Underwriting Essentials

What is a table of limits, and how are the amounts in the table determined?

The amounts of insurance an underwriter may authorize for risks of varying types are set out in the table of limits. It is determined by occupancy of the risk, level of public fire protection and the type of construction.

Why is the principle of utmost good faith so important in insurance contracts?

Utmost good faith is required to ensure that the insurer can properly assess the risk and negotiate terms that are fair to the insured.

Why is having claims knowledge important to an underwriter?

The record of past losses would describe not only the types of loss but also the amount of loss.

What details concerning product liability should be included in an underwriter's analysis of risk?

Whether the product is consumable or not, the underwriter's analysis of a risk's products liability exposure should include underwriting details appropriate to any exposure such as: · The name and address of the risk; · The number of years it has been in business; and · Its payroll and receipts and other measures of its financial well-being. The underwriter's analysis should also include questions that more especially concern products liability exposure: 1. Who manufactures the products that the applicant sells? (This question would apply if the applicant sells products manufactured by another company) 2. What products does the applicant manufacture? What is the final use of the products? 3. Does the applicant modify or alter products (that is, parts, materials, or finished products) received from other manufacturers before selling them? 4. What is the distribution of the applicant's products (local, national or international)? In particular, is the product distributed in the United States? (difference in laws and exposures)

How does the approach of a reinsurance underwriter differ from that of an underwriter for a primary insurer?

Reinsurance underwriter is looking for the approach of risk of the underwriting team whereas primary is looking to accept risk.

Explain the function of a line guide.

It is a set of criteria determined by an insurer to accept or reject a risk.

Explain the principle of "contra proferentem."

It means "against the offerer", any dispute by ambiguity over the policy's wording will be decided against the insurer.

What does the power of "why" refer to? Why is this an important characteristic of an underwriter?

It refers to the curiosity of an underwriter. It is important as they should seek to understand a risk and it's context as thoroughly as possible.

What are two parts of an underwriter's analysis of any risk?

i. An analysis of the subject: the people, person, or organization applying for insurance. ii. An analysis of the object: the property, liability, crime, boiler and machinery, automobile, or other exposure to loss for which the applicant seeks insurance.

What is an IBNR factor?

"Incurred but not reported" - certain types of risk claims may have been incurred during the policy period that had yet to be reported when the insured's loss was summarized.

What are a few ways an underwriter applies and works with the line guide?

- Underwriters job can be described as applying the line guide ( expresses insurers strategic plan) - U/W assignment can be individual risks or groups of risks - As he gains experience will be given larger more complicated risks - Giving brokers "the pen" vesting u/w authority to brokers with line guide limits, the broker underwrites, insurers u/w becomes portfolio manager

What are 7 basic steps an underwriter may assess the risk?

- Who is the applicant - What kinds of losses might be incurred - What perils does the risk face - Physical hazards making some losses more likely - Moral hazards, more subjective than physical hazards - How much information is needed - What to know vs need to know

What information about the physical risk might an underwriter look for regarding Homeowners Insurance.

-whether the size of the dwelling is inappropriate or perhaps disproportionate to the neighbourhood -whether the construction is in any way odd or unusual -whether the dwelling is served by a high-hazard form of heating by an emerging technology for which loss experience has yet to be developed -the age of the dwelling -whether the dwelling is under construction or undergoing renovations -whether the dwelling has concealed spaces

Why does the potential involvement of the courts make liability insurance in some ways more difficult to underwrite than other types of insurance?

1) An applicant can be sued for any harm for which another person or organization wishes to recover damages from the applicant. 2) Once a lawsuit has gone to trial, it is not possible to be certain whether the applicant will be found legally liable for the third party's loss or injury. Nor is it possible, if the applicant is found liable, to be sure of the damages that the court will require the applicant to pay.

What are the three main reasons why an underwriter might reject a risk.

1. Class not permitted in the line guide. 2. Market Conditions 3. Risk is too flawed to be accepted

Give the 4 basic steps in the historic evolution of underwriting.

1. Code of Hamurabii 1750 - 1800 BC 2. Bottomry - loan extended to owner of goods / ship in transit - journey completed loan is repaid with interest, if not loan kept for indemnity 3. Coffee Houses - Lloyd's of London 4. Underwriters

Name three definition of an underwriter.

1. Insurance professional employed to accept or reject risk on behalf of an insurer. 2. An investor of shareholder capital. 3. Insurance professional employed to implement an insurer's strategic plan.

