Frequently Asked Questions

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General Insurance

What do insurance brokers do?

A broker’s job is to help you to identify the risks that you or your business may be exposed to.

The broker will advise you on what insurance’s are available for these risks and will canvas the wholesale business insurance market to obtain the most advantageous terms for these covers providing you with the insurance quotes. The broker will then discuss this with you and when agreed place the cover with the chosen insurer/s and arrange the documentation at the specified insurance rates.

The broker will also help you with general insurance advice and information as required and look after any amendments to the policies that may be required. With any claims, the broker will assist you in formulating the claim and will liaise between you and the insurer to bring the claim to a successful resolution.

How do Insurance Brokers decide what insurance contracts or policies to recommend to their clients?

There are hundreds of companies offering Property & Casualty insurance in Canada. Brokers identify companies in which they have confidence and whom they are able to develop a working relationship.

Their primary goal is to consider product, service and price in order to make the best possible recommendation to their clients so that their clients can make informed decisions about their insurance protection. The recommendation brokers make is based solely on the attributes of the insurance product or service and the needs of their clients.

How can consumers find out how their brokers are compensated?

Member insurance brokers have nothing to hide and we transparently declare how we are compensated.

How much insurance is enough?

The first step in determining the answer to this question is to work with your broker to identify and define the areas of risk for you or your business. The decision then is which risks to retain (i.e., not insure) and which risks to transfer through insurance.

The sums insured should be relevant to the risk, taking special care not to under-insure and be subjected to co-insurance clauses. To choose to take the risk yourself to save money can leave you vulnerable and may severely affect your cash flow or assets. This is where our experience can assist you in making decisions on how much insurance you require to adequately cover your various risks.

What is coinsurance and why is it required in an insurance policy?

It is important to point out that most insurance losses are partial losses. Recognizing this, many insureds would be inclined to purchase amounts of insurance well below the total value of their property-but what they feel would be adequate for their estimate of the size of loss they are likely to incur.

A coinsurance clause in a fire insurance policy obliges the insured to maintain a specified minimum amount of insurance in relation to the value of the property insured. If the insured does not maintain the proper amount of insurance the insured becomes a coinsurer and will have to absorb a portion of the loss which will depend on the limit of insurance that was carried on the property compared the limit that should have been carried on the property. Common coinsurance percentages that are contained in present day insurance policies are 80%, & 90%

What is actual cash value?

Actual cash is the depreciated value of the property after allowing for its physical condition. It is used as a basis for calculating the amount recoverable because it is considered to represent true indemnity

What does Products/Completed Operations mean?

Products/Completed Operations refers to the liability coverage for damages caused by your operation or products after the point at which you no longer have control of them. 

What is Business Interruption/Extra Expense coverage?

Business Interruption/Extra Expense coverage provides coverage for income loss and the expense of establishing a temporary site during repairs as a result of a direct loss to your property.

Your Best Insurance is an Insurance Broker

As a consumer of insurance, it is in your interest to find a suitable P&C broker to handle your business. You have a responsibility to provide them with honest information about yourself and your circumstances, so that they can make a proper assessment of your insurance needs.

To learn more, consult the Consumer’s Guide.

Marine Cargo Insurance

What is Transit insurance?

Transit Insurance covers goods and or merchandise while in ordinary course of transit from one location to another.

What is a bill of lading?

A bill of lading is the most common form of affreightment which serves three purposes: it is the contract of carriage between the shipowner and shipper, outlining the liability of carrier, the shipowner's receipt for the goods; and the document of title to them (as a negotiable document, interest can be assigned to a third party through the bill of lading).

My transit carrier provides insurance, why do I need to buy insurance?

They do not unless you purchase specific cargo insurance from them, in which case the coverage provided is usually insufficient and ends up costing you more. Transportation carriers are not obligated to pay for your losses that occur beyond their control. Also, international law limits the liability of ocean carriers. Air carriers similarly limit their liability and truckers, rail carriers, and warehouse owners limit their liability for loss according to their tariff. Your own transit policy ensures sufficient limits of liability, known coverage conditions and consolidated claims handling. Additionally, your own policy will be a less expensive alternative to transit carrier provided insurance.

What is the difference between inland transit and ocean cargo coverage?

Inland transit covers domestic transits via land conveyances and/or air shipments (domestic vessel transits are usually insured under an Ocean Cargo Policy). Ocean Cargo Insurance provides coverage for International ocean and/or air shipments on a warehouse to warehouse basis (including the land connecting conveyance transits).

