In our daily study, work and life, we often come into contact with papers. By writing papers, we can cultivate our independent thinking and innovative ability. How to write a paper to avoid stepping on thunder? The following is my paper on the dilemma and coping strategies of domestic business interruption insurance, which is for reference only and I hope it will help you.
abstract:
It has always been controversial whether an enterprise that has purchased business interruption insurance can get compensation from the insurance company after business interruption occurs in the course of business operation. This paper analyzes the insurance liability of business interruption insurance and the effectiveness of contract terms, aiming at providing suggestions for the settlement of business interruption insurance.
Key words:
Business interruption insurance; Insurance liability; Claim settlement;
Introduction:
Risks are everywhere. After business interruption losses caused by various risks occur, some enterprises that have purchased business interruption insurance will claim compensation from insurance companies. Whether the insurance company can settle claims is always our concern. By consulting the relevant literature, there is little research on business interruption insurance claims. Professor Su Fang analyzes the insurance liability of business interruption insurance and the insurance coverage rate in China, compares the claims of business interruption insurance with other insurance products, and expounds the claims of business interruption insurance. In this paper, the insurance liability of business interruption insurance and the effectiveness of insurance contract terms are deeply analyzed.
I. Understanding Business Interruption Insurance
Business interruption insurance was originally called loss of profits insurance, which is a kind of property insurance to protect the loss of profits of enterprises. After an enterprise purchases insurance products, it may claim the loss of profits from the insurance company if the material property is damaged due to the insured risk, and the enterprise stops its business and suffers loss of profits [1]. At the end of 2009, after the new Insurance Law was formally implemented, the basic clauses of most insurance products were revised at the request of the former CIRC and industry associations. After this revision, China's loss of profits insurance has a new name, namely business interruption insurance.
According to the classification of the subject matter of insurance, business interruption insurance belongs to property insurance, which has obvious subordination, that is, the insurance liability of business interruption insurance is limited to material property insurance [2]. However, business interruption insurance, as an independent insurance, has its own characteristics and is obviously different from material property insurance, which is mainly reflected in insurance liability and insurance subject matter. First of all, from their insurance liability analysis, material property insurance bears direct losses, and business interruption insurance bears profit losses. Of course, the loss of profit here refers to the loss of gross profit caused by the loss of material property. Secondly, judging from the subject matter they underwrite, the subject matter of business interruption insurance is intangible property, while the subject matter of narrow property insurance is tangible property. If tangible property suffers losses, it is easier for insurance companies to determine the size of their losses, while the subject matter of business interruption insurance is intangible "interests", so it is relatively difficult to confirm their losses and the professional requirements for compensation processing are higher [3].
Second, business interruption insurance claims analysis
There are many factors that affect business interruption insurance claims, such as whether the insurance accident belongs to insurance liability, whether it belongs to the scope of liability exemption, and whether the relevant contract terms are valid. The following is an analysis from two aspects: insurance liability and the effectiveness of contract terms.
(A) Analysis of insurance liability of business interruption insurance
1. Insurance liability of business interruption insurance
The business interruption insurance clause clearly stipulates the insurance liability as follows: the insured suspends business due to material and property losses, resulting in the decrease of the insured's turnover and the loss of business profits, and the insurance company shall be liable for compensation. Among them, the material insurance loss is the cause, the gross profit loss is the result, and the business interruption of the insured is the causal relationship. As the cause of business interruption insurance liability, the meaning of "material insurance loss" should be found in the main insurance clause of the material loss insurance contract. According to the terms of the contract, we can analyze:
1. The risks involved in the material loss insurance contract in the terms of the business interruption insurance contract include but are not limited to basic property insurance, comprehensive property insurance, property all risks and other types of insurance;
Second, natural disasters or accidents agreed in the main insurance clauses of material property are risks covered by the terms of the business interruption insurance contract;
III. The material property loss in the terms of the business interruption insurance contract does not include the indirect loss of the subject matter insured, but the direct material loss.