What steps should an underwriter's analysis of premises liability exposure generally include?

1. Know the exposure, the occupancy, and the applicant's activities. 2. Understand the legal requirements in the jurisdiction where the risk is located. 3. Review the risk's loss history. 4. Review the loss control reports. 5. Follow up on any recommendations outstanding from those loss control reports. 6. Find out whether the applicant keeps records of incidents or accidents, maintenance logs, and records of routine inspections. 7. Find out what contracts (i.e. maintenance agreements or lease agreements) the applicant is party to and ask if the applicant obtains certificates of insurance from its contractors. 8. Understand who any additional named insured's on the application are and what their relationships are to the applicant. 9. Find out if the applicant is named as an additional insured on other policies, such as a contractor's policy.

Name 6 themes of the underwriting process.

1. Licensing - where insurer can accept business, also part of strategic plan. 2. Type of Business - the type of business the insurer want to deal with and seek out to insure. 3. Lines of Insurance - part of the strategic plan, lines of insurance and types of product being offered. 4. Territory - Urban vs Rural, overlaps of capacity, pricing and loss performance for that area. Legal environment for that territory. Underwriter should know the territory. 5. Capacity - Capital available to the underwriter to invest in various business, max amount of insurance underwriter can commit. 6. Table of limits - amounts of insurance an underwriter is authorized at maximum, set out in matrix determined by: a. Occupancy b. Level of public fire protection c. Construction

What are three ways that civil law may impose a liability?

1. Negligence 2. Nuisance 3. Breach of Contract

What are the five elements of a contract?

1. Offer and acceptance 2. Capacity of parties to contract 3. Consideration 4. Genuine intention 5. Legality of Object

What must happen before a third party's injury or loss can become a loss under a liability policy?

1. The third party must consider the injury or loss serious enough to pursue a grievance; 2. The grievance must be difficult enough to resolve that the parties to the lawsuit are unable to settle it out of court; 3. The resulting trial must end in favour of the third party.

What is a back-dated policy? Why should an underwriter be concerned about issuing a back-dated policy?

A back-dated policy is a policy that will become effective retroactively after the applicant applies for it. The insurer may be liable for losses prior to the application date and may find itself paying claims for losses that occurred before it had even agreed to provide coverage. The main concern about a request for back-dated coverage is the moral hazard it may imply concerning the applicant.

Why might an underwriter check with ISD/ICPB when assessing an applicant's exposure to loss?

A check with ISD/ICPB (the Investigative Services Division or Insurance Crime Prevention Bureau) may be standard to see if there are any records of suspicious losses involving the applicant.

Explains what makes an insurance policy a contract.

A contract is a deliberate engagement between two competent parties upon legal consideration to do or abstain from doing some act.

What are common hazards? What are special hazards? Given an example of each.

A hazard is a condition that may cause a peril to occur. Common hazards: hazards that are generally found in most occupancies. Heating, lighting, and housekeeping are examples of hazards common to most occupancies. Special hazards: hazards that uniquely characterize certain occupancies. For example, the deep-fat fryers in restaurants or other occupancies that prepared fried foods.

What types of personal information about an applicant might be useful for an underwriter assessing personal liability exposure?

A liability underwriter will want to ask questions about the owner's lifestyle, occupation and hobbies. Other questions the underwriter might ask include the following: · Has the applicant had any previous liability losses? If so, the underwriter will want details. · Does the applicant have a pet or pets? What Kind?

Explain the roles of a mortgagor and a mortgagee

A mortgage conveys an interest in property as security for a debt. The borrower (the mortgagor) retains possession and use of the property used as security for the loan, but the lender (the mortgagee) acquires an interest in the property and the right to sell it to discharge the borrower's debt. This interest is registered with the appropriate registry or land titles office to establish the mortgagee's claim to the property ahead of any prospective purchaser to whom the mortgagor might sell the property before repaying the mortgagee. The main benefit of a mortgagee clause for the mortgagee is that the policy covers the mortgagee even if the named insured is unable to recover because a condition of the policy has been breached.

What is a true retailer? Why might this be an important characteristic for a business for an underwriter to consider when assessing risk?

A true retailer sells things to consumers, but does not manufacture them on the premises where they are sold. If both aspects are done in the retail store, the risk will be higher since there may be ovens, thus causing heat and therefore a greater risk of fire.

What is the difference between an additional insured and an additional named insured?

An additional insured: is any party not automatically included as an insured but entitled to a certain degree of protection under the policy. An additional named insured: is any party, other than the original named insured, identified as an insured in the policy declarations. An additional named insured has more rights under the policy than does an additional insured but also more responsibilities.

