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Woodwork Factory Module 5
Copyright © Santam Ltd. 2007 Course code: ASSESS123 / Module 5
Copyright © Santam Ltd. 2007 2 Course code: ASSESS123 /Module5
Module introduction LWC Woodworks was taken over by Mr X, the new owner. Currently, Mr X only has a personal policy with a claims ratio of below 30% for the past five years. Since he is highly satisfied with the service of SA Insurers, he approaches you to give him a quotation for his new business. The prospective insured has never had a commercial policy and will therefore ask you a couple of general questions. You inform him that you will have to do a review of the business before you may provide him with a quotation. The following sections are relevant to this case study: • Section: General • Section: Fire • Section: Business Interruption • Section: Theft • Section: Motor • Section: Public Liability • Section: Electronic Equipment and reinsurance After the application form has been completed, Mr X will once again ask you a couple of questions. If you use the following guidelines in relation to this risk, you will be able to complete this module effortlessly. 1. Firstly, read the module thoroughly. 2. Then, complete the questions of Task 1. 3. Study the content of Task 2.
• Complete the inspection reports. • Complete the quotation and recommendation/requirement form. • Complete the application form, as well as the underwriting/clause
form. 4. Now, complete the questions of Task 3.
Copyright © Santam Ltd. 2007 3 Course code: ASSESS123 /Module5
Module objective The goal of this module is to evaluate your knowledge of the following aspects of a woodwork factory as a risk:
• General questions continually asked when applying for insurance;
• Risk evaluation with the necessary recommendations;
• Completion of an application form and the application of underwriting principles; and
• The answering of questions on possible changes in the risk.
Motivate your answers with the relevant facts throughout to qualify for the maximum allocation of marks as indicated per question. Case study Task 1 1. Mr X wants to know on which day of the month his debit order will be collected. Does
he have a choice or is it on a fixed date? ______________________________________________________________________________
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2. Will he still enjoy cover if his debit order is not collected due to insufficient funds?
Some of his clients may fail to pay their accounts on time, which could lead to a shortage of money in his bank account. Remember that Mr X has recently taken over the business and his cashflow is subject to the payments he receives from clients.
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Copyright © Santam Ltd. 2007 4 Course code: ASSESS123 /Module5
3. According to an agreement with his bank, he had to insure the machinery on hire-purchase with them. What will happen in the event of a claim?
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4. He is planning to buy another delivery vehicle (LDV) soon. Will he have to inform Santam immediately or will it be covered even though a premium has not yet been agreed to?
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5. Mr X wants to know what the term “first loss basis” means and when does it apply. ______________________________________________________________________________
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6. Mr X wants to know how many days’ notice is required for the cancellation of his
policy.
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7. Mr X wants to know how we go about in determining the gross profit (sum
insured) for Business interruption. Illustrate the two methods in short. ______________________________________________________________________________
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Copyright © Santam Ltd. 2007 5 Course code: ASSESS123 /Module5
8. The insured wants to know over which period in time we will compensate him for his
loss in profit. Most of his machinery is imported and the period from placing the order to delivery could take up to 18 months. And he also foresees that it could take him a minimum of 6 months to return to normal production after a loss. (Explain in full the indemnification limits / options available to him and give him a direct answer to his unique needs).
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9. Mr X informs you that his rent amounts to R30 000 per month for the two premises. He is worried that the owner of the building may hold him responsible for the rent of the whole premises if for instance a fire hampers production. Under which section should he insure the rent?
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Copyright © Santam Ltd. 2007 6 Course code: ASSESS123 /Module5
10. Lastly, the insured would like know if he is in terms of Section Fire covered for the wages of his labourers should he not make use of their services for a specific time. He would prefer not to dismiss them, but rather retain their expertise.
