8.14.2. Basic rules for insurance of business and financial risks
Insurance of entrepreneurial and financial risks, allowing in a complex to insure the risk of non-fulfillment of financial or commercial obligations under the contract, in domestic practice is carried out on the basis of various options for insurance contracts:
- financial and commercial risks;
- financial risks in case of non-fulfillment (improper performance) of contractual obligations.
Insurance of damages from interruptions in production is most often an option under property insurance contracts for legal entities. Accordingly, the terms of this insurance are discussed in paragraph 8.2.3.
Within the general insurance financial and commercial risks are insured property interests related:
■ with the insured's losses on commercial contracts (transactions) in the event of non-fulfillment or improper performance by the counterparty of obligations to the insured in the manner and terms provided for in the contract, due to:
- non-payment by the counterparty of the goods delivered by the insured, performed by the insured of works, services;
- non-delivery of goods, non-performance of works, services of the counterparty
- the counterparty violates the terms of delivery or payment.
These events can be recognized as insurance only if they occurred as a result:
- bankruptcy of the counterparty;
- the counterparty's occurrence of accidental unforeseen events such as natural disasters, fires, accidents, unlawful acts of third parties, etc.
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- violations by counterparty partners of their obligations directly related to the performance of obligations to the insured.
The insured's losses under commercial contracts include:
- costs already incurred for the performance of direct obligations under the contract (delivery of goods, works, services, transportation costs, etc.);
- the cost of renting premises, equipment, vehicles needed to perform the contract (including taxes and fees);
- interest on the funds raised for the performance of the contract (interest on bank loans);
- loss of profit (loss of profit).
The amount of loss for already committed obligations should not exceed:
- or due to the insured under the contract the amount of payment for the delivered goods, work, service;
- or the amount paid by the insured under the contract for the goods not delivered, uncompleted work, service;
■ with the investor's investments in securities in case of bankruptcy or liquidation of the issuer in court, including:
- non-payment of the face value of the security to the insured by the counterparty
- non-payment of dividends on these investments guaranteed by the issuer (specified in the constituent documents of the issuer or the contract);
■ with deposit contributions of the insured to credit institutions, including the following risks arising from the bankruptcy or liquidation of a bank (other credit institution) in court:
- no return of the deposit amount (deposit);
- failure to pay guaranteed interest on the deposit;
■ with the implementation of leasing agreements with respect to lease payments, including the failure of the lessee to pay lessor to the lessor (insurant) of leasing payments the time and amount due to:
- bankruptcy or liquidation of the lessee in a judicial procedure;
- a break or stoppage of the economic activity of the lessee due to accidental unforeseen events such as natural disasters, fires, man-made accidents, etc.
The insured amount is determined on the basis of the possible amount of losses. It can be cumulative for all insured events or provide limits on the liability of the insurer for one insured event.
Exceptions from the insurance coverage (other than those established by applicable law) are often losses arising from:
- inconsistencies with the terms of contracts;
- restrictions on remittances from countries whose residents are counterparties to the transaction, non-convertibility of currencies;
- terms of debt settlement under government and international agreements;
- cancellation of export, import licenses, embargo;
- exchange rate differences, penalties, fines, penalties and other indirect costs.
It is not customary to insure futures and international currency clearing transactions.
The basic provisions for carrying out insurance of leasing operations are presented in the Federal Law "On financial leasing", however, leasing insurance is not mandatory and can not be imputed by law to either party to the leasing agreement.
The full leasing insurance contract is combined and may include four insurance covers:
■ The risk of loss, destruction, shortage or damage to property (the leased asset) lies with the lessee;
■ business (financial) risks:
- the risk of the seller failing to fulfill his obligations under the contract of sale and purchase of the leased asset, lies on the party to the contract that selected the seller;
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- the risk of non-compliance of the leased asset with the purpose of using this item under a leasing agreement rests with the party to the contract that selected the leasing object;
- the risk of non-fulfillment of obligations under the leasing agreement from both the lessee and the lessor;
■ the risk of the lessee's liability for the violation of the leasing agreement in favor of the lessor;
■ risk of civil liability of the lessee for the performance of obligations arising as a result of causing harm to the life, health or property of others in the process of using leased property (mandatory in the cases specified by law).
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