What might an underwriter conclude about an application who provides a land-based telephone number as opposed to a cell-phone number?

An applicant who takes the time and incurs the expense of having a land based telephone installed is more likely to remain in that location for some time. Conversely, an applicant who can easily change locations without worrying about details such as cancelling a land-based telephone service might do just that and change locations.

What is the difference between an insurance policy and a contract of insurance?

An insurance policy is a document which provides evidence of a contract of insurance.

What is reinsurance? Explain the difference between facultative reinsurance and treaty reinsurance.

An insurer transfers part of it's risk to another insurer. Facultative is negotiated on an individual risk or policy. Treaty is reinsurance of a portfolio of business.

What should an underwriter look for in assessing a manuscripts wordings?

Assess the coverage it offers to determine if they want to accept coverage. The underwriter should also look for errors and oversights.

What does it mean if a building has been "grandfathered"?

Being grandfathered is being granted an exemption as an already existing structure from the more stringent requirements that would apply to new structures as they are built. The underwriter might well ask what it was about the area that led to the change in zoning requirements, and how this would affect the risk.

What does the acronym COPE stand for? What would an underwriter use it for?

C - Construction O - Occupancy P - Protection E - Exposure

Briefly explain what each of the elements in COPE includes?

Construction: includes a description of the types of material used in walls and roof of the applicant's building. It may include the size of the building, age, number of storeys and type of heating system and fuel. Occupancy: refers to the use of the property by it's occupants. It includes the number of occupants, if there is more than one, along with a description of the operations of each, the space each occupies the hazards associated with each occupancy and any measures taken to reduce those hazards. Protection: includes both public and private protection. Public fire protection as discussed in terms of the town grade assigned by each municipality by CGI Insurance Business Services. Private protection includes sprinklers or other extinguishing systems, fire brigades and alarm systems. Exposure: Refer to the chances that the applicant will suffer a loss as a result of proximity to one more risks or potential causes of loss to the applicant. Risks may consist of separate buildings near the one the applicant occupies or the natural hazards.

What is the difference between a contractual entrant and an invitee?

Contractual entrant: is a person who enters onto premises under a contract with the occupier; for example, a hotel guest or a theatre-goer. The occupier's duty to a contractual entrance is as specified in the contract. If the contract does not specify the occupier's obligations regarding the entrant's safety, then the contract is said to have an implied (unwritten) term to the effect that the premises are as safe for the purpose as reasonable care and skill of the part of anyone can make them. Invitee: is a person who enters onto the premises with permission when the occupier has some financial or other material interest in the matter. Invitees are owed the greatest duty of care by an occupier. For example, a customer or a client.

What is contributory negligence?

Contributory negligence is a partial defence against an allegation of negligence. It will allow the amount of damages awarded against the defendant in a civil suit to be reduced by the percentage of blame assigned to the plaintiff. A good example to start with is a car driver or passenger who does not wear a seat belt. Not wearing the seat belt does not cause the accident, but it contributes to the damage (the injury in this example).

Why is licensing an important consideration for an underwriter?

Different locations require different licenses to sell insurance.

What role does Lloyd's of London play in the development of the insurance industry?

Created centres of social, intellectual and commercial activity where insurance was sold.

How are credit checks useful to an underwriter?

Credit checks are commonly done for commercial risks. They are used to assess the applicant's overall financial strength and stability.

What are the two types of civil law in Canada?

Criminal law: Law that governs an act against society that is prohibited by the Criminal Code of Canada and certain other federal statutes. The criminal courts determine guilt and punishment. Civil law: Legal liability is the subject of the system of civil law and civil courts determine fault and compensation.

Why is having knowledge of regional issues important to an underwriter?

Different areas of the country present their own unique underwriting challenges to insurers.

What are the BIG 5 categories of knowledge for an underwriter?

Environment - Political, Social, Economical Legal System - 3 systems of law, common law, stature law, civil code. Jurisdictions, federal, provincial, municipal. The Business - 2 prong answer. Need to understand the business of insurance. Also need to understand how the business of their insureds works. The Product - understanding that different kinds of risk require different kinds of policies. The Risk - understanding the applicant

What is insurable interest? Why is required in an insurance agreement?

Exists when they insurance buyer stands in such a legal relationship to the object of insurance as to be financially benefited by it's continued existence or financially prejudiced by its loss or damage.

