SABU LAMA

UNIT 5: OTHER PROPERTY INSURANCE

1. AVIATION INSURANCE
Aviation Insurance is a type of insurance policy that provides coverage for risks to
aircraft or airplane. It is designed to protect aircraft owners, operators, passenger and third
parties from financial issues resulting from aviation – related accidents and incidents. It covers a
wide range of risks, including damage to aircraft, body injury to passengers or third party loss of
cargo and liability for damage caused by the air plane to third party property.

Types Of Aviation Insurance

 Plane in ground but not in motion:
This type of insurance covers a plane for damages sustained while it is on the ground but
not in motion. This would include damages from vandalism, hail, theft, lightening,
animal damage, damage from uninsured vehicles, etc.
 Plane in motion but not in flight:
This type of insurance covers damages incurred while Plane is on the ground in motion
but not in flight. This typically includes damages sustained during take off and landing.
 Plane in flight:
This type of insurance covers a plane for damages while pane is in flight. It protects an
insured aircraft damage during all phases of flight operation. It is most expensive type of
insurance.
 Public Liability:
This type of insurance covers a plane for damages that occurs to third party entities and
property. It covers aircraft owners for damage that their aircraft does to third party
property. Risks are not covered other than air plane and passenger.
 Passenger Liability:
Passenger Liability policy covers incidents resulting from the transportation of
passengers by airplane. It is compulsory for the most of the countries for big size air
 plane and jet panes only. Only passenger’s risks are covered by this insurance policy
including passenger’s death, their baggage, medical expenses, etc.

 Combined Single Unit:

It is combination of both public and passenger liability insurance. It covers risks of all
public arising due to loss and damage of plane and passenger liability risk including the
medical expenses. This type of insurance policy provides more flexibility in paying
claims for liability, especially if passenger are injured but little damage is done to third
party property on the ground.

Risks covered and not by Aviation Insurance

Risks covered by Aviation Insurance Risks not covered by Aviation Insurance
Physical damage to the aircraft Act of War
Liability for damage to third party International Acts
Liability for passenger injury or death Wear and Tear
Loss of income or revenue due to aircraft Illegal Activities
damage or loss
Medical expenses

2. MARINE INSURANCE
Marine Insurance is the type of insurance which provides protection against loss and damage
of goods and services over the ship. It covers the marine related risks which includes loss and
damage of ships, cargo, any other means of transport by which goods are transferred or held
between the point of departure and final destination.

Risks covered by Marine Insurance

 Fire
 Damage Of Cargo
 Liability Risk
 Accidents
 Damage due to rain water
 Loss of goods and services due to breakage
 Theft
 Flood, etc.
Types of Marine Insurance
 Voyage Insurance:
It is the type of insurance which provides protection against loss and damage of ship to
the ship owner. It covers only the risk of ship but not the risk of cargo.
 Single Voyage Insurance:
It is the type of insurance which provides protection against loss and damage of Cargo,
the ship and the crew during the duration of departure and arrival. It covers the risk of
ship one by one.
 Fleet Insurance (Multiple Voyage):
It is the type of insurance which provides protection against loss and damage of multiple
ship belonging to one owner. Those ships are insured under the same policy.
 Time Insurance:
It is the type of insurance which provides protection against loss and damage only for the
limited period of time. The time period is specified. Generally, it is valid for a year. After
the specified insurance period ends, the policy expires and becomes void.
 Undervalued Insurance:
The value of cargo and ship is not mentioned in this policy. Reimbursement is done only
after the loss of ship and cargo is inspected and valued.
 Valued Policy:
The value of cargo and ship is mentioned in this policy. The total value of ship including
the construction is to be mentioned.
 Floating Insurance:
A marine insurance policy where only the amount of claim is specified for clients who
undertake frequent trips of cargo transportation prefers floating insurance.
 Cargo With freight Insurance:
 It is the type of insurance which provides protection against loss and damage of goods
and services over the ship with shipping expenses. It covers the risk of loss and damage
of cargo between point of margin and final destination.
 Cargo without freight Insurance:
It is the type of insurance which provides protection against loss and damage of goods
and services over the ship without shipping expenses.
3. ENGINEERING INSURANCE AND CONTRACTOR ALL RISK
It is the type of insurance which provides protection against the risk of material, machine, labor
in construction site. It provides coverage of loss and damage of owner, engineer and contractor
while performing construction related work. In addition, plant, machinery, equipment, labor,
material, body injury and third party liability risk are also covered by this insurance.
Types of Engineering Insurance and Contractor All Risk
 Erection All Risk Insurance:
This type of policy provides coverage to the risk of loss which arises out of erection and
installation of machinery plant and steel structures, including physical damage to the
contract works, equipment and machinery, and liability for third-party bodily injury or
property damage arising out of these operations.
 Machinery Breakdown Insurance:
This type of policy provides coverage for machine used by factories and industries. This
insurance covers accidental breakdown and physical damage of machinery and the cost of
repairs or replacemet of damaged machine part.
 Boiler and Pressure Plant Insurance:
This particular Insurance covers damage for reasons other than by fire, to boilers &
pressure plant, surrounding property, third party legal liability arising out of explosion
and collapse of the boiler/pressure plant during its normal course of working. The impact
of boiler explosion could assume catastrophic proportions.
 Engineering Equipment Insurance:
It is the type of insurance which provides protection against loss and damage of data
storage, loss and damage of equipment and breakdown of equipment.
 Deterioration of Stock Insurance:
 This insurance covers risk of value depreciation of stock. It covers damage to goods
stored in specified cold storage spaces, which occurs as a result of a change in
temperature caused by a breakdown of equipment or accidental damage to it.
 Business Earning Loss Insurance:
It helps to cover the loss of business earning due to loss and damage of owner or
contractor.