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TOTAL
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Copyright © Santam Ltd. 2007 7 Course code: ASSESS123 /Module5
Task 2 LWC Woodworks approaches you to give them a quotation on their business. They do not have a policy, but have the following amounts available: Value of woodwork machinery R10 000 000 Value of hand tools R 200 000 Value of timber (average on premises) R 550 000 (purchase cost) Value of ready-made products (average on premises) R 200 000 (cost price)
R 250 000 (selling price) Value of spraying rooms (insured’s own property) R 20 000 Value of paint, glue and other mediums R 10 000 Value of office furniture and equipment R 30 000 Average amount of money on premises R 5 000 He wants theft cover for all his hand tools R 200 000 Isuzu 250 diesel bakkie (LDV) R 80 000 Trailer R 15 000 He wants liability cover R 2 000 000 including Products liability R 500 000
Electronic equipment
Description Date of purchase
New value Market value
1x Acer Veriton 3200 computer (serial number 1234)
01/2003 R 5 000 R 3 000
1x Acer Veriton 3200 computer (serial number 1224)
01/2003 R 5 000 R 3 000
1x Acer Veriton 5500 computer (serial number 1244)
03/2004 R 6 000 R 5 000
1x HP colour Laserjet 4500 printer (serial number 000888)
10/2003 R 15 000 R11 000
1x Minolta fax machine (model MF 2800) (serial number 335577)
12/1999 R 8 500 R 3 000
1x Minolta photocopier (model PS 3600) (serial number 336688)
01/1995 R20 000 R 5 000
Copyright © Santam Ltd. 2007 8 Course code: ASSESS123 /Module5
Turnover for 2004 by previous owner R 10 000 000 Projected turnover for 2005 R 10 833 000 (escalation of 8,33%) Trade account and profit and loss account of previous owner for 2004 are as follows:
Profit and loss account DT CT
Rent for 2 premises R 360 000 Interest on investments R 12 000 Salaries
R1060 000
Profit on investments converted into money
R 2 000
Commission (representative)
R 240 000 Rent received (Store in Pretoria)
R 60 000
Electricity R 36 000 GROSS PROFIT R5 602 000 Vehicle costs R 120 000 Telephone costs R 12 000 Delivery costs R 360 000 Discount granted R 100 000 Advertising costs R 24 000 Auditor’s fees R 70 000 Insurance R 50 000 Interest (overdraft bank account)
R 14 000
Pension fund contributions
R 70 000
Legal costs R 30 000 Depreciation R 100 000 Bad debt R 30 000 NETT PROFIT R3000 000 TOTAL R5676 000 TOTAL R5676 000
Trade account Opening stock Purchases Discount Gross profit
R 3 000 000 R 3 298 000 R 100 000 R 5 602 000
Turnover Closing stock
R10 000 000 R 2 000 000
Total R12 000 000 Total R12 000 000 You inform him that you have to do an overview before you could give him a quotation. Use the site layout and visual material to evaluate the risk.
Copyright © Santam Ltd. 2007 9 Course code: ASSESS123 /Module5
SITE LAYOUT
DRAIN FIRE EXTINGUISHER FIRE HOSE
C O N S T R U C T I O N : WALLS: BRICK ROOF : CORRIGATED IRON
YARD YARD
SPRAY BOOTH
SPRAYBOOTH
WORKSHOP 2 (BUILDING 2)
WORKSHOP 1 (BUILDING 1)
OPENING
CLOAKROOMS & OFFICES (LOW & UPPER LEVEL)
STREET
YARD
Copyright © Santam Ltd. 2007 10 Course code: ASSESS123 /Module5
Inspection reports Complete the following inspection reports to determine the risk. 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.
FIRE SURVEY REPORT
TO: ………………………………………….…… FROM: …………………………………………… BRANCH: ………………………………….…… SURVEYOR: ….…………………………...…… DEPARTMENT: ………..……………………… SURVEY NUMBER: ………..…………………. REFERENCE: ………….……………………… DATE: ……..………………….…………………. DATE: ……..……………………………………. Name Address Postal code Occupation Area class: ( ) Retention class: Construction class: GENERAL DESCRIPTION Locality Industrial Commercial Closed Shopping Centre Residential Other Details (if other)
Construction Roof Reinforced Concrete Corrugated Iron Tiles
Thatch Saw tooth Details other
Box guttering Condition of gutters Good Poor Skylights Plastic Fibre glass Walls Reinforced concrete Brick I.B.R. Details other Is building older than 10 years? YES NO r No. of floors No. of basements Construction of floors Concrete Timber Condition of premises Good Average Poor Adjacent exposure Low r Average Poor Rivers/Canals Debris Block-up Detail (Type of exposure) Adjacent Risk Communcates YES NO r Seperation by Security Chain link fence 2m Wall Access Control
Street lights r Floor Lights 24hr Security Electric Perimeter fence
S.A.I.D.S.A. Corporate Alarm Other Alarm - Name
Copyright © Santam Ltd. 2007 11 Course code: ASSESS123 /Module5
Electrical Municipal supply Eskom Supply
Contact Breakers Condition appears to be- Good Otherwise
Flexible extenstion leads noted YES NO r
Are plug points overloaded? YES NO
Process (if major process involved, attach on separate sheet)
None Storage/Retail/Distribution only
Heat Process/Welding/Grinding Flammable liquids Quantity
Flammable liquid store – brick under concrete slab YES NO
LP Gas installation ons site Number of cylinders Size …………………KG
Is wall block manifold in good condition YES r NO
All goods stored on racking or pallets Ja Nee If ‘Yes’, height of floor ……………..mm
Construction of racking Timber Steel
Storage Neat, tidy and well organised Ja Nee
Risk congested Disorganised Untidy
Spray painting (detail) Deep fat cooking
Grease extraction filters clean YES NO
Fire Protection
Local Fire Brigade ( ) would attend any ourbreak of fire Fire Station is = …………15…………kms from risk
Appliances on Site – hand held YES NO
Size Number of extinguishes
Service dates marked YES r NO Last date
30m Hose Reels YES r Number of None
Have staff been trained in the use of Fire Extinguishers YES NO
Easy Access to appliances YES NO Hydrant ring main YES r NO
Automatic Sprinklers YES NO
A.S.I.B. Certificate Valid YES r NO
Sprinkler Detail – contact number
Edition ……………….…………………………Supply …….…………………………………………Units ………….…………………….. Hazard…………………………………………Stack Height ………………………………………… Requirements (A.S.I.B.) YES NO Smoke Detectors YES NO
Water Supply Municipal r Bore Hole Dam
Copyright © Santam Ltd. 2007 12 Course code: ASSESS123 /Module5
LOSS HISTORY
Date
Amount – R
Cause Remedial action MANAGEMENT & HOUSEKEEPING
General Standard Good Average Poor
Waste Disposal Good Average Poor
Smoking Permitted YES NO r
If no, were used smoking materials noted YES NO
Are no smoking signs on display? YES NO
Specified rules for smoking (i.e. smoke areas, etc.) None
Are flammable materials located against or between buildings YES NO
MAXIMUM PROBABLE LOSS (M.P.L.)
