4. a. Why is arbitration preferable to litigation, from an insurer's point of view? Why is an arbitration clause not found in a liability policy? 5 Marks b. Prosperity Insurance Group has issued a fire insurance policy to an insured, Paper Mills Limited, at a sum insured of $4,000,000. Last night, a fire broke out at Paper Mills, resulting in the loss of its stocks. However, the value at risk determined by the loss adjustor at the time of accident was more than the sum insured at $5,000,000. Calculate the claims payable to Paper Mills respectively under these three clauses: Pro rata average clause in United Kingdom; 85% American term co-insurance; and 90% Australian term pro rata average in regards of following two separate losses? (i) $3,500,000 (ii) $190,000 Show all your calculations. 4. a. Why is arbitration preferable to litigation, from an insurer's point of view? Why is an arbitration clause not found in a liability policy? 5 Marks b. Prosperity Insurance Group has issued a fire insurance policy to an insured, Paper Mills Limited, at a sum insured of $4,000,000. Last night, a fire broke out at Paper Mills, resulting in the loss of its stocks. However, the value at risk determined by the loss adjustor at the time of accident was more than the sum insured at $5,000,000. Calculate the claims payable to Paper Mills respectively under these three clauses: Pro rata average clause in United Kingdom; 85% American term co-insurance; and 90% Australian term pro rata average in regards of following two separate losses? (i) $3,500,000 (ii) $190,000 Show all your calculations