 Contractor All Risk:

This type of policy provides coverage for property damage and third-party injury or
damage claims which include improper construction of structures, damage that happens
during a renovation and damage to temporary work erected on-site. Third parties,
including subcontractors, if they get injured while working at the construction site.

4. AGRICULTURE INSURANCE
Agriculture Insurance is the type of insurance which provides protection against loss and
damage of farmer, crop, cattle, animals and livestock due to the perils like flood, landslide,
hailstones, wind storms, revenue loss, fire, etc.
Agriculture sector is the main components of economic development of developing countries
like Nepal. This sector contributes boosting economy in terms of GDP, Employment and food
security, as more than 60% of Nepalese residents choose agriculture as primary source of
income.

Types of Agriculture Insurance

 Indemnity Based Insurance:
It is a type of insurance where the farmer receives compensation based on the actual loss
incurred due to specific perils or events covered by the policy. The indemnity payment is
calculated based on the difference between the expected yield or revenue and actual yield
or revenue obtained due to the occurrence of insured perils.
o Damage Based Insurance:
 It provides coverage against damage caused by specific perils such as fire, flood, hail,
insects, etc. under this type of insurance, famers receive compensation for the actual
physical damage to their crops, regardless of the yield they achieve.
o Yield Based Insurance:
It provides coverage against a reduction in crop yield due to a variety of causes
including weather, events, pests and diseases. The farmer will receive compensation
if the actual yield is lower than expected yield even if the crop was not physically
damaged.

 Index Based Insurance:

It is used to protect against loss due to weather related events such as droughts or floods.
This insurance uses weather data to calculate payouts to farmers based on pre-determined
weather conditions such as rainfall levels or temperature.

5. Travel Insurance
Travel Insurance is a type of insurance that provides coverage for individuals who are travelling
domwstically or internationally. It covers a varity of risks such as:
 Theft, stole, robbery of personal property
 Illness or sickness
 Medical treatment
 Accidents (Death or body injury)
 All living expenses, accommodation, hospitality
Travel Insurance policies can be purchased for a single or multiple trips throughout the year,
and the coverage and cost of policy can vary depending on factors such as length of the
trip.
6. UMBRELLA INSURANCE POLICY
Umbrella Insurance Policy is that type of insurance that covers additional risks to be covered
under property, auto and liability insurance when policy and risk limit exceed.
For example: if you have car insurance with liability limit of Rs. 100000 and you cause an
accident that results in damage that exceed that amount, your umbrella policy would cover the
additional costs.
Difference between Add-on-Covers and Umbrella Insurance Policy
Add-On-Covers Umbrella Insurance Policy
It provides additional coverage for a It provides broader coverage that extends
particular risk that may not be covered by the against unforeseen events and provides extra
basic policy. protection.
Less expensive than umbrella policy because Cost is higher than cost of multiple add-on-
they provide limited coverage cover because it provides comprehensive
coverage

7. Bankers’ Blanket Insurance

It is the type of insurance policy that provides protection against financial loss to the bank.

Risk Covered by Bankers’ Blanket Insurance

 Cash In Vault
 Cash In Transit
 Loss and Damage Of ATMs
 Equipment and Property of Bank
 Cyber Crime
 Banking Fraud (Unintentional)
 Issuance of Securities and Debenture Loss
 Financial Loss due to Untentional human error and technical error

Exclusions
 Unlawful act of Director.
 Negligence and Intentional Act of Employees
 Liability Risk
 Act Of God and Natural Disasters.