TABLE OF CONTENTS INTRODUCTION 1. CHAPTER ONE - RISK MANAGEMENT 1.1 Overview 4

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1 TABLE OF CONTENTS INTRODUCTION 1 CHAPTER ONE - RISK MANAGEMENT 1.1 Overview Risk Management Defined Why Manage Risk? Who Should Be Responsible for Managing Risk? Risk Management vs. Corporate Governance vs. Compliance Standards, Frameworks and Governance Guidelines Formal Risk Management Standards Other Frameworks / Corporate Governance Guidelines Basel II The COSO Enterprise Risk Framework Implementing Risk Management in the Organisation Determining the Approach Identifying Risks Evaluation Determining the True Cost of Risk Exposures Risk Prioritisation The Risk Register Responding To Identified Risks - Risk Treatment Accepting Risks Avoiding Risks Risk Mitigation and Control Organisational Strategies and Management P ro c e dur e s Human Resource Policies / Strategies Operational Procedures / Controls Risk Financing, Risk Transfer and Risk Retention Self Retention of Risk / Self Insurance Captive Insurance Companies Alternative Risk Transfer / Finite Risk Insurance Government Relief Measurement and Monitoring Control Self Assessments Risk Management Audits Measurement Against Key Performance Indicators (KPI s) Measurement of the Total Cost of Risk (TCOR) 74

2 1.6.5 Post Incident Analysis Board / Executive Reports 75 CHAPTER TWO - THE INSURANCE MARKET 2.1 Market Participants Insurers Unauthorised Foreign Insurers Underwriting Agents Insurance Agents Insurance Brokers Risk Management Consultants Reinsurers Treaty Reinsurance Programmes Facultative Reinsurance Reinsurance Brokers Retrocessionaires Lloyd s - A Unique Market Bermuda Insurance Market Cycles Case Study - The Australian Insurance Market Future Market Cycles Insurer Solvency Regulatory & Supervisory Bodies Rating Agencies Broker Security Committees Insurance Broker / Insurer Selection Timing How Often? Conceptual Report versus Premium Quotations Contents of a Tender Document Terms of Appointment 120 CHAPTER THREEE - INSURANCE OF ASSETS AND CONSEQUENTIAL LOSSES 3.1 Industrial All Risks / Industrial Special Risks Basis of the Cover Wording Pitfalls / Additional Covers Business Interruption / Consequential Loss Issues Calculating an Adequate Sum Insured Strategies to Improve the Results of the Insurance Placement Claims Management Strategies 139

3 3.2 Engineering Basis of the Cover Wording Pitfalls / Additional Covers Calculating an Adequate Sum Insured Strategies to Improve the Results of the Insurance Placement Computer and Electronic Equipment Basis of the Cover Wording Pitfalls / Additional Covers Calculating an Adequate Sum Insured Strategies to Improve the Results of the Insurance Placement Motor Vehicle Basis of the Cover Wording Pitfalls / Additional Covers Premium / Cover Alternatives Strategies to Improve the Results of the Insurance Placement Claims Management Strategies Fidelity Guarantee / Crime Basis of the Cover Wording Pitfalls / Additional Covers Bankers Blanket Bond and Electronic Computer Crime Strategies to Improve the Results of the Insurance Placement Marine Cargo Basis of the Cover Wording Pitfalls / Additional Covers Strategies to Improve the Results of the Insurance Placement Claims Management Strategies Marine General Average - A Simple Explanation 170 CHAPTER FOUR - LIABILITY INSURANCE PLACEMENTS 4.1 Introduction to Liability Exposures Public and Product Liability Basis of the Cover Wording Pitfalls / Additional Covers Calculating an Adequate Sum Insured Excess and Umbrella Liability Strategies to Improve the Results of the Insurance Placement Case Study - New Zealand Accident Compensation Scheme Professional Liability Basis of the Cover Wording Pitfalls / Additional Covers 189