The loss of material property insurance refers to the direct loss of the subject matter insured. Specifically, the existence of material property loss insurance depends on the combination of the risks (natural disasters or accidents) covered by the main insurance of material property and the direct losses of the subject matter insured:
(1) No underwriting risk occurs, no matter whether there is direct loss of the subject matter insured, it does not belong to insurance liability, and there is no material insurance loss;
(2) There is insurance risk, and there is no direct loss of the subject matter insured, which does not belong to insurance liability, and there is no loss of the insured material;
(3) The subject matter insured has both insurance risks and direct losses. The losses are directly caused by the risks insured by material property insurance, so it is insurance liability, and the loss party of material insurance exists.
Therefore, the material insurance loss agreed in the business interruption insurance clause can only exist if there is a causal relationship between the natural disaster or accident, the direct loss of the insured object and the former two, and all three are indispensable. The logical relationship is as follows:
2. Insurance liability requirements for business interruption insurance
The establishment of any insurance liability must have a cause, a result and a causal relationship between the cause and the result, all of which are indispensable, and so is the insurance liability of business interruption insurance. As mentioned above, the insurance liability of business interruption insurance is established because of the loss of material insurance, the loss of gross profit is the result, and the business interruption of the insured is causal. The logical relationship is as follows:
Combining the above relations, there are:
To sum up, whether an insurance company claims for business interruption insurance must first make clear whether it belongs to the insurance liability of business interruption insurance, that is, analyze the following three questions: first, whether the risk leading to business interruption is the risk covered by the business interruption insurance contract; Second, whether there are direct material and property losses; Third, whether there is a direct causal relationship between the loss of material property and the risk. Only when the insured risk leads to direct material property losses can it be regarded as the insurance liability of business interruption insurance, and the insurance company can bear the corresponding compensation liability for the losses.
(B) Analysis of the validity of business interruption insurance contract terms
Whether the insurance company bears the corresponding insurance responsibility for the business interruption insurance purchased by customers and whether it compensates the corresponding losses depends on whether the contract terms are valid. In the judicial practice of insurance, whether the business interruption insurance clause is effective should be judged in combination with the relevant provisions of the Insurance Law and the Contract Law.
1. Provisions on the effectiveness of clauses in the insurance law
According to Article 17 of the Insurance Law, when concluding a contract, the insurer shall make a prompt on the application form, insurance policy or other insurance documents that can attract the attention of the insured, and make a clear explanation to the insured in written or oral form. If there is no prompt or clear explanation, this clause will not take effect [4]. However, for the understanding and application of this article, we should conduct in-depth analysis. First of all, from the specific provisions of Article 17 of the Insurance Law, it is only emphasized that the standard clauses for exempting the insurer from insurance liability need to be prompted and clearly stated, otherwise it will be invalid. For other insurance liability clauses, the insurer has no special legal obligation to prompt and clearly explain. Secondly, only on the premise that the insurer has insurance liability can we discuss whether the insurer's liability should be exempted. On the basis of the insurer's liability for compensation insurance, the clauses that exclude some risks and losses are clauses that exempt the insurer from liability. In other words, the insurance liability must come first, so there is no exemption. Therefore, the clause exempting the insurer from insurance liability cannot be equated with the insurance liability clause. Based on the above analysis, among the insurance contract clauses, the clause determining the scope of insurance liability does not belong to the insurer's liability exemption clause, so Article 17 of the Insurance Law cannot be applied. For example, Article 3 of the business interruption insurance clause is a clause that determines the scope of the insurer's liability, and the insurer has no legal obligation to make a special prompt and clear explanation for this clause, because it is not a standard clause that exempts the insurer from insurance liability, it is legal and effective, and has legal effect on both parties to the insurance contract. However, the insurer has a legal obligation to give special tips and make clear the clauses exempted from insurance liability in the insurance contract. If this obligation is not fulfilled, the clause will be invalid.
