Comprehensive Study Material: General Insurance & Property & Casualty (P&C) Insurance
1. GENERAL INSURANCE – AN IN-DEPTH UNDERSTANDING
Definition: General Insurance encompasses all types of insurance other than life insurance. It provides
financial protection against unforeseen losses arising due to damage to property, assets, legal liabilities,
health risks, or other non-life risks.
Key Characteristics: - Short-term in nature (usually annual policies) - Involves indemnification of actual
losses - Wide variety of products across personal, commercial, and industrial lines
Major Classes of General Insurance: - Motor Insurance: Mandatory in most countries; includes Third
Party Liability and Comprehensive policies. - Fire & Property Insurance: Covers buildings, stocks,
machinery against fire and allied perils. - Marine Insurance: Provides cover for cargo, hull, and freight
during sea/air/land transit. - Health Insurance: Reimburses medical costs due to illness or injury. - Liability
Insurance: Protects insured against legal claims by third parties. - Miscellaneous Insurance: Includes
travel, fidelity, personal accident, cyber risk, etc.
Core Principles: 1. Utmost Good Faith (Uberrima Fides): Both insurer and insured must disclose all
material facts truthfully and completely.
1. Insurable Interest: The insured must have a legally recognized financial interest in the subject
matter.
2. Indemnity: Compensation is provided for actual loss only, not for profit or speculative gain.
3. Contribution: If more than one policy covers the same risk, the insurers share the claim
proportionately.
4. Subrogation: Once the claim is paid, the insurer gets the right to recover that amount from third
parties responsible.
5. Proximate Cause: Determines the closest and most effective cause of the loss when multiple causes
are involved.
Functions of General Insurance: - Risk pooling and risk transfer - Financial security to individuals and
businesses - Support for economic development and credit creation - Legal compliance (e.g., motor TPL)
Underwriting Process: - Risk assessment and evaluation - Pricing of risk (rate determination) - Acceptance
or rejection of risk based on appetite - Issuance of policy and documentation
Claims Process Overview: - Notification of loss - Survey and assessment - Documentation and evidence
submission - Claim settlement or repudiation - Subrogation/recovery (if applicable)
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Regulatory Framework: - In Qatar: Regulated by Qatar Central Bank (QCB) - In Pakistan: Governed by SECP
under the Insurance Ordinance 2000 - Requires solvency, reinsurance, and corporate governance
compliance
2. PROPERTY & CASUALTY (P&C) INSURANCE – DEEP DIVE
Definition: P&C Insurance refers to two broad types: - Property Insurance – Covers tangible physical
assets - Casualty Insurance – Covers liability for damages/injury to others
These are essential for individuals and businesses to mitigate physical and financial risks.
A. PROPERTY INSURANCE
What it Covers: - Buildings, contents, machinery, raw materials, stocks, office furniture, etc.
Main Policy Types: - Fire & Allied Perils Policy: Covers fire, lightning, riot, strike, malicious damage,
explosion, storm, flood, etc. - All Risks Policy: Provides comprehensive coverage for accidental losses not
specifically excluded. - Industrial All Risk (IAR): Tailored for large industrial clients; includes fire, burglary,
breakdown, BI, etc. - Household & Office Package Policies: Cover both structure and contents.
Important Clauses & Add-ons: - Reinstatement Clause: Settlement on replacement value instead of
depreciated value. - Average Clause: Applied in case of underinsurance. Claim is proportionately reduced. -
Deductibles/Excess: Fixed amount borne by insured per claim. - Business Interruption (BI): Covers loss of
income during downtime due to insured damage. - Debris Removal, Architect Fees, Escalation Clause,
Earthquake, Terrorism: Common extensions.
B. CASUALTY INSURANCE
Scope: Covers the legal liability of an individual or business for injuries or damage caused to third parties.
Key Policy Types: - Public Liability: Covers legal liability for bodily injury or property damage to the public.
- Product Liability: For manufacturers or sellers against defective products causing harm. - Employer’s
Liability: Covers employer’s legal responsibility towards employees for work-related injury. - Workmen
Compensation: Mandatory statutory cover for employee injuries/death during the course of employment. -
Professional Indemnity (PI): For professionals like consultants, doctors, lawyers, etc. - Directors &
Officers (D&O): Protects directors and executives against lawsuits arising from decisions made in official
capacity.
Claims Management in Casualty: - Legal notices and proceedings - Evidence of negligence or fault - Legal
defense costs - Settlement within policy terms and limits
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3. KEY INSURANCE TERMINOLOGY
• Sum Insured: The maximum amount payable under the policy for any one loss or series of losses.
• Premium: The consideration paid by the insured to the insurer for accepting the risk.
• Exclusion: Specific risks/events not covered under the policy (e.g., war, nuclear risks).
• Deductible: The fixed amount of loss borne by the insured before insurer starts to pay.
• Perils: The actual cause of loss or damage (e.g., fire, theft, earthquake).
• Endorsement: An amendment or addition to the standard policy terms.
• Warranties: Conditions that must be strictly complied with; breach may void claim.
• Reinsurance: Insurance for insurers to protect against large losses.
• Coinsurance: A percentage of the loss shared between insured and insurer after the deductible.
• Limit of Liability: The insurer’s maximum liability under the policy.
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