4 4.3.3 Calculating an Adequate Sum Insured Strategies to Improve the Results of the Insurance Placement Claims Management Strategies Directors and Officers Liability - Exposure Overview Basis of the Cover A B and C Coverage Wording Pitfalls / Additional Covers Calculating an Adequate Sum Insured Claims Management Strategies Strategies to Improve the Insurance Placement Risk Management For Directors & Officers Payment of Premium by Directors - Australia Employment Practices Liability (EPL) Basis of the Cover Wording Pitfalls / Additional Covers Superannuation / Pension Fund Trustees Liability Basis of the Cover Wording Pitfalls Statutory Liability Basis of the Cover Prospectus Liability Basis of the Cover Warranty and Indemnity Insurance Basis of the Cover Motor Vehicle Liabilities Summary of Various Arrangements CTP Gap Exposures Overview of CTP Arrangements in the Region Marine Liabilities Carriers Liability Freight Forwarders Liability Stevedores Liability / Terminal Operators Liability Wharfingers Liability Charterers Liability Marina Operators Liability Port and Harbour Authorities Liability 234 CHAPTER FIVE - INSURANCE OF HUMAN RESOURCES 5.1 Workers Compensation 238

5 5.1.1 Differences Between Jurisdictions Coverage Issues Corporate Travel / Personal Accident Basis of the Cover Wording Pitfalls / Additional Covers Calculating an Adequate Sum Insured Keyman Insurance Basis of the cover Taxation Issues 247 CHAPTER SIX - OTHER CLASSES OF INSURANCE 6.1 ecommerce Risks Exposure Overview Some Reasons Why Traditional Insurance Policies Will Not Respond to Emerging Risk Exposures Basis of the Cover Wording Pitfalls / Additional Covers Information Used By Insurers to Assess Your Risks Product Recall / Contaminated Products Insurance Basis of the Cover Kidnap, Ransom and Extortion Basis of the Cover Environmental Impairment Insurance Basis of the Cover Construction Construction All Risks (CAR) CAR Wording Pitfalls / Additional Covers Advance Loss Of Profits ALOP Wording Pitfalls / Additional Covers Project Specific Professional Indemnity Insurance Force Majeure / Liquidated Damages Contractors Plant and Equipment Construction Defects Liability Defamation Trade Credit Political Risks / Expropriation Insurance Bonds Loss of Title Insurance 292

6 6.11 Tax Audit Insurance Contingency Insurance Events Cancellation and Abandonment Prize Indemnity / Performance Bonus Indemnity Film Insurance Terrorism Insurance Australia - Terrorism Insurance Act Austria - Österreichischer Versicherungspool zur Deckung von Terrorrisiken France - Gestion de l Assurance et ed la Reassurance des Risques Attentas et Actes de Terrorism (GAREAT) Germany - Extremus Versicherungs-AG (Extremus) Israel - Property Tax and Compensation Fund (PTCF) Netherlands - Nederlandse Herverzekeringsmaatschappij voor Terrorismeschaden (NHT) South Africa - South African Special Risks Insurance Association (SASRIA) Spain - Consorcio de Compensación de Seguros (CCS) United Kingdom - Pool Re USA - Terrorism Risk Insurance Act (TRIA) and Terrorism Insurance Extension Act (TRIEA) Commercial Terrorism Insurance Coverage 305 CHAPTER SEVEN - INDUSTRY REGULATION 7.1 Overview Duties of an Insurance Broker Government Regulation - Australia Financial Services Reform Act (2001) / Corporations Act (2001) Insurance Contracts Act (1984) Insurance Act Unauthorised Foreign Insurers (UFI s) / Direct Offshore Foreign Insurers (DOFI s) Marine Insurance Act Trade Practices Act Privacy Act Spam Act Government Regulation - Regional Comparison 328 GLOSSARY OF INSURANCE TERMS 341

7 BIBLIOGRAPHY 361 INDEX 371