IIC Principles and Practice of Insurance C11 Question # 25 Topic 3 Discussion
C11 Exam Topic 3 Question 25 Discussion:
Question #: 25
Topic #: 3
A large commercial brokerage is approached by a new client who owns a spacecraft and wants liability insurance. What solution should the brokerage recommend?
Spacecraft liability is anextremely specialized, high-severity, low-frequency riskrequiring underwriting expertise not found in standard insurers. TheLloyd’s marketis internationally known for insuring unique, complex, and unusual risks—from satellites and spacecraft to aviation and marine exposures. Lloyd’s operates as a marketplace of syndicates, allowing multiple underwriters to participate in a single risk, making it ideal for large and unusual exposures.
A health/life insurer (B) is irrelevant; they do not underwrite commercial liability exposures.
A captive insurer (C) could theoretically insure such a risk but requires the client tocreate and fundtheir own insurance company—impractical unless they are very large and sophisticated.
Government insurers (D) generally insure auto, workers' comp, or agricultural risks—not spacecraft.
Thus the best recommendation isA: Lloyd’s Insurance Market.
Contribute your Thoughts:
Chosen Answer:
This is a voting comment (?). You can switch to a simple comment. It is better to Upvote an existing comment if you don't have anything to add.
Submit