What does Warehouse to Warehouse mean?"

Coverage in transit Insurance is often referred to as Warehouse to Warehouse. It is important to note however that coverage is actually determined by the terms of sale used in each transaction (F.O.B., etc.). Coverage is warehouse to warehouse only when the 'Assured' is responsible to provide such coverage based on the sales terms. This coverage attaches at the point at which transit commences, and terminates when the cargo is delivered to the final destination or after a specific period of time, whichever occurs first. Both the attachment and termination points may be far inland, many miles from the ports of loading and discharge.

What is an open marine cargo policy?

An open policy is one which is open until canceled. There is no expiration date, but rather an anniversary date, which is used as a reference point for billing, rate changes, etc.

Why do I need War Risks Insurance?

War Risks Insurance is a separate contract/policy which offers protection against war perils (stray mines and torpedoes, terrorist acts at sea, etc.), while the cargo is at sea. Combined with the Cargo Policy, there is coverage for Missing Vessels in one policy or the other. Consideration for Strikes riots and Civil Commotions ( SR & CC) coverage is included in the War Risks premium. The SR&CC coverage is added on to the Cargo Policy by endorsement.

What is a General Average?

There are three elements required which establish a General Average:

  • A peril to the common venture For example: A storm at sea, which threatens the vessel itself, cargo carried on board (some of which may be yours) as well as the lives of the passengers and crew. Together these constitute the common venture.
  • An extraordinary sacrifice or expenditure to avert the peril. This could involve jettisoning cargo to lighten the vessel, or engagement of a salvage tug to tow the damaged vessel, etc.
  • The successful preservation of the venture. If the vessel is not preserved, you may be presented with a conventional marine claim and not a General Average.

In summary, when the vessel owner declares a general average, the vessel owner and all of the cargo interests will share the expenses associated with the general average on a pro-rata basis. These expenses are covered under your Marine Cargo Policy.

What are the Incoterms?

 Incoterms precisely define the responsibilities of the buyer and the seller and are recognized as the international standard by custom authorities and courts in all the main trading nations. They are standard trade definitions and are issued by the International Chamber of Commerce. Incoterms reduce the risk of misunderstandings and legal disputes. Incoterms also specify the loading and unloading responsibilities of the buyer and seller. There are 13 Incoterms, each denoted by a 3-letter code. The terms are grouped in four categories based on the first letter in the three-letter abbreviation.

  • Under the "E"-term (EXW), the seller only makes the goods available to the buyer at the seller's own premises. It is the only one of that category.
  • Under the "F"-terms (FCA, FAS and FOB), the seller is called upon to deliver the goods to a carrier appointed by the buyer.
  • Under the "C"-terms (CFR, CIF, CPT and CIP), the seller has to contract for carriage, but without assuming the risk of loss or damage to the goods or additional costs due to events occurring after shipment or dispatch.
  • Under the "D"-terms (DAF, DES, DEQ, DDU and DDP), the seller has to bear all costs and risks needed to bring the goods to the place of destination.

My goods are not at risk so why should I get marine insurance?

It is possible that your goods may be less prone to loss or damage than others, but you still run the risk of a ship sinking, a plane crashing, or some other catastrophic event. It is important to keep in mind that a ship sinks every single day according to maritime statistics. In addition, you are vulnerable to General Average losses. A recent study concluded that a shipper will be involved in a General Average incident once every eight years. This could potentially lead to a business ending situation without a cargo insurance policy.

What is a marine cargo insurance buyer’s contingency policy?

When the terms of sale include insurance coverage up to the title transfer of goods, the buyer may purchase additional insurance from an insurance provider known as a contingency policy. A contingency policy will provide insurance coverage for the goods once the title has transferred and the goods are no longer covered under the seller’s insurance policy. Should the goods be damaged upon arrival to the buyer and the title has transferred, the policy would pay the damage and the buyer’s insurance company would subrogate against the seller’s insurance.

What is the Lloyd’s of London marine cargo insurance market?

Serving over 200 countries and territories, Lloyd’s of London is known as the premier marine, truck, rail and air cargo insurer in the World. Often misunderstood, Lloyd’s is not an insurance company but is a society of members who underwrite in syndicates on behalf of investment institutions, specialist investors, international insurance companies and individuals.

How do I get a quotation for an all-risk cargo insurance policy?

 2 - marine cargIt’s simple! You only need to fill out a quote application. You can do so online or call us and we will walk you through the application over the phone. Once we have a completed application, it only takes 2-3 business days for us to respond with a quote.