Insurance Flashcards
insurance
offers financial protection against possible loss
protects against risk
should put the insured person back in same financial position as before
principles of insurance
utmost good faith insurable interest indemnity contribution subrogation
utmost good faith
must be true/honest about all material facts/info
if withheld, contract could be void, claims rejected
material facts- any info that would affect the companys decision to insure them
insurable interest
you can only insure something you own ie you have a legal relationship with the item
the policy owner must benefit from the continued existence of the item and suffer financially from its loss
idemnity
cannot profit from an insurance claim
no profit from a loss, only recovery of the loss
put the claimant in the same position as before
amount insured for = cost of a replacement
if underinsured- average clause
average clause
claim x amount item is insured for
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how much item is worth
contribution
seeks to prevent a person from making a profit from insurance by insuring an item with more than one insurance company
if insured twice- amount claimed is proportionally divided between them
contribution formula
claim x amount insured with one company
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total amount insured with all companies
do for each company
subrogation
once full compensation is paid any remaining property (intact or partly damaged) becomes the property of the insurance company
any rights to sue a third party for damage caused revert to the insurance company
amount of premium to be paid depends on
level of risk (loading) value of item previous claims (company or claimant) profit government taxes
insurance for business
fidelity guarantee insurance
public liability insurance
employers liability insurance
product liability insurance
fidelity guarantee insurance
protects against loss due to employers stealing cash/stock
public liability insurance
protects against loss due to members of the public having an accident on the business premises or negligence of the business
employers liability insurance
covers business against claims from employers as a result of accidents in the workplace
product liability insurance
protects the business against claims from customers as a result of defective products that caused harm
third party motor insurance
insurance company only pays for the damage or injury caused to another person and their property
doesnt cover the policy holder
third party fire and theft motor insurance
same as third party plus fire and theft to vehicle
comprehensive motor insurance
compensation is paid for any damage or injury to all parties involved
household insurance
health insurance life assurance house and contents insurance motor insurance mortgage protection insurance
risk management
planned approach to minimising the risks a business is exposed to by:
- insurance
- increasing security eg CCTV
- proper training eg fire drills
- regular safety inspections
