability Extension: Defective workmanship liability Extension: E.C. Liability __________________________________________________________________________________


Insurance Company


SCHEDULE SECTION MONEY

Policy number: 123/123456 Insured: Studioplus Transaction number: Effective date: 01/01/2004 ___________________________________________________________________ Stand no. Details of premises Indemnity limit 1 1 Tyger Street, Bellville, 7530 Specific limits/details Indemnity limit

1. Money which is not kept in a locked safe or strongroom

(i) While it is on the insured premises, after the insured’s R1 500 trading hours;

(ii) While it is in the dwelling of the insured, a partner, R1 500 director or employee of the insured;

(iii) While it is on the insured premises, in the safekeeping of one or more of the petrol attendants; and R N.A.

(iv) While

(a) It is in the safekeeping of one or more collectors or delivery people; R N.A.

(b) It is in the safekeeping of a partner, director or employee of the insured who is on a business trip any R1 500 place in the world and away from the insured premises.

2. Money kept in a locked safe or strongroom in a building on the insured’s premises after the

insured’s trading hours.

i. With regard to the safe or strongroom as described below: Chubb walk-in safe (no SABS GRADING) R10 000

ii. With regard to any safe or strongroom which is not specified in 2(i) above, the limit in relation to the grading of such a safe or strongroom will be determined as follows:

No SABS grading R 2 500 SABS category 1 grading R 5 000 SABS category 2 grading R 12 500 SABS category 2 grading HD grading D3 R 25 000 SABS category 2 grading ADM grading R 50 000 SABS category 2 grading ADM grading D3 R 75 000 SABS category 3 grading R100 000 SABS category 4 grading R200 000 SABS category 5 grading R300 000


Insurance Company


It is provided that the liability of the company for premises affected is always at most limited to the amounts below (3). 3. With regard to any other loss of or damage to money during the period described

below, the indemnity limit for money related to the specified insured premises will read as follows:

Main limit - during December or any mentioned period R10 000 - any other period R10 000

With regard to the loss of crossed cheques, crossed bills or crossed postal orders. (The indemnity limit below is payable above the indemnity limit shown in 1, 2 and 3.) R 100 000 Details Indemnity limit/Compensation Clothing R2 000 Containers R2 000 Keys and locks R2 000 Optional extensions applicable N.A. __________________________________________________________________________________ Memorandums __________________________________________________________________________________ Optional extensions not applicable Extension: Riot and strike Extension: Personal accident (assault) __________________________________________________________________________________ Premium calculation Limit R10 000 x 7% = R700


Motivate your answers with the relevant facts throughout to qualify for the maximum allocation of marks as indicated per question. Task 1 During your meeting, the insured posed the following questions/statements to you. Please answer it comprehensively. 1. What do you mean by saying that the policy has to be renewed? ______________________________________________________________________________

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2. I am of the opinion the sums insured on my policy are sufficient. Why do we have to go over it again?

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3. About two months ago, I have lost some of the contracts (documents) I handle on behalf of my clients. As a result, they have held me responsible for their loss of income. Will the policy provide cover for events like these?

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4. One of my friends said I should approached you to extend Section Public Liability of our policy to include food poisoning. This is because we have functions on the premises from time to time. Do you agree?

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5. When lightning caused damage to one of my computers, you required an additional excess of R1 000. It is insured under Section Electronic Equipment, but I can’t find where this excess is mentioned on my policy schedule. Please explain this to me?

______________________________________________________________________________

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TOTAL

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1

10


Task 2 Before you could present new underwriting measures and the premium for renewal, you will have to do a review of the premises. A site layout of the risk, as well as some visual material to help you with the quotation, is attached. Complete only the sections clearly visible on the site layout and visual material. The sections on which no information was made available in the visual material, site layout or other information pieces have already been filled-in or marked as “N.A.”. Take note: Where “N.A.” is marked on the inspection report, it does not necessarily imply

that it is “not applicable” to all similar risks. It is only “not applicable” to this specific risk/case study.


