Introduction to Insurance

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Presenter
Syed Zafar Abbas
Assistant Manager Adamjee Insurance Company
Limited

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Table of ContentsTable of Contents
What is Insurance.
Difference between insurance contract and policy.
What is Risk?
Why Insurance needful.
Principles of Insurance.
Various classes of Insurance.
(a) Engineering Insurance.
(b) Fire Insurance.
(c) Marine Insurance.
(d)Terrorism Insurance.
(e) Motor Insurance.
(f) Miscellaneous Insurance.
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What is insurance?What is insurance?
Insurance is risk transfer mechanism in which one party(insured) transfers the
risk to another party(Insurance Company).
Premium:Premium:
Amount of money that insured pays to insurance company for an insurance
policy.
Premium can be paid by using four modes of payment:
(A) Monthly (B) Quarterly (C) Semi-annually (D) Annually.
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Risk Transferred
PremiumInsured Insurer

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Insurance ContractInsurance Contract::
A “contract” of insurance is an agreement enforceable by law between
insurer and insured on agreed terms and conditions.
Insurance Policy:Insurance Policy:
The insurance policy is not the contract but the “evidence” of the contract in
which the detail of risk is described.
Difference between insuranceDifference between insurance
contract and policy?contract and policy?

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Risk = The possibility of financial lossRisk = The possibility of financial loss
Types of Risk that can be insured are given below:
 Financial
 Pure
 Particular
 Fortuitous Event
 Insurable Interest
 Not against public policy
 Homogenous exposure
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WHAT IS RISK?WHAT IS RISK?

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Why Insurance needful?Why Insurance needful?
Why Insurance needful?Why Insurance needful?
Everyone that wants to protect themselves or someone else against
financial hardship should consider insurance.
Protecting your home against theft, fire, flood and other hazards
Protecting yourself against lawsuits
Protecting yourself in the event of disability
Protecting your business from business interruption and loss of income
Protecting yourself against unforeseen able health expenses
Protecting your Vehicle against theft or losses incurred because of accidents
And many more………
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∗ Insurable Interest:Insurable Interest: A person has an insurable interest in something
when loss or damage to it would cause that person to suffer a financial
loss or certain other kinds of losses. In order to exercise an insurable
interest, you must take out an insurance policy protecting the item.
Indemnity:Indemnity: Indemnity is one of the principal of the insurance. In
insurance context indemnity means “put back the insured at the same
financial position after a loss as he enjoyed immediately before it
occurred”.
• Utmost Good faith:Utmost Good faith: The duty of good faith can be defined as ‘a
positive duty to voluntarily disclose, accurately and fully, all facts
material to the risk being proposed, whether asked for them or not’.
∗ Proximate CauseProximate Cause :: The most direct, effective or substantial cause of a
tort; relevant where the negligence of more than one person
contributed.
Principles of InsurancePrinciples of Insurance

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Engineering InsuranceEngineering Insurance
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Engineering Insurance:Engineering Insurance:
Engineering insurance refers to the insurance that provides economic safeguard to the
risks faced by the ongoing construction project, installation project, and machines and
equipment in project operation.
Following is the list of products under Engineering Insurance:
(A)(A) Contractor’s All Risks Insurance (C.A.R)Contractor’s All Risks Insurance (C.A.R)
It offers adequate protection against loss or damage in respect of contract works,
construction plant and equipment and/or construction machinery. It also covers third
party claims in respect of property damage or bodily injury arising in connection with
the effecting of various construction projects
(B) Contractor’s Plant & Equipment Insurance (C.P.E)(B) Contractor’s Plant & Equipment Insurance (C.P.E)
This is an insurance of contractors' plant and machinery on an annual basis. It covers
any loss or damage occurring at work, at rest or during maintenance operations and is
limited to a specific construction site.
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Engineering InsuranceEngineering Insurance
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(C) Erection All Risks Insurance.(E.A.R) not annual basis(C) Erection All Risks Insurance.(E.A.R) not annual basis
The Erection All Risk policy is specially designed to cover loss or damage to projects
that involves erection/installation of plant, machinery and equipment ranging from
erection of a single machine to a large power plant. It also includes cover for damage
to property of third parties and bodily damage to third parties.
Machinery Breakdown Insurance (MBD):Machinery Breakdown Insurance (MBD):
This is a policy which covers financial loss incurred by the insured due to loss or
damage to machinery as a result of sudden accidental electrical and/or mechanical
breakdown due to internal defects and/or external sources.
Electronic Equipment Insurance (EEI)Electronic Equipment Insurance (EEI)::
Electronic equipment is defined as any low and medium voltage devices such as a
computer, telecommunication and medical equipment.
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11. FIRE INSURANCEFIRE INSURANCE