What are expert systems? When are they useful to an underwriter? When are they not?

Expert systems are computer software programs that guide underwriters through a risk analysis, prompting them with questions and directing them according to the answers generated by the facts of the risk. These systems generate a kind of "score card" on the risk and are used most extensively for personal lines risks such as homeowners and also for many small and even mid-sized commercial risks.

What are the three levels of government in Canada? What responsibilities are assigned to each level?

Federal: Military affairs, foreign relations, the national currency, the postal service, etc. Provincial: Property rights, education, health care, the regulation of insurance companies, etc. Municipal: Police, fire, water and other services that municipalities are authorized by provincial governments to provide or perform within their boundaries.

In what ways might an underwriter be responsible for applying the line guide?

File Underwriter - individual risk Portfolio Underwriter - group of risks

What is the difference to first party loss and third party loss?

First Party - Loss of damage to an insured's property. E.G. Car or House Third Party Liability - Loss from legal liability for loss or damage or harms caused to another business.

What TWO (2) basic elements does an underwriter use to analyze loss experience? Briefly explain each one.

Frequency of loss - ratio of the number of losses to the number of exposure units Severity of loss - the average of losses.

What are "grow ops" and what hazards to they present?

Grow Ops are establishments rented solely for marijuana growing operations. Operators cultivate marijuana plants by turning the rented dwellings into greenhouses. The increased electricity consumption and often dangerous rewiring create a serious fire hazard. Over time, the high humidity required for the plants causes rotting and mould throughout the house.

What is the difference between hard skills and soft skills? Give an example of each type of skill as it would apply to an underwriter.

Hard skills are tangible whereas soft skills are intangible and hard to measure. Hard Skill - Technical Computer Skills Soft Skill - Communication Skills

What are hold-harmless clauses and indemnity agreements?

Hold harmless clauses and indemnity agreements are used together to transfer liability from where it would normally lie to someone else and to direct who will pay for defence costs in a legal action or for expenses to satisfy a judgment.

Why is it important for an underwriter to look at the employment status of a personal-lines applicant?

If the applicant is unemployed, the moral hazard is clear as he/she may be unable to pay the premium or might deliberately cause a loss for the cash they might receive to settle the claim.

Why should underwriters investigate discrepancies between an applicant's occupation and his or her total insurable value?

If the applicant's stated occupation is vague, the underwriter must probe further as there may be a possible moral hazard in order to assess the insured's total insurable value.

Why is it important to investigate commercial insurance policies when they are written in the names of corporations rather than people?

In commercial lines, it can be even more important to investigate the name or names on an application. The first party of several named on a commercial lines policy will be will be the party held responsible for the payment of the premium, among other responsibilities of the insured; in contrast, the order of names on a personal lines policy has no bearing on which the parties bears the insured's responsibilities under the policy. The need to investigate a named corporation may be even greater when that corporation is large enough to own subsidiary corporations. These subsidiaries may be run by different people than the named corporation. The subsidiaries may be engaged in activities or have other exposures that make the risk posed by the named corporation less attractive to the underwriter.

Why are inspections rarely ordered for personal risks?

Inspections are rarely ordered as they tend to be more uniform and predictable than commercial risks. Inspections are more often ordered for commercial risks which tend to present greater variations in exposure than do personal risks.

Why is it important for an underwriter to be comfortable and familiar with terms, and legal definitions as per the policy wording?

Must be familiar with words that appear in policy language, many of them reflecting legal or other technical concepts.

What are the implications for a liability policy when third parties are added as additional named insured's?

Once third parties are added as additional named insured's to a liability policy, they effectively cease to be third parties and instead become first parties to the contract. The underwriter must be sensitive to the possibility that the activities of the former third parties could lead to lawsuits against them that could in turn impose defense costs on the insurer along with the costs of any judgments rendered against the parties. The policy wording usually ensures that coverage for third parties extends only to liability they might incur from their relationship to the original insured. Still, many insurers will not add third parties to liability policies as additional named insured's but may add them as additional insured's.

How is reinsurance beneficial to insurance companies?

One benefit is that it makes capital more available.

What is the difference between a physical and moral hazard?

Physical - A hazard that makes a loss more likely to happen. E.G. water on the floor, poor safety equipment. Moral - The attitudes and character traits that lead to a loss

What factors determine whether an occupier's duty of care to trespassers has been breached?