LAYOUT OF BUILDING AND PARKING AREA

C O N S T R U C T I O N: WALLS: BRICK ROOF: CORRUGATED IRON

UPPER GROUND LEVEL OF BUILDING – OCCUPIED BY VARIOUS OTHER TENANTS STAIRCASE

STUDIOPLUS – OCCUPIES UPPER GROUND LEVEL STUDIOPLUS – OCCUPIES LOWER GROUND LEVEL NETTED SHADING

STREET

TARRED PARKING AREA


MAIN ENTRANCE

OFFICES LOWER GROUND LEVEL

RECEPTION

LOWER GROUND LEVEL

MAIN COMPUTER SERVER WALK-IN SAFE FIRE HOSE FIRE EXTINGUISHER

LAYOUT OF BUILDING

OFFICE AND CONFERENCE CENTRE

KANTORE ONDERSTE GRONDVLAK

VERSKEIE HUURDERS

GRONDHELLING

OFFICES AND CORRIDOR UPPER GROUND LEVEL

VARIOUS TENANTS VARIOUS TENANTS

STUDIOPLUS OFFICES & CORRIDOR UPPER GROUND LEVEL

SLOPE

STUDIOPLUS OFFICES & CONFERENCE CENTRE LOWER GROUND LEVEL

DOOR TO CONFERENCE CENTRE


OFFICE PREMISES Name: Occupation:

Address: Postal code:

Offices: Multi-storey block: Which floor:

Converted house: Retail premises:

Other (describe):

1. Is the building reception area inside the building? YES NO

2. Are the fire escapes locked at night ? If not what prevents intending thieves using these to gain

access to any floor in the building? YES NO

3. Is there access from adjacent buildings? YES NO

If ‘Yes’ describe

Location: City Centre Residential area Township

Isolated area r Industrial area Other (detail)

Please tick correct answer/provide answer

Security: Are all windows protected by burglar bars 12mm thick or more? YES NO

Are all perimeter doors protected by grille gates 12mm thick or more? YES NO

Does building have 24 hour security? Name of security company YES NO

Access control? YES NO

Are office perimeter lights burning at night? YES NO

Has a burgular alarm system been installed? YES NO

If ‘Yes’, name of installer: ADT YES NO

Type of system: Radio r Siren Communicator Yes

Protection: Full perimeter Full space Yes

Partial perimeter Spot space

24 hour warden back-up YES NO

Contruction and thickness of exterior walls

Property at Risk:

DESCRIPTION DETAILS VALUE

Computers 1.Main frame

2.PC’s

3.Laptop

Printers

Typewriters

Fax machine

Photo copiers

Dictaphones

Calculators

TV-, video, Hi-Fi equipment

Furniture

Other e.g. loose mats

Total Value

Task 2


Is any of the property/equipment removed from the premises? YES NO

If ‘Yes’, is it regularly? - If so please detail

Transit:

(Please note regular transits will require special terms. In particular theft from unattended vehicles will usally be excluded) Have the premises been entered in the last three years? YES NO

If ‘Yes’, give details

What protections were installed to prevent a repetition? Alarm linked to a reaction unit.

Past Losses:

Do you take any special precautions with computer equipment when not in use e.g. locking of

Strongroom? YES NO

If ‘Yes’, give details

Precautions:

(Additional information)

Is the equipment (a) Owned (b) Hired (c) Leased

If leased, please provide a copy of the lease agreement

Maintenance agreement in force? YES NO

Is lightning and power surge protection fitted? YES NO

Where do you keep your computer discs? In safe

Do you have back-up computer discs? YES NO

If ‘Yes’ – where are they kept?