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Fire InsuranceFire Insurance
Fire insurance means insurance against any loss caused by fire. defines fire insurance as
follows: “Fire insurance business means the business of effecting, otherwise than
incidentally to some other class of business, contracts of insurance against loss by or
incidental to fire or other occurrence customarily included among the risks insured
against in fire insurance policies.”
∗RISK COVEREDRISK COVERED
∗Fire & Lightening
∗Earthquake
∗Explosion
∗Aircraft
∗Impact by road vehicles
∗Floods

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Marine InsuranceMarine Insurance
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Marine Insurance:Marine Insurance:
Marine Insurance covers damages to the shell and machinery of the vessel, cargo carried on the vessel, and
also offers protection against liabilities to shipping and transport related companies.
Following is the list of products under Marine Insurance,
(A) Marine Cargo Insurance:(A) Marine Cargo Insurance:
Marine Cargo Insurance is the type of insurance which provides cover to goods when they are being
transported from one place to another.
(i)- Imports and Export.(By Sea , By Air , & By Rail/ Road)
(ii)- Inland Transit – By Road /Rail, and by Air
(B) Marine Hull Insurance:(B) Marine Hull Insurance:
This type of marine insurance is mainly taken out by the owner of the ship in order to avoid any loss to the
ship in case of any mishaps occurring.
(C) Marine Umbrella:(C) Marine Umbrella:
Marine Umbrella Liability is a broad spectrum cover offering protection against liabilities to shipping / logistics
and transport related companies.
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Marine InsuranceMarine Insurance
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..
“Protecting Your Business is Our Business ”
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Terrorism InsuranceTerrorism Insurance
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Terrorism Insurancerorism Insurance ::
Terrorism means an act or series of acts, including the use of force or violence, of any person or group(s) of
persons, whether they acting alone or on behalf of or in connection with any organisation(s), committed for
political, religious or ideological purposes including the intention to influence any government and/or to put the
public in fear for such purposes. AICL offers this unique cover in conjunction with fire and engineering
policies for our customers with a maximum limit of liability of Rs. 2.5M.
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Motor InsuranceMotor Insurance
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∗Motor Insurance :Motor Insurance :
Motor Insurance policy is mandatory under the Motor Vehicle Act 1939. Motor Insurance ensures that the
owner of vehicle is protected from financial losses, caused by damage or theft to the vehicle and third party
liability.Third Party insurance covers damage to someone else's property or vehicle, but not your own
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Miscellaneous InsuranceMiscellaneous Insurance
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∗Miscellaneous Insurance:
∗Cash in Safe (C.I.S) :
The ‘Cash in Safe’ policy covers the insured business owner against loss or destruction of or damage to
money while in safe at business premises.
∗Cash in Transit (C.I.T) :
Cash-in-transit (CIT) or Cash/valuables-in-transit (CVIT) is the physical transfer of banknotes, coins and
items of value from one location to another.
∗Live Stock Insurance :
Livestock insurance is cover taken out by farmers and commercial owners of animals. Adamjee Insurance
covers electrocution, disease or accidental death, bodily injury, death due to fire and lightning, Snake bite and
earthquake coverage can be taken additionally.
∗Travel Insurance :
Travel insurance is insurance that is intended to cover medical expenses, trip cancellation, lost luggage,
flight accident and other losses incurred while traveling, either internationally or within one's own country.
∗Agriculture Insurance :
Agricultural Insurance provides to farmers with financial protection against production losses caused by
natural perils, such as drought, excessive moisture, hail, frost, wind and wildlife.
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∗Health Insurance:
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HEALTH INSURANCEHEALTH INSURANCE

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Losses we handled
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