Wouldn’t it be nice if it were as simple as saying “Rain, rain go away, come again another day” and the weather Gods heeded? ……well, though the wish is not entirely fulfilled, now at least the damage caused by the rains or any other adverse weather conditions could be insured against. That’s what is called weather insurance.
Standard property insurance typically covers income losses only when they result from direct physical damage to insured property by a covered peril. Weather insurance fills a gap by providing coverage when weather causes a loss in income or increase in expenses, but with no attendant physical damage.
Once thought of as solely for outdoor events, weather insurance now is used by every type of business – power generating units, manufacturers, retailers, construction and most other industries to minimize the financial impact of weather on their operations. The entertainment industry is still the most frequent purchaser of weather insurance, since fair, festival and concert organizers/ promoters have a limited opportunity for their events and need protection against the most uncontrollable aspect, the weather.
World over, terrorist activities have been increasing substantially over the last few years. Kidnapping for ransom money is also on the upswing. Whilst certain countries are more notorious for their criminal and terrorist activity, today no part of the world is immune from this threat. Kidnap, Extortion and Detention are real dangers for companies today. They are, however, often overlooked by managements on the grounds that “it won’t ever happen to us”, but the damage this can inflict on a business can be very severe - as the annual roll call of corporate and individual victims around the world testifies.
While no insurance cover can ease the emotional and physical pain, Kidnap & Ransom cover can help ease the financial burden and resolve issues smoothly. Kidnap and Ransom insurance provides assistance to the family and business with regard to independent investigations, negotiations, arrangement and delivery of funds, and numerous other services vital to a safe, speedy and satisfactory resolution.
Extortion Insurance will help you manage the costs associated with an extortion threat against your products, proprietary information, computer system or your people – these costs can be enough to push a small to medium-sized company to its financial limits. Consequently, adequate protection against these events in the form of specialist advice and the safety net of an insurance policy has quickly become essential for vulnerable families and an integral part of every company’s risk management portfolio. The specific policy details may be tailored to meet specific needs. Access to a specialist crisis management company is a key benefit under the policy.
Aviation Insurance was first introduced in the early years of the 20th Century. It is believed that the first aviation polices were underwritten by the marine insurance Underwriting community.
Aviation insurance primarily covers the “Hull” (body of the aircraft), passenger legal liability and third party loss cover. Policy price is dependent upon a large number of variables - Aircraft value, aircraft age, aircraft type, pilot experience, operational territory, intended use and liability limit will all be considered when an underwriter sets a price.
The total premium is always made up of two primary components: the hull premium and the liability premium. Aviation insurance is mandatory, and without insurance no aircraft will ever take off. Most airlines arrange “fleet policies” to cover all aircraft they own or operate.
With the entry of several low cost airlines along with fleet expansions by existing ones and increasing corporate aircraft ownership, the Indian aviation insurance market is all set to take off in a big way.
With the growing interest of FII’s in domestic equity market, several companies going for public issues are opting for a new insurance cover called Public Offerings of Securities Insurance (POSI), which would serve as a safeguard against any legal suit for wrong information in the public offer documents.
The POSI policy is a multi-year “transaction specific” policy. The exposures for the Directors and Officers as well as the Company are extremely large. Therefore a “stand – alone “policy is advisable to ensure that it is ring fenced from the insured’s ongoing Directors and Officers policy. If a company or its directors provide wrong information in the offer documents, the shareholders can file legal suits. Insurance would cover the legal costs incurred in defending civil and criminal proceedings relating to prospectus liability.
The companies will also purchase this cover to protect the proceeds of the float / IPO. The premiums can be capitalised and deducted from the float proceeds and therefore are a cost to the actual offering.