All under one roof with free internal communication MPL 100% YES NO
Risk separated by fire break wall or detached buildings YES NO
If in your opinion less han 100% supply site plan Attached
Are buildings less than 5 metres apart? YES NO
Seperation of buildings
OPINION OF RISK
Good Average Poor
Risk acceptable YES NO
Moral Hazard Good Poor
Inception Hazard High Medium Low
Spread Hazard High Medium Low
Fire Load High Medium Low
FURTHER COMMENT
If yes, see attached Complete attached comments and recommendations
Risk improvement requirements attached? YES NO
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Surveyor
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Date
Copyright © Santam Ltd. 2007 13 Course code: ASSESS123 /Module5
THEFT SURVEY REPORT
TO: ………………………………………….…… FROM: …………………………………………… BRANCH: ……………………………..………… SURVEYOR: …………………..…………...…… DEPARTMENT: ………………………………… SURVEY NUMBER: …………………………….
REFERENCE: …..……………………………… DATE: …………………….……………..………. DATE: ……….…….……………………………. Name
Address P.O. code
Business
Established 1999 This address: r Previous address:
LOSS OF HISTORY
Date of loss Amount of loss
Entry made via Insured by
Additional protections fitted following loss
Theft record area Good r Average Poor
CONSTRUCTION OF PREMISES
Walls Roof Ceilings
No. of floors Portion occupied
Occupied as
INSURED’S NORMAL WORKING HOURS
Monday to Friday Saturday Sunday
Who is on the premises after hours?
Totals E.M.L. Attractive Goods
Stock in trade R R Clothing R
Goods in trust R R Electronic equipment R
Machinery & Plant R R Cigarettes & Tobacco R
Office fixtures & fittings R R Non-ferrousmetals R
Computer equipement R R Radio’s, TV & VCR’s R
Motor hand tools R
Total R R Camera’s /Jewellery R
ALARM SYSTEM INSTALLED Yes No
Name of installer
S.A.I.D.S.A. approved? Yes r No
Type of system Radio r Siren Communicator
System satisfactory? Yes No
See attached risk improvement requirement? Yes No
Inspector……………………………………………..……………………………………. Date ……………17/12/2004…………………
Copyright © Santam Ltd. 2007 14 Course code: ASSESS123 /Module5
Name Surveyor
Situation Survey no.
Date
Scale
x1999 None
N.A. N.A.
N.A. N.A.
N.A.
x
Yes No NoNone
xx
PLAN
Copyright © Santam Ltd. 2007 15 Course code: ASSESS123 /Module5
Comment and requirements following on inspection reports ______________________________________________________________________________
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Copyright © Santam Ltd. 2007 16 Course code: ASSESS123 /Module5
Quotation
Section Sum insured Tariff Premium Excess
Fire • Equipment • Stock and material in trade
0,650%
Business Interruption • Gross profit (difference basis) • Indemnity limit – refer to
Question 8 of Task 1
0,487%
Theft • First loss
Propose R30 000
8% 10% of claim min R500
Motor Isuzu 250KB (LDV) • Reg. number: ABC123 GP • Use: Business • Model: 2002 • NCB 4 • Area 1 • Engine number 11223344 • VI number 99001122 • Loss of keys • Cover: Comprehensive Trailer • Reg. number: ABC111 GP • Use: Business • Model: 2002 • Cover: Comprehensive
R80 000 R 1 000 R15 000
R10 023 R50 R450 (less 40% discount) = R270
10% of claim min R1 500 Hijacking: 10% of claim min R3 500 10% of claim min R500
Public Liability (Claims basis) • Products liability
R2 000 000 R 500 000
R1 100 R 500 Included
5% of claim min R1 500 per event
Electronic equipment
3% 10% of claim min R500
Total
Copyright © Santam Ltd. 2007 17 Course code: ASSESS123 /Module5
Recommendations/requirements ______________________________________________________________________________
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Copyright © Santam Ltd. 2007 18 Course code: ASSESS123 /Module5
Application form Complete the application form with reference to the last-mentioned information. 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 (if necessary). Example “Clause 1” – Burglar alarm condition with armed response unit “Clause 2” – Security gates at all outer doors It is expected of you to complete the following aspects with regard to reinsurance under the only for office use section of the application form: • Highest single risk (HSR) • Maximum probable loss (MPL) • Same risk number (identify the same risk) 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. The remaining details necessary to complete the application form are as follows: Insured: Loubser Woodworks T/A LWC Woodworks Company reg. no.: 200040101283 VAT no.: 112233 Tel.: (011) 900 0000 Fax: (011) 900 0000 E-mail address: lwc@xxx.com Postal address: PO Box 123 Street address: 100 Middle Street Krugersdorp Krugersdorp 1739 1740 Contact person: Mr X
Copyright © Santam Ltd. 2007 19 Course code: ASSESS123 /Module5
Banking details: Loubser Woodworks T/A LWC National Bank Krugersdorp Account number: 12345678 (current account) Branch identification number: 11223344 Monthly payment – before the 1st day of each month
Inception date: 1 January 2005 Remember to complete the reinsurance aspects under the only for office use section of the application form. Remember: Business Interruption should also be considered. The insured doesn’t want cover for riot and strike.