Premises liability arises out of the risk's use of physical premises, usually a building, the land on which it stands or both, as an owner, landlord or tenant. To assess a risk's premises liability exposure, the underwriter's analysis should include an examination of the occupancy and the duty of care owed to others by the applicant as occupier of the premises. The "others" to whom an occupier owes a duty of care include strangers who do not step onto the land or enter the building, along with owners and occupiers of adjoining properties.

What is the definition of "nuisance"? What is the different between private and public nuisance?

Private nuisance: is interference with a person's use and enjoyment of living area. Public nuisance: is interference that involves the rights of many people.

How does vacancy or unoccupancy affect the character of a risk?

Prolonged vacancy, unoccupancy, or nonoperations affect the character of the risk. The property may be unsupervised. It may be vandalized or used by trespassers who may accidentally or deliberately start a fire. If this were to occur, notification of the fire department would be delayed.

What details about the broker, agent and risk can an underwriter discover from the agent or broker.

SOURCE OF BUSINESS -Source of the business and the proximity of the broker to the risk in question -How did the broker make contact with the risk? -What is the broker's relationship to the risk? -Does the broker's relation to the risk create any conflict of interest? NUMBER OF PREVIOUS BROKERS -The number of brokers who have handled the risk before the current broker submitted the application to the insurer for the applicant. EXTENT (of the information compiled) -The extent of the applications -Is the broker submitting the entire risk for the underwriter's consideration or just the less attractive, more difficult-to-insure aspects of the risk?

Why should an underwriter understand general principles and characteristics of insurance policies?

Should understand the general way in which policy wordings evolve.

How does territory affect an underwriter's assessment of risk?

Some territories may be more prone than others to certain kinds of environmental hazards.

What are the two categories of risk? Give an example of

Speculative risk - exists where there is a chance of gain or loss. Pure risk - exists where there is only a chance of loss

Where does the term "underwriter" come from? How has the meaning of the term changes over the years?

Started as a person literally writing their name under a contract. Signatures of underwriters were replaced with those of company officers.

What does a condition clause typically state?

States if the insured does or does not do a certain thing, the insurer will not pay a claim or the policy will be declared void.

What is the difference between the subject of insurance and the object of insurance?

Subject of insurance is the person or business. The object is the thing being insured.

What is Tenant's Legal Liability Insurance?

Tenant's Legal Liability insurance protects a tenant against his/her liability for damages caused by an insured peril to the premises he/she occupies. Although it protects the tenant, Tenants Legal Liability insurance can also be important to the underwriter for the insurer of the dwelling owner.

Why is products liability exposure heightened when a company's products are consumable?

The consequences for a consumer of an inferior or perhaps unsafe product are more serious when the product is ingested. The exposure is also heightened because quality control is so must more difficult with a consumable product. Therefore, the underwriter must seek complete information on the production process and especially the quality-control process.

What is the flash point of a liquid? Why should an underwriter know the flash points of liquids used by the business when assessing risk?

The flash point (the open-cup flash point) of a liquid is the minimum temperature at which the liquid gives off sufficient vapours to form an ignitable mixture with the air near the surface of the liquid or within the test vessel used. The flash point of a liquid is one of the most important properties of flammable and combustible liquids. The lower the flash point the easier the ignition and the greater the fire hazard.

Why should an underwriter look at how many families or tenants occupy a dwelling when assessing a risk?

The greater the number of people, the greater the amount of activity that could lead to a fire or other insured loss.

Why is it important for an underwriter to look for ways to say yes to a risk?

The insurer's business relies on the premium earned on risk.

Why should an underwriter consider the hours of operation of a business when assessing risk?

The more extended the hours during which a business is open to the public or otherwise in operation, the greater the risk that something may happen to cause a loss.

What is the distinction between the named insured(s) and the person(s) insured?

The name on an application form might seem to be merely a formality, so that the underwriter will know in what name to have a policy produced should the applicant become an insured. A named insured is the registered owner and person whom has a financial relationship with the object being insured with. A person insured is anyone whom the named insured gives to consent to operate or use of the objecting being insured.

Why should an underwriter look at the age of a dwelling when assessing risk?

The older the dwelling is, the drier and more flammable any wood used in its construction is likely to be. And the older a dwelling is, the greater the possibility of faulty or older, high-risk wiring or other construction flaws that are corrected in newer homes or less prevalent in them.

Why are the COPE hazards often heightened for commercial businesses?

The problems facing the commercial business are often heightened because: -Commercial businesses are often larger than dwellings; -They often have more than one occupant; -The occupants' activities are usually varied and more dangerous than those of a dwelling's occupants; and -The exposure of commercial businesses face from surrounding buildings tends to be less predictable and more severe than is true for dwellings.

