CHAPTER 6

GEOGRAPHICAL
AND
OCCUPATIONAL
RISK

PREPARED BY:

SITI NURHAFIZAH ADAM SUBOH

RISKS ASSOCIATED WITH
CLIMATE/ AREA

Climatic risks is less important because of great advances

in tropical medicine, public health, speed of transport, the
goodwill of populations and the technique of living in the
tropics have minimized these risks.

Various part of the world produce political instability from

time to time.

When a proposer is going to such an area it may be

possible to charge extra premium calculated at the
commencement of the policy to cover the risk for the
whole duration.
 OCCUPATION

Extra risk arising from a fatal accident

Extra risk arising from disease

contracted in the course of
employment

Extra risk arise of engaging in

dangerous pastimes or other pursuits
SERVICE RISKS

1. Submarines
2. Service aviation in Great Britain
3. Royal Malaysian Air Force
4. Flying in the army and navy
 CIVIL AVIATION

– Passengers on recognized air routes are not required to pay

extra premium.
– Commercial pilots and other air crew are charged a small extra
premium limited to 7 or 10 years.
– Those engaged in aviation as Aviation Club members and those
engaged in gliding and parachuting are charged extra depending
on the number of flying hours per annum
 MERCHANTILE MARINE

– Risks associated with inaccessibility in cases of injury or sickness.

– Some offices charge extras for tankers in view of the fire and explosion
risks, but some will charge no extra for larger tankers.
– Most offices charge extras for deep sea trawler men who are likely to be
away from port for long periods
– Lifeboat men require a similar extra. However a few office might feel that
their number is small and they are performing a public service of high
quality and thus no extra.
DEEP SEA TRAWLER

LIFEBOAT MEN

TANKER SHIP
 RISKS ASSOCIATED WITH
SMOKING AND ALCOHOL

Although a
Proposer whose Heavy
Adverse effect of heavy smoker
cigarette consumption of
heavy smoking or may be fit and
consumption is alcohol has an
drinking on healthy, the
high must pay adverse effect on
general health underwriter
an extra health and
and longevity must look
premium mortality
ahead.
Heavy consumption of alcohol has an adverse effect on
health and mortality.
 THE LIQUOR TRADE

The history of life assurance shows a remarkable unanimity over the need to charge
extras amongst this group of occupations.
Some office will not impose an extra if the case is entirely featureless one, but others
still charge a moderate extra. For example: Bar employees, wine stewards, wine
waiter, publicans and innkeepers who serving drinks occasionally will be charged
lower than who is serving drinks regularly.
When a proposal is received on the life of anyone connected with the liquor trade, the
office requires him to give full details of his duties so that extra risk can be assessed
accurately.
People who work as part of management and not involve in serving the liquor will not
need to pay an extra.
 OTHER OCCUPATIONAL
HAZARDS

1. Occupations with increased tendency to accident

a) Builders, slaters, scaffolders, steel erectors and window cleaners
b) Crop sprayers
c) Demolition contractors and quarrymen
d) Divers
e) Electric linesmen
f) Explosives manufacturers
g) Jockeys
h) Mining engineers
i) Motor and motorcycle racing
j) Oil rigs
k) Professional boxers and wrestlers
l) Steeplejacks
m) Underground coal miners
n) Workers with radioactive materials and x-ray apparatus
 Builders, slaters, scaffolders, steel
erectors and window cleaners
• No extra premium for ordinary
dwelling house.
• Low extra premium if working at
height of 60 feet or more.
• Treat each case based on merit
(safety precautions taken,
amount of work done before
flooring installed) Slaters Scaffolders

Builders
Steel erectors Window cleaners
 Crop sprayers

• Two hazards : nature

of chemicals used
and the method of
spraying
• No extra premium for
spraying from the
ground
• High extra premium
for spraying from
aircraft flying at low
altitudes because it is
dangerous
 Demolition contractors and
quarrymen

• Low extra
premium if no
explosives used
• Moderate extra
premium if
explosive used
• Full details of
nature of work
essential
• Low or high extra for Divers
professional divers
who engages in deep
sea diving
• Low extra if only
dock diving involved
• High extra for salvage
workers
• Low extra for
amateurs because
they spend less time
diving
• No extra for skin
diving up to 100 feet
 Electric linesmen

