The paper primarily considers how underwriters at one composite insurance company underwrite Employers' Liability and Public Liability (excluding Products Liability) risks. The extent of cover provided is discussed along with the responsibilities of the policyholders to their employees and third parties. Whilst both types of policy indemnify the company in respect of damages and related costs there are many hidden costs which will be incurred but uninsured, these include interruption to production, unplanned changes to plant, damage to reputation, and loss of market share.
It is essential that each risk is accurately underwritten. The most important underwriting factors are considered. These are extensive and to assist underwriters Sun Alliance International has developed an expert system called Underwriting Advisor (UA). The system has been built to reflect an underwriters thought processes when assessing a risk and produces a suggested premium for the risk in question. The underwriter inputs the information by answering a series of interrelated questions and has the authority to override the suggested premium if deemed necessary for valid underwriting reasons.
Underwriting Advisor is now complete for all Employers' Liability and Public Liability underwriting, it has been accepted by underwriters and is used in an advisory capacity for the underwriting of a large proportion of cases. In addition the system, excluding information which is pertinent only to Sun Alliance International, is for sale and has been sold to two other composite insurers.