Copyright © Santam Ltd. 2007 20 Course code: ASSESS123 /Module5
APPLICATION FOR INSURANCE Multimark III
[Mark applicable choice with a . Areas marked with grey MUST ALWAYS be completed] For office use
CLIENT DETAILS
Current/previous Santam Insurance? No Yes Current/previous policy number: ……………………………………
Short name :……………………………………………………………………………………………………………………………. [Name that will appear on the alphabetical index on computer]
Full Trading name :……………………………………………………………………………………………………………………………..
[Namae that will print on policy schedule] Company Reg. No :……………………………………………… VAT No.: ………………………………………………………… Language : Afrikaans English Telephone number : ……………………………………………… Area code: ………………… Int. Code: ……………………… Fax Number : ……………………………………………… Area code: ………………… Int. Code: ……………………… Cellular telephone : ……………………………………………… E-mail address : ……………………………………………… Postal Address : ……………………………………………… Street address: ………………………………………………………. (Premisesl 1 should ………………………………………………. (Premises 1) ……………………………………………………….. this be a street address) if diff. from ……………………………………………… postal address)……………………………………………………….. ……………………………………………… ……………………………………………………….. Postal code : ……………………………………………… Postal code ……………………………………………………… Contact person : ……………………………………………… Responsible area: ………………………………….
GENERAL AREA
1. Has Santam Ltd. Or any other insurer ever turned down your application for insurance, cancelled any policy (or part thereof),
imposed any special conditions, refused to renew any policy or part thereof, or refused to continue any part of your insurance? If YES, please supply the details on the attached memorandum [include/excluded]
2. History of previous losses/claims. Please supply the details regarding any losses you might have sustained during the past five years, including all claims whether paid out or not.
Type of loss/claim Year Amount Insurer
DECLARATION
I/We hereby declare that the particulars and declarations in this application are correct and complete and include all information known to me/us and which concern the risks to be insured, and that this and any other written declaration made by or on behalf of me/us and Santam Limited and that it will be binding. I/We also declare that should such particulars and answers be in the handwriting of any other person except myself/ourselves, such a person will be considered to have been my/our agent for the purpose of filling out the application. I/We hereby further declare that only policy sections where I/we have indicated by answering the questions that cover was required will apply. Signed at …………………………………………… on …………/…………../………….. by ……………………………………..[applicant]
New Policy Number
NEE JA
Copyright © Santam Ltd. 2007 21 Course code: ASSESS123 /Module5
POLICY CONTENTS Policy type: Client no.: Inception date: Renewal date: ……../……./…….. ……../……./……..