Why might an underwriter have less control over loss severity than over loss frequency?

The underwriter cannot control factors such as inflation, cost of repairs, court awards against legal liability.

Why is product knowledge important for an underwriter?

The underwriter identifies and composes the insurance policy appropriate to the need for insurance represented by the risk.

Explain the principle of indemnity.

To return someone after a loss to the same financial position he or she enjoyed immediately before the loss.

Why is it important for an underwriter to have knowledge of the typical natural hazards of a regional or province?

There can be natural hazard that each region or province faces - some unexpected or uncharacteristic for the area, but by knowing the typical natural hazards of a region or province, the underwriter is better equipped to make his/her decision whether to accept or reject the risk.

What does the term "third party" refer to?

Third party is a person or organization not party to the insurance contract but whose legal complaint against the insured brings the contract into play.

What are reinsurance skills? Why are they important to an underwriter?

This entails the ability to determine from the line guide what capacity the insurer will make available to insure a given risk, judge capacity, and structure limit of liability. It allows the underwriter to become skilled in determining which risk to commit to and what extent.

What can an underwriter find out by looking at the telephone numbers listed on an insurance application?

This is especially important in personal-lines risks - the exposure represented by a homeowner is heightened if, for example, he or she is running a home business from the basement. The telephone numbers could be an indicator of such an exposure.

What is the purpose of the ABC rule? List the rule's three parts.

To establish a cause of legal action for negligence, three things must be established to the satisfaction of a court: 1. A duty of care exists. 2. The duty was breached. 3. There is a causal relationship shown between the breach and the damage.

What is the difference between a trespasser and licensee?

Trespasser: is a person who wrongfully enters someone else's land with neither the right nor permission to be there. Trespassers are owed the lowest duty of care but the occupier must treat the trespasser with common humanity. Licensee: is a person who enters upon land with the consent of the occupier. An occupier owes a greater duty of care to a licensee than to a trespasser. An occupier has a duty to protect a licensee from known concealed traps or dangers.

Discuss the organizational skills required by an underwriter.

Underwriting is demanding and organizational skills are needed to succeed.

Why must values be assessed within their contexts?

Values by themselves are less useful than values in context, that is, values compared with such aspects of the risk as its physical characteristics, the applicant's loss history, and the applicant's record of employment.

How are values in personal lines often determined?

Values in personal lines are often determined by valuation guides produced by such companies as Marshall & Swift/Boeckh (MS/B). The amounts of insurance for other coverage's such as personal property and additional living expense are often specified percentages of the amount of insurance on the dwelling.

What are some personality traits of a good underwriter.

a. Co-operation with other professionals b. People skills required c. Reconcile conflicting environmental consideration d. u/w suited by temperament e. power of why - not a mechanical approach

Give some examples of internal and external resources that might be useful to an underwriter.

internal - colleagues in other departments, actuaries external - reinsurers, underwriters in other companies

How is liability insurance different from other types of insurance?

· Applications for liability insurance require an underwriter to assess both the subject and the object of insurance. · It is not first-party insurance; rather, it is third-party insurance.

What types of fire protection might an underwriter look for in a dwelling when assessing risk?

· Is the dwelling in an unprotected, semi-protected, or fully protected area? · Does the dwelling have sprinklers? · Does the dwelling have fire alarms?

What are some questions that will help an underwriter assess the premises liability exposure for a given risk?

· What is the general condition of the building and grounds? · How well maintained are the parking lots, stairs, walkways, and floors? · What is the condition of interior and exterior lighting? Is it adequate? · What is the condition of exit lights, emergency exists, and doors? · Are non-slip surfaces used in areas of high pedestrian volume? · What are the cleanup procedures? Are cleanup records or logs appropriate, and if so, are they available? · How well is the property drained? Is the drainage adequate to avoid water ponding and icing? · Are warning signs posted in hazardous areas?

What specific aspects of a business should an underwriter be familiar with if they are planning on insuring it?

• The products they manufacture • The goods they sell • The services they provide • The legal, regulatory, technological, and economic environments they operate in

What do the declaration of an insurance policy identify?

• the parties to the contract (the insurer and insured); • the effective and expiry dates (usually but not always marking a term of one year, as the parties choose); • the amount of premium; • the amount insured; • other interested parties (such as a mortgagee); • and sometimes a description of the objects of insurance, though that may be found instead in the insuring agreements.