TYPES OF ACCIDENT INSURANCE

The four types of accident insurance covered are stated below:

(a) Insurance of liability. The largest volume of accident business covers this kind of liability. Employer’s liability for accidents at work, liability of the organizers of public functions for accidents occurring to the public in the course of the event, and above all the liability of motor-vehicle owners for accidents involving third parties, are the chief policies offered.

In any contract there are two principals to the contract, who may be termed the First Party and the Second Party. In insurance contracts these are the insured and the insurers. Third Parties are any other persons affected by the contract, for example passengers, pedestrians, cyclists, etc. The Road Traffic Act 1930 of Britain made it compulsory to have Third Party insurance, i.e. for motorists to protect themselves against liability for death of, or bodily injury to, members of the public. Third parties are therefore nearly always covered by the motorist’s insurance policy. In those cases where an uninsured driver or one whose policy is defective because of some breach of ‘utmost good faith ‘ , causes injury, a Central Fund administered by the Motor Insurers ‘ Bureau of Britain now provides compensation. In Britain a driver who has ‘ Fully Comprehensive’ cover will also receive compensation if he is injured, or if his vehicle is damaged. Because of the high degree of risk when young persons are driving, many insurance companies in Britain will not give ‘ Fully Comprehensive’ cover to persons under the age of 21. ( For Malaysian readers, kindly take note that I will be going into further details regarding motor insurance in my future posting at this site).

(b) Insurance of property. Policies of this sort cover a wide range of risks. Many of these risks are covered by the Householders’ Policies discussed under Fire Insurance. Other are the insurance of shop windows, insurance of herds and flocks against disease, insurance against vandalism, etc. Another type of policy is the ‘all-risks’ policy which offers cover against very wide possibilities. In one recent case a family returned home from holiday to find that a group of vandals had moved in during their absence and had completely wrecked their home. Unfortunately this was not included in their householder’s policy, although a separate policy was available for a small extra premium.(For Malaysian readers, kindly take note that some of the insurance coverages that I have mentioned here are only available in Britain. Even though they are not available in our Malaysian insurance market, I will still be going into further details for knowledge purposes).

(c) Personal accident insurance. These policies cover the insured in respect of death, total or partial disablement, loss of limbs, hospital expenses, etc. They may also cover parties or group of people, e.g. club members on an outing, or sport club players who may be hurt. Short term policies cover railway journeys, and may often be purchased from machines in the concourses of airports or at railway terminals in Britain and other parts of the world. The sums covered by these policies are quite considerable, which emphasizes the rarity of aircraft accidents. A Canadian company once ran the slogan ‘When did you last hear of someone getting kicked to death by a donkey?’ It so happened that deaths in aircraft and deaths by donkey kicks had occurred that year in Canada with equal frequency, 59 deaths by each. Accidents are common, but they are not as common as all that.

(c) Insurance of Interest. Very often interested parties in some event may find themselves open to criticism of their actions which may involve financial compensation. There are many examples, for instance a member of a club committee may authorize some payment which is outside the rules. Professional persons may be held liable for incorrect professional advice given to clients. An executor of a will may pay out the moneys involved and then find a genuine beneficiary who demands compensation. All these contingencies can be insured against. The commonest of the Fidelity Guarantees are the Commercial Fidelity Guarantees taken out by firms upon employees. These Fidelity Bonds restore moneys embezzled by the employee; but it should be noted usually the firm is only reimbursed after the employee has been charged in the courts. There has to be a deterrent or this type of crime would increase, and that would be ‘ against public policy’.