Judicial Interpretation II of Insurance Law has a more explicit agreement on the scope of exemption clauses and the scope of explicit obligations, among which Article 9 stipulates that the scope of exemption clauses includes exemption clauses, deductibles, proportional claims or payments, and other clauses that exempt or reduce the insurer's liability. It can be seen that the scope of the insurer's explicit obligation has expanded from the "clauses exempting the insurer from liability" stipulated in the Insurance Law to the "clauses exempting or reducing the insurer's liability". At the same time, Article 10 of Judicial Interpretation II of Insurance Law stipulates that the insurer takes the prohibitive provisions in laws and administrative regulations as the exemption reasons for the exemption clauses of insurance contracts. After the insurer prompts this clause, it is deemed that the insurer has fulfilled the obligation of clear explanation. Therefore, Article 17 of the business interruption insurance clause stipulates that if the insured fails to fulfill the obligation of truthful disclosure intentionally or due to gross negligence, which is enough to affect the insurer's determination of whether to underwrite or increase the premium, the insurer has the right to terminate the insurance contract. The relevant provisions of this article on the insurer's right to terminate the contract cannot be regarded as a clause to exempt or reduce the insurer's liability, and the insurer has not clearly stated its obligations to this clause, but should be regarded as an effective clause.
2. Provisions on the validity of clauses in the contract law
Insurance contract is also a civil contract concluded between equal subjects. In the process of contract performance, in addition to complying with the provisions of the Insurance Law, the basic principles of the Contract Law should be followed where there is no special agreement or unclear agreement in the Insurance Law [5]. According to the validity of standard contracts stipulated in Articles 39 and 40 of the Contract Law and Interpretation II of the Contract Law, there are standard clauses in the terms of insurance contracts, that is, they are drawn up in advance for repeated use, and the opinions of the opposite party of the contract are not consulted when concluding the contract. Therefore, the validity of standard clauses in insurance contracts is bound by Articles 39 and 40 of the Contract Law and Interpretation II of the Contract Law. The difference between the contract law and the insurance law is that the contract law is applicable to all standard clauses, including the clauses determining the insurer's liability. If the standard clauses in an insurance contract comply with Articles 39 and 40 of the Contract Law and Interpretation II of the Contract Law, the standard clauses are likely to be deemed invalid, which will greatly affect insurance claims.
The contract part of the civil code, which will come into effect on 202 1, 1, has revised the contract law, especially the provisions on the validity of standard contract terms. On the basis of Article 39 of the Contract Law, the second paragraph of Article 496 of the Civil Code further stipulates that "if the party providing the standard terms fails to perform the obligation of prompting or explaining, so that the other party fails to pay attention to or understand the terms that are of great interest to it, the other party may claim that the terms will not become the content of the contract" [6]. When the applicant buys insurance, the insurer does not meet this article in the Civil Code, and the applicant can claim that there is no such article in the contract. The provisions of the Civil Code actually increase the responsibility of one party to the contract who provides standard terms, and its main purpose is to balance the rights and obligations of both parties to the contract. If the party providing the format contract fails to prompt and explain the terms with significant interests, which will inevitably affect the contract interests of the other party, then the other party can claim that the terms are not included in the contract, but on the other hand, compared with the original contract law, the scope of the obligation clause is expanded. At first, this clause refers to the terms that exempt and reduce the responsibility of the format contract provider, while the Civil Code specifically mentions the terms with significant interests to the other party. This change undoubtedly aggravates the scope of the explanation and interpretation obligations of insurance companies as providers of standard contracts and the corresponding burden of proof, especially compared with Article 17 of the Insurance Law and Judicial Interpretation II of the Insurance Law, which has a wider scope and higher requirements.
To sum up, the exemption, liability reduction clauses or clauses with significant interests in business interruption insurance can only be effective for both parties to the contract if the insurer fulfills the obligation of prompt and explanation, and the insurer can refuse to pay compensation according to the exemption clauses. If the insurer fails to fulfill the obligation of prompt and explanation, the exemption clause will be deemed invalid and the insurer cannot be exempted from insurance liability.
