Endorsements - Third Party Liability (General)¶

Overview¶

Based on 1,714 policies from Premia UAT database for product 5010.

Common Endorsement Types in UAE¶

Based on UAE insurance market practices for General Third Party Liability policies, the most common mid-term changes include:

1. Increase Liability Limit¶

Most common for growing businesses: - Increase from AED 1M to AED 5M or higher - Meet client/contract requirements - Align with increased business turnover

Premium Impact: Additional premium calculated on increased limit

2. Add Coverage Extensions¶

Extend beyond basic TPL coverage: - Add Product Liability coverage - Add Employer's Liability extension (Common Law/Sharia Law) - Add Pollution Liability (Sudden & Accidental) - Add Comprehensive General Liability (CGL)

Premium Impact: Additional premium for each extension

3. Business Activity Addition¶

When expanding business operations: - Add new product lines - Add new service activities - Change business classification

Premium Impact: Rate re-classification and premium adjustment

4. Geographic Territory Extension¶

Expanding coverage area: - Extend from UAE only to GCC region - Add worldwide coverage (excluding USA/Canada) - Add specific countries

Premium Impact: Additional premium based on territory risk

5. Change Policy Details¶

Administrative changes: - Company name change - Business address relocation - Trade license updates

Premium Impact: Usually no premium impact

Cancellation Rules¶

For General TPL policies:

Full Cancellation¶

Allowed when: - Business permanently ceased - Coverage transferred to another insurer - Mutual agreement

Refund Calculation: - Short period rates typically apply - OR pro-rata if configured in system - Minimum earned premium retained

Partial Cancellation¶

Allowed when: - Specific business activities ceased - Certain locations closed - Coverage limits reduced

Refund Calculation: - Pro-rata for remaining period - Based on reduced exposure

Premium Adjustment Logic¶

Increase in Sum Insured¶

Additional Premium = (New SI - Old SI) × Rate × (Days Remaining / 365)

Decrease in Sum Insured¶

Refund Premium = (Old SI - New SI) × Rate × (Days Remaining / 365)

Coverage Addition¶

Additional Premium = Coverage Premium × (Days Remaining / 365)

Rate Change (Activity Change)¶

Adjustment = (New Premium - Old Premium) × (Days Remaining / 365)

Database Structure¶

Endorsement Tables¶

PGIT_ENDT_REASON - Endorsement master
PGIT_POL_ENDORSEMENT - Endorsement details
PGIT_POL_RISK_ADDL_INFO - Updated business data

Common Endorsement Fields¶

ER_TYPE - Endorsement type code
ER_REASON - Reason description
ER_FM_DT - Effective date
ER_PREM_ADJ - Premium adjustment amount
ER_SI_ADJ - Sum insured adjustment

Validation Rules¶

When processing TPL endorsements:

Sum Insured Changes
Verify business justification
Ensure reasonable for business size
Check against turnover
Activity Changes
Validate new activity is acceptable
Recalculate risk classification
May require underwriting approval
Coverage Changes
Ensure compatible with base policy
Check regulatory compliance
Validate coverage combinations
Premium Adjustments
Minimum earned premium rules
Pro-rata vs short-rate application
Additional premium collection process

PL/SQL Packages¶

Endorsement processing typically uses: - PGIPK_ENDORSEMENT - Main endorsement package - PGIPK_ENDT_CANCEL - Cancellation logic - PGIPK_CALC_PREMIUM_* - Premium recalculation - AIGPK_VAL_* - Validation packages

Integration Considerations¶

When implementing TPL endorsements:

Business Validation
Verify trade license still valid
Confirm business still operational
Check for material changes
Premium Calculation
Recalculate based on changes
Apply pro-rata or short-rate
Handle additional premium collection
Documentation
Generate endorsement certificate
Update policy schedule
Send to insured and broker
Underwriting Rules
Material changes may need approval
Increased limits may need review
New activities need assessment

Common Endorsement Scenarios¶

Scenario 1: Business Expansion¶

Change: Increased turnover, need higher SI
Process: Increase SI from AED 2M to AED 5M
Calculation: (AED 3M × 0.15%) × (180/365) = AED 2,219
Result: Additional premium collected

Scenario 2: Activity Addition¶

Change: Add new product line
Process: Reassess risk, may change rate
Calculation: Recalculate full premium, apply pro-rata
Result: Premium adjustment (increase or decrease)

Scenario 3: Policy Cancellation¶

Change: Business closed
Process: Calculate earned premium (short-rate)
Calculation: Premium × Short Rate % for period used
Result: Refund remaining premium

Data Limitations¶

Note: The current dataset shows 0 endorsements for General TPL product 5010. This analysis is based on: - Standard insurance practices - Premia system structure - Comparable product patterns - Database schema analysis

For actual endorsement frequencies and types, additional extraction from PGIT_ENDT_REASON table would be needed.

Data Source: Analysis of 1,714 General TPL policies (product 5010) from Premia UAT. Endorsement section based on system structure and standard practices due to lack of endorsement records in current dataset.