Annual Premium Mark with Policy Sections Policy SARIA: Yes / No
1 Fire 2 Buildings combined 3 Office contents 4 Business interruption 5 Accounts receivable 6 Theft 7 Money 8 Glass 9 Fidelity 10 Goods in Transit 11 Business all risks 12 Accidental damage 13 Pucblic Liability 14 Employers’ Liability 15 Stated benefits 16 Group personal accident 17 Motor 18 External risks 19 Internal risks 20 Homeowners 21 Machinery breakdown 22 Electronic equipment 23 Machinery – Business interruption 24 Householders 25 Deterioration of stock
Total annual premium ÷ 12 = monthly premium
TOTAL AMOUNT PAYABLE Broker’s Fee
METHOD OF PREMIUM PAYMENT Cash Annualy of Monthly per debit order against account being a cheque account a transmission account a credit card account
Debit order detail and authorisation Bank name / address Institution code Branch code
(bank/branch identification number)
Account number (client idenditifaction number)
Account holder (name of account with institution)
D/O frequency: Monthly Annual Monthly debit order collection date: On, or last working day voor* 29th 30th 31st 1st On, or first working day na 25th 26th 27th 28th Two working days after 15th
* Plase note that for this option, collection will take place on the last day before this date in the event of this date dalling on a weekend or public holiday. I authorise Santam Limited (SANTAM) to deduct the amount of the premium for this policy frommy account at the above-mentioned institution in any way that Santam and the institution have agreed upon. I also authorise Santam to pay any amounts, which may accrue to me, to the credit of my account with the above-mentioned institution. All such withdrawals from my bank account by Santam shall be treated as though they have been signed by me personally
…………………………………………………………. SIGNATURE OF ACCOUNT HOLDER
Copyright © Santam Ltd. 2007 22 Course code: ASSESS123 /Module5
GENERAL POLICY INFORMATION
Agency number: or Agency
name:
Industry: Or Code:
Rewal Code: 0 Does not renew 1 Presented anually 6 Branch renews [by hand]
Co-insurance: 0 No co-insurance 1 Co-insurance lead 2 Co-ins, participating
If collective Placing number:
Participating companies
Insurer Polisnommer %
Brokers fee R:
Survey number Survey date:
Surveyor
Clauses applicable:
Number % Amount Number % Amount
Same risk policy number:
DETAILS OF PREMISES
Should several premises be covered, complete the additional physical address – different from the address listed as Premises 1 under
“Street address” on page 1:
Premises 2 Premises 3 Premises 4 Premises 5
Code: Code: Code: Code:
Business: Business: Business: Business:
ADDITIONAL COMMENTS
Copyright © Santam Ltd. 2007 23 Course code: ASSESS123 /Module5
SECTION 1 FIRE
Policy number and name (for amendment purpose) [Mark applicable choice with a . Areas marked with grey MUST ALWAYS be completed]
GENERAL SECTION DETAILS
Additional CPC limit: (exceeding R1 000 included) R……………………………… Premium: R…………………………………… Highest risk item number: ……………………………….
ITEM DETAILS
Item Item Item Item
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For exisiting policy/item,
please indicate:
From: / / / / / / / /
Premises no./address:
Column ref 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Occupation description: (what is insured and what is it
used for?)
Sum insured: R R R R
Construction: S N G S N G S N G S N G
For “N” please complete Roof
For “N” please complete
Walls
Rental – number of months
Type of rent 1 2 3 1 2 3 1 2 3 1 2 3
Com
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Cession/HP
Cession holder:
Cession/HP no.:
Expiry date: / / / / / / / /
Survey number.:
Survey date: / / / / / / / /
Surveyor:
Column reference is as follows: Type of rent
1. Rent receivable
2. Rent payable
3. Rent value
Construction
S – Standard
N – Non-standard
1. Buildings, including owner’s loose and fixed fittings therein or thereon, walls (except) dam walls,
gates, gate posts and enclosures
2. The number of months’ rent as mentioned in the schedule
3. Equipment, machinery, the owner’s loose and fixed fittings for which the insured is responsible, as
well as all other contents – with the exclusion of property that has been specifically insured.
4. Stock and materials in trade
5. Miscellaneous as described
G – Thatch roof
Copyright © Santam Ltd. 2007 24 Course code: ASSESS123 /Module5
Basic and extensions Item Item Item Item
Fire/Light/Expl:
Premium
R R R R
Earthquake: Yes No Yes No Yes No Yes No
Malicious damage” Yes No Yes No Yes No Yes No
Special perils: Yes No Yes No Yes No Yes No
R R R R Riot and strike
Premium
Premises
Subsidence/Landslip
Premium
R R R R
R R R R Leakage:
Limit
Premium
R R R R
Disposal of salvage Yes No Yes No Yes No Yes No
Yes No Yes No Yes No Yes No Stock declaration
Basis Month (M) Quart (K)
Percentage (75% - 100%) % % % %
% % % % Inflation/escalation %
Premium R R R R
OFFICE USE ONLY
Item Item Item Item
Occupation code:
HSR: R R R R
EML: % % % %
Same risk no:
Slip number:
Bordereau number
Total facultative %
Reinsurer
Reinsurer policy number
Reinsurer’s facultative %
Contact person
Clauses applicable: (Complete according to inspection report)
Number % Amount Number % Amount
Notes:
Copyright © Santam Ltd. 2007 25 Course code: ASSESS123 /Module5
BUSINESS INTERRUPTION
Policy number and name (for amendment purpose) [Mark applicable choice with a . Areas marked with grey MUST ALWAYS be completed]
GENERAL SECTION DETAILS
Additional CPC limit: (exceeding R1 000 ingesluit) R……………………………… Premium: R…………………………………… Highest risk item number: ……………………………….