Third, business interruption insurance claims coping strategies
The analysis shows that the insurance liability and the validity of contract terms have a far-reaching impact on the claims of business interruption insurance. In the judicial practice of insurance, the validity of contract terms is the focus of dispute between insurer and insured. In the process of claim settlement, the focus of this dispute should be dealt with from the following points.
First of all, to judge whether this clause belongs to the scope of exemption clauses that the insurer has a clear obligation to explain, we should pay special attention to the exemption, liability reduction clauses or clauses with significant interests in business interruption insurance, which belong to the scope of clear obligation to explain.
Secondly, after determining the exemption clause of the insurer's obligation to make clear, we can judge whether the insurer's way of fulfilling the obligation to make clear is in accordance with the law. As long as some exemption clauses in the contract can attract the attention of the insured with words, fonts, symbols or other obvious signs, and make explanations to the insured that ordinary people can understand, it is considered that the insurer has fulfilled the obligation of clear explanation. If the insurer prompts and explains the concluded insurance contract through the internet or telephone in the form of webpage, audio and video, it is also deemed that the insurer has fulfilled the obligation of clear explanation.
Finally, whether the insurer has corresponding evidence to prove that it has fulfilled its obligation to clearly explain the terms. Judicial Interpretation II of Insurance Law clearly stipulates that the insurer bears the burden of proof for its performance of the obligation of explicit explanation, which is also the key to whether the court can determine the effectiveness of this clause. This requires the insurer to operate legally and legally in the underwriting process, truly explain the exemption clauses that ordinary people can understand in the contract to the insured, and require the insured to sign an "insurer statement" on the insurance application, which will be a strong evidence that the insured has fulfilled the obligation of prompting and explaining. If the insurer has no relevant supporting evidence, it will bear adverse consequences, that is, the exemption clause will be deemed invalid and the insurer cannot refuse to pay.
Four. conclusion
Insurance is of great significance to the stable and healthy development of the country and the happy life of the people. In the process of insurance management, the insurance industry should strengthen the social security responsibility under scientific and reasonable circumstances, operate in compliance with the law, and reduce the disputes of business interruption insurance in the process of insurance claims.
First of all, as far as the scope of insurance liability is concerned, with the increase of risk types, a large number of risks are manifested as intangible losses, and the consequences of losses are quite serious. The ever-changing risks also put forward new requirements for the perfection of business interruption insurance clauses. Based on scientific rationality, insurance companies should solve problems for the society and customers, appropriately expand the insurance liability of business interruption insurance, and fully consider the characteristics of different industries to design targeted and differentiated business interruption insurance clauses.
Secondly, regarding the validity of contract terms, the insurance industry should further improve its service system and operate legally and in compliance. In the underwriting process of business interruption insurance, we should strictly abide by the relevant provisions of insurance law, judicial interpretation and civil code, and fulfill the obligation to prompt and explain the relevant provisions, which will be a powerful measure to reduce the disputes over business interruption insurance claims.
refer to
[1] Xu Changmei. Loss of profit insurance [M]. Shanghai: Fudan University Press, 2007.
[2] Xu Changmei, Shi Yong. On the new loss of profits insurance clause [J]. Shanghai Insurance, 2011(08):15-18.
[3] Sun Jing. Analysis on some problems of loss of profits insurance claim [J]. Shanghai Insurance, 2008 (04):18-20,28.
[4] Feng Ru. On the legal effect of contract format clauses [J]. Communication and Copyright, 2019 (04):182-183.
[5] Yang. The application of contract law in insurance contract [J]. China Insurance, 2003( 10):42-44.
[6] Sean. Legislative research on standard clauses in contract law of Chinese Civil Code [J]. Journal of Sichuan University (Philosophy and Social Sciences Edition), 2019 (01):135-142.
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