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Business (LC) > Chapter 15 - Insurance > Flashcards

Chapter 15 - Insurance Flashcards

1
Q

What is risk management?

A

A planned approach used by businesses and households to deal with risks that can affect them. Identify possible risks and calculate the cost of protecting against them

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2
Q

What are 5 ways we can minimize risk?

A
  1. Install security system
  2. Training e.g. cpr training
  3. Appoint a health and safety officer - someone who conducts safety inspections
  4. Health and safety e.g. hard hat for construction workers
  5. Insurance
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3
Q

What is insurance?

A

Financial protection against possible loss

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4
Q

What is a proposal for?

A

Form you fill out when applying for insurance

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5
Q

What is a claim form?

A

A form you fill out when making a claim

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6
Q

What is an insurance policy?

A

Document you receive when you buy insurance. Legally binding contract

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7
Q

What is a renewal notice?

A

A document sent out before the insurance is due for renewal, state’s the premium of renewing the policy

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8
Q

What is a cover note?

A

A document that proves insurance is in place. Used until official insurance policy document is sent out

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9
Q

What is a premium?

A

The amount paid for insurance

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10
Q

What is a policy excess?

A

The amount that the insured pays when they have made a claim

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11
Q

What is loadings?

A

An additional charge on top of the basic premium

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12
Q

What is a no claims bonus?

A

A reduction in the premium if no claim has been made

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13
Q

What are days of grace?

A

A short period of time given to the insured to pay the premium

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14
Q

What is an actuary?

A

Someone who calculates premium

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15
Q

What is an assessor?

A

Someone who assesses the amount of compensation to be paid

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16
Q

What is a loss adjuster?

A

An independent person who can be appointed to assess the situation and adjust the amount of compensation

17
Q

What is an insurance agent?

A

A person who sells insurance on behalf of one insurance company e.g. an agent of axa

18
Q

What is an insurance broker?

A

Person who sells insurance on behalf of many insurance companies

19
Q

What are the 5 principles of insurance?

A 
Insurable interest 
Utmost good faith
Indemnity
Contribution
Subrogation
20
Q

What is insurable interest?

A

A person must benefit from an items existence and suffer from its loss financially in order to insure it

21
Q

What is utmost good faith?

A

Must be completely truthful when filling out proposal forms

22
Q

What are material facts?

A

Information that is not asked on a proposal form but you must state e.g. if you are a smoker for health insurance

23
Q

What is indemnity?

A

You cannot make a profit from insurance

24
Q

What is average clause? (Def + formula)

A

Calculates compensation when something is under insured

(Amount item insured for)(claim)/real value of item

25
Q

What is contribution?

A

If an item is insured with two companies, the companies split the compensation (no profit made)

26
Q

What is subrogation?

A

Once you have received compensation for a claim you cannot make a further claim

27
Q

How is insurance calculated?

A 
Risk
Claims
Value
Loadings
Discounts
28
Q

What types of insurance do both households and businesses need?

A

PRSI
premises
Contents
Motor

29
Q

What are the 3 types of motor insurance?

A

Comprehensive
Third party
Third party fire and theft

30
Q

What other types of insurance should a household have?

A 
Health 
Mortgage protection 
Income protection 
Personal accident insurance
Travel
Identity theft
Life assurance
31
Q

What are the 3 types of life assurance?

A

Term life policy
Whole life policy
Endowment

32
Q

What types of insurance should a business have? (8)

A

Product liability - covers against claims made by customers who suffer injury or illness from products
Public liability - covers against claims made by public who suffer injury on premises
Employers liability - covers against claims made by employees who suffer injury on premises
Key personnel - covers costs of finding a replacement for a valuable member of staff who leaves
Fidelity guarantee - covers against fraud by employees
Consequential loss - covers against loss that happens as a result of another loss
Cash in transit - covers against cash when it is not on the premises
Plate glass - covers damage to windows

33
Q

What are 3 reasons for insurance?

A

Legal requirements
Less cost
Risk management

Business (LC) (23 decks)

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