ITEM DETAILS
Item Item Item Item
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For an existing policy/item please
indicate:
From: / / / / / / / /
Specification number:
Indemnity period: Months Months Months Months
Sum insured: R R R R
Spesification 1 only Gross Profit basis
Additions Difference Additions Difference Additions Difference Additions Difference
Spesification 5 only Wages – number of weeks
4 8 12 4 8 12 4 8 12 4 8 12
Premium R R R R
Specification 1, 2, 3 only Premium Deposit
Yes No Yes No Yes No Yes No
Additions basis:
Provide list of fixed costs
OR
Difference basis:
Provide list of uninsured costs
Specification number Indemnity period 1 Gross profit 1 Month 9 Months 2 Gross rentals 2 Months 12 Months 3 Revenue 3 Months 18 Months 4 Additional increase in cost of working 4 Months 21 Months 5 Wages (number of weeks) 5 Months 24 Months 6 Fines and penalties 6 Months 36 Months 7 Standing charges 8 Extensions
Copyright © Santam Ltd. 2007 26 Course code: ASSESS123 /Module5
Extensions Item Item Item Item
Specified suppliers Local Overseas Local Overseas Local Overseas Local Overseas
Limit % % % % Premium R R R R
Unspecified suppliers Local Overseas Local Overseas Local Overseas Local Overseas
Limit % % % % Premium R R R R
Prevention of access Yes No Yes No Yes No Yes No Extended coverage: Premium R R R R Specified customers Local Overseas Local Overseas Local Overseas Local Overseas
Limit % % % % Premium R R R R
Unspecified customers Local Overseas Local Overseas Local Overseas Local Overseas
Limit % % % % Premium R R R R
Public utilities Insured perils Premium R R R R Extended cover Premium R R R R Public telecommunication Insured perils Premium R R R R Extended cover Premium R R R R
Specified suppliers
Specified customers
OFFICE USE ONLY Item Item Item Item Schedule item link: HSR: R R R R EML: % % % % Same risk no.: Slip number:
Bordereau number Total facultative %
Reinsurer Reinsurer policy number Reinsurer’s facultative %
Contact person Clauses applicable (Complete according to in section report)
Number % Amount Number % Amount Notes:
Copyright © Santam Ltd. 2007 27 Course code: ASSESS123 /Module5
THEFT
Policy number and name (for amendment purpose) [Mark applicable choice with a . Areas marked with grey MUST ALWAYS be completed]
GENERAL SECTION DETAILS Additional CPC limit: (exceeding R1 000 included) R……………………………… Premium: R……………………………………
ITEM DETAILS Item Item Item Item
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For an existing policy/item please indicate:
from: / / / / / / / /
Premises no / address:
Occupation description: (what is insured and what is it used
for?)
First loss limit: R R R R
Spesific description:
Unprotected goods: YES NO YES NO YES NO YES NO
Value of total goods R R R R
Construction description
Roof Walls
Protection:
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Cession/HP
Cession holder:
Cession/HP no.:
Expiry date: / / / / / / / /
Survey number.:
Survey date: / / / / / /
Surveyor:
Basic and Extensions Item Item Item Item Basic cover: Premium
R R R R
Alarm condition YES NO YES NO YES NO YES NO
Locks and keys exceeding R2500 free limit
YES NO YES NO YES NO YES NO
Limit R2 500 R R R
Premium R included R R R
Damage to buildings exceeding R5 000 free limit
YES NO YES NO YES NO YES NO
Limit R R R R
Premium R R R R
Copyright © Santam Ltd. 2007 28 Course code: ASSESS123 /Module5
OFFICE USE ONLY Item Item Item Item
Occupation code:
Slip number:
Bordereau number
Total facultative %
Reinsurer
Reinsurer policy number
Reinsurer’s facultative %
Contact person
Clauses applicable: (Complete according to inspection report)
Number % Amount Number % Amount
Notes:
Copyright © Santam Ltd. 2007 29 Course code: ASSESS123 /Module5
MOTOR SPECIFIED
Policy number and Name [for amendment purposes]: [Mark applicable choice with a . Areas marked grey MUST ALWAYS be completed]
GENERAL SECTION DETAILS Extenstions/Limitations
Description Applicable Amount/Limit Premium
Liability: Contingency exceeding R2 500 000 R R
- Rating Group ▲ 1 2 3
- Number of persons
Parking facilities and moving of 3rd party vehicles R R
- Number of parking bays
▲ Rating group: 1 – person of Municipality, Public services 2 – Students/Scholars 3 – Any other persons other than group 1 and 2
ITEM DETAILS Item Item Item Item
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For an existing
item/policy, please
indicate:
Vanaf: / / / / / / / /
Motor category A B C F G A B C F G A B C F G A B C F G
Class of use Type of cover 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7
Registration no.
Year manufact.
