Page 179 - Liability Insurance IC74

Guide for Liability Insurance

(i) for tax, fines, penalties, punitive or exemplary or
multiple damages or any claim deemed un-insurable
under law.

(j) based upon any failure or omission on part of any
Director or Officer to effects and maintain insurance
on behalf of the Company.

(k) based upon actual or alleged label, slander,
infringement of copyrights and infringement of
patents. .

(l) directly, resulting from goods or products
manufactured or sold or supplied by the company.

Q7. (a) Explain how a Stop loss and Excess loss Treaty
operates.

Ans. Ref Q 9(b) of May 2008
Stop Loss treaty is a variation of the excess of loss
treaty. The treaty operates in respect of the annual loss
ratio incurred and not in respect of any fixed amount of
the underlying retention.

The treaty is arranged to cover, say, 80% a percentage
of all losses in excess of a loss ratio, of say, 90% up to
and including a loss ratio of say 120%. The reinsurer's
liability arises when the loss ratio exceeds the agreed
percentage. It is usual to limit the reinsurer's liability to

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