Chartered Insurance Institute (CII) Qualifications General Insurance Products and Claims Syllabus

In business interruption, define the gross profit on the 'difference' (insurable) basis.

Gross profit = Turnover + closing stock and work in progress − (opening stock and work in progress + uninsured/specified working expenses). It is the amount that must be insured to cover lost profit plus standing charges.

What is the 'material damage proviso' in a business interruption policy?

A condition that BI cover only operates if the property damage causing the interruption is itself insured (and a claim is, or would be, payable) under a material damage policy that is in force.

What is the fundamental difference between liability insurance and property/first-party insurance?

Liability insurance is third-party cover: it indemnifies the insured against legal liability (damages and costs) owed to others. Property insurance is first-party: it indemnifies the insured's own loss.

Distinguish Employers' Liability (EL) from Public Liability (PL) insurance.

EL covers liability for injury/disease to employees arising from work; PL covers liability for injury or property damage to members of the public/third parties. EL is compulsory in the UK; PL is generally not.

What is the compulsory minimum limit of indemnity for Employers' Liability insurance in the UK?

GBP 5 million by statute (Employers' Liability (Compulsory Insurance) Act 1969), though most insurers provide GBP 10 million as standard.

What does Product Liability insurance cover, and how does it differ from Public Liability?

Product liability covers legal liability for injury or damage caused by products supplied/sold by the insured (after they leave the premises); public liability typically covers injury/damage arising from the insured's premises and ongoing operations.

Explain the difference between 'claims-made' and 'losses-occurring' (occurrence) liability policies.

Losses-occurring responds to incidents that occur during the policy period regardless of when claimed; claims-made (used for professional indemnity) responds to claims first made against the insured during the policy period, often subject to a retroactive date.

What is a 'retroactive date' on a professional indemnity (claims-made) policy?

The date before which work or incidents are not covered. Claims arising from acts/omissions before the retroactive date are excluded, even if the claim is made during the current policy period.

In marine insurance, what do the abbreviations Hull, Cargo, Freight and Liability refer to as the four main interests?

Hull = the vessel itself; Cargo = goods carried; Freight = the carrier's earnings/charges for carriage; Liability (e.g., P&I) = legal liabilities to third parties such as collision, pollution and crew.

Under the Marine Insurance Act 1906, what are the three implied warranties relevant to marine policies?

Seaworthiness of the vessel (in voyage policies), legality of the adventure, and (historically) that the vessel will not deviate. Legality is the principal surviving implied warranty under modern law.

In marine insurance, distinguish a 'general average' loss from a 'particular average' loss.

General average is a deliberate sacrifice/expense made for the common safety of the whole venture, shared rateably by all interests; particular average is an accidental partial loss falling only on the particular interest that suffered it.

What does the Institute Cargo Clauses (A), (B), (C) classification denote, and which is the widest?

They are standard sets of cargo cover. ICC (A) is the widest ('all risks'); ICC (B) covers named perils plus some; ICC (C) is the most restricted, covering only major casualty perils such as fire, sinking, stranding and collision.

In aviation insurance, what is the distinction between 'hull' cover and 'spares' cover?

Hull covers physical loss of or damage to the aircraft itself; spares cover insures aircraft spare parts and equipment while in store or in transit, not attached to the aircraft.

What does 'transit' insurance (goods in transit, GIT) cover?

It covers loss of or damage to goods while being carried by road, rail, or other inland transport, on the insured's own vehicles or by carriers/hauliers, typically up to a limit per vehicle/load.

What is a 'packaged' commercial policy (e.g., a shop or office package), and what advantage does it offer?

A pre-bundled policy combining several covers (material damage, BI, money, liability, glass, etc.) tailored to a trade. Advantages: convenience, simpler administration, often lower cost, and reduced risk of gaps between separate policies.

Give two examples of 'specialty' (non-standard) insurance lines outside standard personal/commercial classes.

Examples include: kidnap and ransom, contingency/event cancellation, fine art and specie, cyber, terrorism, trade credit, marine war risks, and political risk. (Any two are acceptable.)

List the typical sequential stages of the general insurance claims process from first notification to settlement.

1) Notification (FNOL), 2) registration and acknowledgement, 3) validation of cover/policy, 4) investigation and assessment (possibly using a loss adjuster), 5) reserving, 6) negotiation/quantum agreement, 7) settlement/payment, 8) recovery/subrogation and file closure.

What does FNOL stand for and why is prompt FNOL important?

First Notification of Loss — the initial report of a claim. Prompt FNOL allows early reserving, evidence preservation, fraud detection, mitigation of the loss, and better customer service.

What is a loss adjuster, and whose interests do they primarily serve?

An independent professional appointed (and paid) by the insurer to investigate larger or complex claims, assess cause, quantify the loss and recommend settlement. They act impartially but are instructed by the insurer.

How does a loss adjuster differ from a loss assessor?

A loss adjuster is appointed and paid by the insurer to investigate the claim; a loss assessor is engaged and paid by the policyholder to prepare and negotiate the claim on the insured's behalf.

What is a claims 'reserve' and why is accurate reserving important?

A reserve is the estimated amount an insurer sets aside to meet the ultimate cost of an outstanding claim (including expenses). Accurate reserving is vital for solvency, pricing, profitability monitoring and regulatory reporting.

Define 'subrogation' and state the principle that underpins it.

Subrogation is the insurer's right, after paying a claim, to step into the insured's shoes and recover the outlay from a responsible third party. It supports the principle of indemnity by preventing the insured from profiting twice.

What is an 'ex gratia' payment in claims handling?

A payment made by the insurer as a goodwill gesture without admitting legal liability under the policy — i.e., it is not strictly payable but is paid to maintain customer relations or avoid dispute.

In claims documentation, what is a 'proof of loss' and what does it typically include?

A formal statement/claim form supporting the loss, typically including a description of the incident, date/cause, items lost or damaged, values claimed, and supporting evidence such as receipts, photographs, police/crime reference and estimates.

Why might an insurer require a 'crime reference number' or police report for a theft or malicious damage claim?

As objective proof that the incident was reported and occurred, to validate the claim, deter and detect fraud, and satisfy a policy condition requiring notification to the police for theft/malicious damage.

What is the legal burden of proof in establishing a claim, and how does it shift to the insurer?

The insured must prove, on the balance of probabilities, that a loss occurred and falls within an insured peril. The burden then shifts to the insurer to prove that an exclusion or condition applies to defeat the claim.

In policy interpretation, what is the 'contra proferentem' rule and when does it apply?

Where a policy term is genuinely ambiguous, it is construed against the party that drafted it (usually the insurer). It applies only as a last resort, after the natural and ordinary meaning of the words has been considered.

Distinguish a 'condition precedent to liability' from a 'bare/mere condition' in a policy.

A condition precedent must be complied with before the insurer is liable; breach can entitle the insurer to refuse the claim. A bare condition's breach gives only a right to damages, not automatic refusal of the claim.

Under the Consumer Insurance (Disclosure and Representations) Act 2012, how are claims affected by a careless (non-deliberate) misrepresentation by a consumer?

The insurer applies a proportionate remedy: if it would have charged more, the claim is reduced proportionately; if it would have applied different terms, those terms apply; if it would have declined cover, it may avoid and refuse the claim (returning premium).

Under FCA rules and the Consumer Duty, what is the core 'good customer outcome' standard expected in claims handling?

Insurers must handle claims promptly and fairly, not unreasonably reject claims, provide clear communication, and deliver good outcomes that avoid foreseeable harm — treating customers fairly throughout, including vulnerable customers, in line with the Consumer Duty.