Make
Model
Postal code
Limit of indemnity R R R R
No claim bonus 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Discount % % % % %
Vol. Excess disc. % % % %
Premium loading R R R R
Auto loading R R R R
Security 1/VSS
No. of installer 1 321
Name of installer XYZ
Receipt date 113/2002
VESA certificate no. 333 666
Premium R R R R
Gross mass/cc Engin number VIN number
HIRE PURCHASE (FOR CREDIT SHORTFALL PURPOSES) Item Item Item Item Institution number: 100101
H P owne:r ABSA
Hire Purchase no.: 112233999
Expiry date: 31/12/2005
Motor catergory: A = Private Motors & LDV’s B = Commercial vehicle C = Motor cycle F = Buses G =Caravan/Trailer
Cover 1 – Comprehensive cover 2 – Third Party, Fire and Theft 3 – Third Party Only 4 – Comprehensive cover. Excl. Theft & Hijack 3 – Third Party, Fire, Excluding Theft & Hijack 5 – Comprehensive cover with limited Theft/Hijack 4 – Third Party, Fire with Limited Theft/Hijack
Copyright © Santam Ltd. 2007 30 Course code: ASSESS123 /Module5
Accessories
Accessory no. Description Limit R R R R Premium R R R R
R R R R % Of claim % Of claim % Of claim % Of claim Excess payment % Sum insured % Sum insured % Sum insured % Sum insured
Accessory no. Description Limit R R R R Premium R R R R
R R R R % Of claim % Of claim % Of claim % Of claim Excess payment % Sum insured % Sum insured % Sum insured % Sum insured
Liabilities
Sub-section B Liability Limit R2 500 000 R R R
Premium R included R included R R Passenger Liability
Limit R2 500 000 R R R Premium R included R R R
Paid Paid Paid Paid Number of seats Non-paid Non-paid Non-paid Non-paid
Unauthorised Passenger Liability Limit R R R R
Premie R R R R Standard Extensions
Windscreen / window Yes No Yes No Yes No Yes No Premie R R R R
Riot & Strike Limit R R R R Premium R R R R Credit shortfall Limit R R R R
Premium R R R R Loss of use Limit R R R R
Premium R R R R Loss of keys Limit R R R R
Premium R R R R Wreckage Limit R1 000 R1 000 R R Removal Premium R R R R
Non-standard Extensions
Extenstion No. Description
Limit R R R R Premium R R R R
R R R R % Of claim % Of claim % Of claim % Of claim Excess Payment % Sum insured % Sum insured % Sum insured % Sum insured
Extenstion No. Description
Limit R R R R Premium R R R R
R R R R Excess Payment % Of claim % Of claim % Of claim % Of claim
% Sum insured % Sum insured % Sum insured % Sum insured Limitations
Radio R1 500 R R R Vehicle telephone R R R R CD Player R1 500 R R R Mag wheels R R R R
Copyright © Santam Ltd. 2007 31 Course code: ASSESS123 /Module5
Excess and excess insurance
Excess:
Basic R R R R
% Claim % Claim % Claim % Claim OR
% Value % Value % Value % Value
Insurance for basic excess: Yes No Yes No Yes No Yes No
Premium R R R R
Excess:
Theft R R R R
% Claim % Claim % Claim % Claim OR
% Value % Value % Value % Value
Insurance for theft excess: Yes No Yes No Yes No Yes No
Premium R R R R
Windscreen R R R R
%
Claim Min
R350 % Claim % Claim % Claim OF
% Value % Value % Value % Value
Voluntary amount R R R R
Persons under 25 R250 R R R
R R R R
% Claim % Claim % Claim % Claim
Sub-division B
Liability
OR % Value % Value % Value % Value
OFFICE USE ONLY Item Item Item Item
Excess of loss:
Bordereau number
Priority R R R R
Participating Co.
Participating policy no.
Participation R R R R
Clauses applicable Number % Amount Number % Amount
Notes:
Copyright © Santam Ltd. 2007 32 Course code: ASSESS123 /Module5
SECTION 13
PUBLIC LIABILITY
Policy number and name [for amendment purposes] [Mark applicable choice with a . Areas marked grey MUST ALWAYS be completed]
GENERAL SECTION DETAILS
ITEM DETAILS Item Item Item Item
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For an existing policy/item please indicate:
From: / / / / / / / /
Basis of cover Claims made Occurance
Claims made Occurance
Claims made Occurance
Claims made Occurance
Occupation description: (what is insured and what is it used for?)
