IIG Insights – Advanced Liability Training
The Insurance Institute of Gauteng (IIG), in proud association with the Gordon Institute of Business Science (GIBS) hosted a premium education event on Advanced P&C Liability at GIBS on 12th November 2018. This in-depth training session was proudly sponsored by Swiss Re and facilitated by leading international expert René Oefeli from the Swiss Re team in Zurich. With a full house in attendance all delegates were highly appreciative of the knowledge and depth of understanding the expert speaker had to share with us all.
The morning session opened with René giving the delegates a brief overview of Casualty vs Liability as well as General Third-Party Liability Cover (GTPL) so that there was a broad understanding of the terms. He then went on to identify the three sources or hazards of risk being; Premises Liability, Operations Liability and Products Liability. Adding to this, he stressed the extreme importance of understanding the three parties involved in a liability policy and what the coverage is, most notably:
- The policy is between the insurer and the policyholder and that’s what we call coverage.
- The liability is between the insured and an injured party/victim.
René went into detail to draw the difference between the parties and to emphasise that there is no legal relationship between the insurer and the injured party apart from a direct right to claim.
Next on the agenda was the introduction of Professional Indemnity Insurance (sometimes called Errors & Omissions Cover). Delegates were made aware of how complex and broad the potential issues can be and why it is important to have protection for errors and omissions arising out of negligent advice/acts provided during their professional services (malpractice).
Delegates were asked to exercise their grey matter by participating in an interactive classroom exercise to understand which professions make sense to have Professional Liability coverage.
The morning session included delegates being introduced to PI cover for Architects & Engineers. René started the discussion with examples of global Disastrous Public Work Projects, Delay in start-up and cost overruns. The importance of knowing the roles players that are involved in a project was also discussed as this assists in understanding the type of work and the key aspects of exposure, be it at design stage, constructions stage or testing stage.
After lunch it was all about Medical Malpractice cover. Delegates gained a good understanding about the definition of Medical Professions Liability and the different forms of liability, i.e. strict liability (no fault) or negligence (fault based). René highlighted the different claims that may emerge from a mature market sector vs immature market sector and the difference in settlement costs depending on the country that the claim is emanating from.
The last session of the day covered Product recall and Product Tampering cover. The agenda for this topic covered the nature and goal of Product Recall Cover, types of Product Recall, difference between a 3rd-Party Recall vs 1st-Party Recall, an overview of the types of Recall Covers, risk assessment and requirements for underwriting product recall insurance as well as the driving factors that have led to an increase in recalls and costs. Several interesting examples where given of recall incidents, especially in the automotive space. The delegates were given and overview of the structure of the policy, type of costs insured and some important policy exclusions to note.
To close the session delegates had to work through a recall case study. This was based on the recall of a specific motor vehicle brand’s airbags which had been produced over the period of one year. The purpose of the case study highlighted the importance of each cost that could be incurred in a recall claim. The day’s session was closed with a brief look into various emerging risks.
Overall, this Insights session provided an enhanced technical knowledge of liability cover that delegates felt they could take back with them to their organisations.
The learnings were invaluable and skills development at this level is priceless – we are extremely proud of the IIG’s affiliation with Swiss Re.
Article written by Daphne Peter – IIG Education Portfolio
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