• Low extra premium if working at heights or with high

powered cables above 60 feet
 Explosives manufacturers

• Moderate
extra is
required for all
workers at the
plant, such as
chemists and
clerical staff
• Standard rates
or a light extra Jockeys
for flat racing
• Moderate or
high extra for
steeple racing
• Risk of fatal
accident
• Health hazard
due to drug
taking or too
rigid a diet to
keep down
weight
• Standard
Mining engineers
rate or low
extra if
working
underground
• Depends on
the nature of
duties and
the amount
of time
spent
underground
 Motor and motorcycle racing
• Standard rate to amateurs engaged in go-cart racing, motor rallies,
motor-cross, and auto-cross
• Low extra for motorcycle scrambling, hill climbing and stock car racing
• High extra or decline for professional motor racing
• Moderate extra for speedway riding
• A policy subject to an exclusion clause
 Oil rigs
• Depends on area, the time spent there, the nature of duties and method of
transportation
• Treat each case on its merits
• Low extra for technician
• Moderate extra for manual workers
• High extra for divers, particularly if using explosives
 Professional boxers and
wrestlers
• Risk of injury or permanent impairment of health following concussion including
possible blindness
• High extra is required
• Many office would decline professionals
• Require a full medical evidence
• Amateurs would be treated on their merits and some could be taken at ordinary
rates

Professional boxer Amateur Professional wrestler

Mike Tyson Hulk Hogan
 Steeplejacks
• Moderate to high extra if working at heights above 60
feet
• Depends on the time spent and degree of safety measure
 Underground coal miners
• Risk of chest disease (pneumoconiosis) and risk of accident
• Low extra is required if at least 50% of working time is
spent underground
• Otherwise no extra premium charged
 Workers with radioactive materials
and x-ray apparatus
• Extra risk of explosion
• Over exposure to gamma rays resulting in increased liability to leukemia
• Low to high extra depending on the full circumstances
• Not charge personnel working in establishments control by the Atomic
Energy Authority
2. Occupations with added liability to disease

• Occupations involving a great heat and dust apt to

cause pulmonary tuberculosis and this disease
occurs to a lesser as printers, tailors and boot
makers
• Noise affect furnace men, stokers, riveters, iron
workers and the like, causing nervous affection
and strain generally
• Arsenic, mercury and lead are poisonous chemical
used in few industries
Bootmakers

Printers

Tailors
Furnace men Stokers

Riveters Iron workers

 Eczema

Acrodynia (Pink Disease)

LEAD POISONING
3. Atomic energy

• The use of radioactive isotopes in industry is

widespread
• Subject to the provisions of the Factory Acts and
special health and safety regulations are
enforced
• The position is carefully watched by the
authorities
• There is a negligible danger from the life
assurance point of view unless duties include
work on military weapons or other explosives
Radioactive isotopes
industry
 PURSUITS/ HOBBY

If a proposer participates in a hazardous pursuit as a member

of a club ( e.g. mountaineering, sub-aqua diving, pot-holing),
the premium is usually lower than for others

In the event of accident, Club members must

club member at hand to adhere to a code of
summon aid and to assist conduct and safety
in rescue operations measures are enforced
 Mountaineering
• No extra is normally charged but care is required
when there are special risks
• Extra would be required for mountaineering abroad
other than normal
 Potholing
• Moderate extra
might be
required by
some office
• Small extra might
be imposed if it is
only carried out
on club outings
under
supervision and
in accordance
with club rules
regarding safety
 POWER BOAT RACING

• Slightly high premium will be charged.

 Yachting
• No extra is
required for
coastal water
• Light extra
may be
required for
ocean going
yachting
(competitive)
 MORAL HAZARDS

 Moral hazard arises where it is within the power of the assured to

increase the risk
 Moral hazard is less important in life assurance compared to others
classes of insurance.
 Suicide case- office has the protection of suicide clause, if included in the
policy
 Office must make careful enquiries before accepting a proposal for large
amount not commensurate with the financial position of the person desiring
to affect the assurance
 Some occupations might suggest the existence of moral hazards;
occupation itself presents no risk, but the environment often leads to bad
habits, such as heavy smoking and drinking.