Retroactive date Claims made basis only / / / / / / / /
Premises no./Address
Total number of premises
Limit of indemnity R R R R
Other premises with their occupation description
Basic first amount payable % of claim % of claim % of claim % of claim
With a minimum of R R R R OR a basic amount
of R R R R
Workaway first amount payable
% of claim % of claim % of claim % of claim
With a minimum of R R R R OR a basic amount
of R R R R
Basic & Extensions Item Item Item Item Basic Cover:
Premium R R R R
Product Liability: Product
Limit R R R R Turnover R R R R Premium R R R R
Basic first amount payable % of claim % of claim % of claim % of claim With a minimum of R R R R
OR a basic amount of
R R R R
Defective workmanship Limit R R R R
Turnover R R R R Premium R R R R
Basic first amount payable % of claim % of claim % of claim % of claim With a minimum of R R R R
OR a basic amount of
R R R R
Copyright © Santam Ltd. 2007 33 Course code: ASSESS123 /Module5
EU Liability:
Limit R R R R
Turnover R R R R
Premium R R R R
Basic first amount payable % of claim % of claim % of claim % of claim With a minimum of R R R R
OR a basic amount of R R R R
USA/Canada Liability: Limit R R R R
Turnover R R R R
Premium R R R R
Basic first amount payable % of claim % of claim % of claim % of claim With a minimum of R R R R
OR a basic amount of R R R R
Legal Defence costs Option
Premium R R R R
Wrongful arrest Option
Premium R R R R
Pharmacies Option
Premium R R R R
No. of pharmacists/assistants
Errors/Omissions Option
Premium R R R R
Hair salon Option
Premium R R R R
Medical treatment Option
Premium R R R R
Number of medical officials
OFFICE USE ONLY
Item Item Item Item Occupation code:
Product code: Defective workmanship code:
EU Product code: USA/Canada Product code:
Excess of loss Bordereau number
Priority R R R R Participating company
Participating policy number Participation R R R R
Clauses applicable (Complete according to inspection report)
Number % Amount Number % Amount Notes:
Copyright © Santam Ltd. 2007 34 Course code: ASSESS123 /Module5
AFDELING 22
ELECTRONIC EQUIPMENT
Policy number and name [for amendment purposes] [Mark applicable choice with a . Areas marked grey MUST ALWAYS be completed]
GENERAL SECTION DETAILS
Highest CPC limit: (exceeding R1 000 included) R……………………………… Premium: R…………………………………… Highest risk item number: ………………………………. Burglary: Premises …………………………………………………….. Limit R………………………………. Premium R……………………………. Premises …………………………………………………….. Limit R………………………………. Premium R ..…………………………. Premises …………………………………………………….. Limit R………………………………. Premium R ..………………………….
ITEM DETAILS SUB SECTION A: MATERIAL DAMAGE
Item Item Item Item
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For an existing policy/item
please indicate:
from: / / / / / / / /
Premises no./address:
Burglary cover B V G B V G B V G B V G
Item description:
Type
Make /Model
Serial number
Sum insured: R R R R
Incompatibility cover Yes No Yes No Yes No Yes No
First amount payable
% of claim 10 % 10 % 10 % 10 %
R250 R250 R250 R250 General - minimum
Burglary - minimum R500 R500 R500 R500
Com
plet
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note
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on it
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Cession/HP
Cession holder:
Cession/HPno:
Expiry date: / / / / / / / /
Survey number:
Survey date: / / / / / / / /
Surveyor:
Burglary Cover B – Limited burglary cover V – Full burglary cover G – No burglary cover
Yes No
Copyright © Santam Ltd. 2007 35 Course code: ASSESS123 /Module5
SUB SECTION B : INCREASED COST OF WORKING
(if applicable)
Item Item Item Item
Material damage item number
Times excess {hrs} {hrs} {hrs} {hrs}
Indemnity period {mths} {mths} {mths} {mths}
Sum insured R R R R
Premium R R R R
Extensions
Telkom access lines Premium
R R R R
Failure of electricity
Premium
R R R R
SUB SECTION B : REINSTATEMENT OF DATA
(if applicable)
Item Item Item Item
Mateial damage item number
Sum insured: R R R R
Premium R R R R
First amount payable
% of loss % % % %
minimum amount R R R R
OFFICE USE ONLY
Item Item Item Item
Equipment type code:
Sum insured group: A B C A B C A B C A B C
HSR: R R R R
EML:
Same risk no:
Slip number
Bordereau number
Total facultative % R R R R
Reinsurer policy number
Reinsurer’s facultative %
Contact person R R R R
SUM INSURED GROUP: A ≤ R100 000 B ≤ R250 000 C ≥ R250 000 Clause applicable (Complete according to inspection report)
Number % Amount Number % Amount
Notes:
Copyright © Santam Ltd. 2007 36 Course code: ASSESS123 /Module5
Motivate your answers with the relevant facts throughout to qualify for the maximum allocation of marks as indicated per question. Task 3 More questions 1. The insured once again confirms that he is contractually bound to provide his clients
with products. Suppose a fire erupts in the workshops which lead to them not being able to continue normal production. Will he enjoy cover for the increased operational costs should he scale his business down and temporarily continue with it from another premises? This will be for the sole purpose of retaining his client-base.
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
2. The insured informs you that he receives 90 % of his timber (raw material) from a
specific supplier. Suppose this supplier’s business burns down or is destroyed by a storm. The insured is worried that he could experience problems with finding another timber supplier in time to continue with normal production. Will he be able to acquire insurance against possible losses in such an event?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
3. The insured is also worried because 70% of all his ready-made products are
purchased/distributed by one specific client. Suppose this client’s premises burns down or is damaged by a storm to the extent that his turnover suffers. Is it possible to acquire insurance for it?
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
____________________________________________________________________________
2
2
2
Copyright © Santam Ltd. 2007 37 Course code: ASSESS123 /Module5
4. From time to time power failures occur in the area where his workshop is located. If it continues for some time, it could have a great impact on his turnover. Do we provide cover for such an event? (Discuss the various options comprehensively.)
______________________________________________________________________________
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5. The insured is, regardless of the answers you have provided, still not sure about the
above-mentioned aspects. He wants to know if he could take out cover for possible penalties due to a breach of contract.
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______________________________________________________________________________
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TOTAL
4
2
12