Computers:


Comment and general recommendations following on the inspection reports ______________________________________________________________________________

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Quotation

Section Sum insured Tariff Premium Excess

Office Contents • Theft (by forcible

entry) • Theft

0,500%

6%

10%

Electronic Equipment 5%

Public Liability _ R850

Money 8%

Recommendations/requirements It is not necessary to use existing clause numbers. Create your own clause number for the purpose of this exercise and list it at the bottom of the application form. Example “Clause 1” – Burglar alarm condition with armed response unit “Clause 2” – Security gates at all outer doors ______________________________________________________________________________

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Case study 2 The editing equipment the insured acquired from a friend consists of the following:

Description Serial number Date of purchase Sum insured (replacement

value) Sony Betacam SP

recorder/data processor 123/087 15/02/2000 R 85 000

Sony Betacam SP recorder/data processor

123/187 15/02/2000 R 85 000

Sony Betacam SP recorder/data processor

777888 01/07/2002 R100 000

Sony Betacam SP controller/data processor

555666/88 01/09/2002 R100 000

Sony Betacam SP controller/data processor

555666/89 01/09/2002 R100 000

Pioneer Betacam SP controller/data processor

012345/89 10/12/1995 R100 000

Sony 37cm screens 12345/6 12345/7 12345/8 12345/9 12345/0

10/12/1998 10/12/1998 10/12/1998 10/12/1998 10/12/1998

R 2 000 R 2 000 R 2 000 R 2 000 R 2 000

Sony 66cm screen 000999/11 15/10/2003 R 20 000 Motivate your answers with the relevant facts throughout to qualify for the maximum allocation of marks as indicated per question. Task 1 He would like to know the following with regard to the equipment: 1. Will it be covered in terms of my office policy?

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2. Will I always be indemnified on a replacement basis (new for old) if I insure the equipment in terms of Section Electronic Equipment? (explain comprehensively)

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3. I am not completely up to date with the value of the imported equipment. If it is insured

in terms of Section Electronic Equipment and a claim arises, will I be wronged?

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4. Should only a part of the equipment become defective during the editing process, may I proceed to replace/repair it? Will I be indemnified in terms of Section Electronic Equipment? This is only because it will be impossible for us to wait until you assess the damage.

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5. Occasionally, I have to send the editing equipment for a service. Will it be covered in terms of Section Electronic Equipment when it is at the service provider and on its way there and back?

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6. Since I am now also able to do editing work, I am worried about notable financial losses when my equipment is damaged by lightning and my contracts could not be fulfilled. Will we be covered in terms of Section Electronic Equipment if we use other equipment temporarily?

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TOTAL

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2

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Task 2 Please quote on the equipment by using the following quotation program: NB: The sum insured must represent the market value of the equipment. Quotation

Section Sum insured Tariff Premium Excess

Electronic Equipment

3%

Recommendations/requirements It is not necessary to use existing clause numbers. Create your own clause numbers for the purpose of this exercise and list it at the bottom of the application form. Example “Clause 1” – Burglar alarm condition with armed response unit “Clause 2” – Security gates at all outer doors ______________________________________________________________________________

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Motivate your answers with the relevant facts throughout to qualify for the maximum allocation of marks as indicated per question. Task 3 More questions The building in which the client’s offices are located, will soon be paid off. He wants to know the following: The building is occupied by the following tenants:

Radio Pulpit (Studio and offices) Studioplus (Editing studio and administrative offices) King Fisher (Mobilisation centre – only administrative functions) PST Training (Presentation and soft skills training facilities) HS Training (Computer-based training centre) C-Web (Webpage designers)

1. Which section of the policy will provide the most beneficial cover for the building?

Motivate your answer.

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2. What do people have to keep in mind when determining the value of a building for

insurance purposes? (Refer to site layout and visual material) ______________________________________________________________________________

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3. We are planning to extend our business to Durban during the new financial year. Initially, we will only establish an administrative office and need cover for office contents. When do we have to notify you and how will it affect our insurance?

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4. Let’s assume my building is insured with you. Will it have a substantial impact on my insurance if I convert a part of the building into a restaurant/take away business?

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5. Which underwriting principles should apply when insuring a building with SA Insurance company?

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TOTAL

3

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building combine and office contents module 3 · 2019. 12. 6. · copyright © santam ltd. 2007 11...

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