Insurance Basics

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Questions and Answers

What does employers liability insurance protect against?

Loss of income due to major events such as a factory fire

Harm or loss suffered through the use of a firm's product

Financial loss due to fire

Claims from accidents, injuries, illness suffered by an employee due to their work (correct)

Which type of insurance would cover financial loss from a major event like a fire in a factory?

Employers liability insurance

Consequential loss insurance (correct)

Product liability insurance

General health insurance

Which of the following is true about product liability insurance?

It protects against claims related to employee injuries

It pays out a lump sum when the insured reaches a certain age

It protects against harm or loss from using a firm's product (correct)

It covers financial loss from events like fires

How does mortgage protection insurance function?

It covers the remainder of the mortgage if the person dies without paying it off Signup and view all the answers

What is the role of an insurance broker?

To independently identify insurable risks and advise on the best insurance company Signup and view all the answers

What does endowment life assurance offer the policyholder?

A lump sum when the insured reaches a certain age if alive Signup and view all the answers

What does health insurance for employees provide?

Sick pay for workers unable to work due to illness Signup and view all the answers

What is the fundamental purpose of property insurance for businesses?

To insure premises and contents against fire, flood, burst pipes and theft Signup and view all the answers

Which insurance protects a business against claims if a public member is injured in an accident considered the business's fault?

Public liability insurance Signup and view all the answers

What does a fidelity guarantee insurance cover?

Fraud or dishonesty by an employee Signup and view all the answers

Why is motor insurance crucial for a business?

It is a legal requirement for any business vehicle Signup and view all the answers

What is the main benefit of life assurance for a household?

It enhances savings Signup and view all the answers

What type of insurance protects a business against the loss of a valuable staff member?

Key person insurance Signup and view all the answers

Why is financial security important for a household in the context of insurance?

It ensures risks can be covered Signup and view all the answers

What determines the fee for an insurance policy?

Level of risk, value of the item, loadings Signup and view all the answers

What is a cover note in the context of insurance?

A temporary document proving insurance contract before the policy is issued Signup and view all the answers

What is the role of an assessor in the insurance process?

To evaluate the damage and decide the amount of compensation Signup and view all the answers

What does the principle of indemnity ensure?

A person cannot make a profit from insurance Signup and view all the answers

What does the principle of contribution state?

If two or more insurers are involved, they will divide the claim cost between them Signup and view all the answers

Under the principle of subrogation, what is the insurance company's right after compensating for a loss?

To take possession of the item involved Signup and view all the answers

What must a person seeking insurance demonstrate according to the principle of insurable interest?

They must benefit from the item's existence and suffer from its loss Signup and view all the answers

What method might an insurance company use to settle a claim?

Cash compensation, replacement of the asset, repair or reinstate Signup and view all the answers

Study Notes

Business Insurance

Protects against claims for harm or loss suffered through the use of a firm's product
Employers' liability: protects against claims from accidents, injuries, or illnesses suffered by an employee due to their work
Consequential loss: protects against a major event that has a financial loss of income for the business

Personal Insurance

House insurance: Buildings & Contents
Motor insurance
Mortgage Protection: pays out if the person dies without paying the mortgage
General health insurance (e.g., Aviva, VHI)
Life assurance: pays out a lump sum when the insured dies
Endowment life assurance: pays out a lump sum when you reach a certain age if you are not dead yet

Taking out Insurance

Step 1: Contact an insurance company or broker
Step 2: Fill out a proposal form
Step 3: Risk is assessed and premium is calculated
Step 4: Cover note and Policy Issued
Step 5: Making a claim

Importance of Insurance

Business survival: protects against financial loss
Exporting goods: easier with insurance against damage
Legal requirement

Importance of Insurance for a Household

Peace of mind in case of accidents
Financial security as risks can be covered
Savings can be enhanced by life assurance

Types of Insurance

Property Insurance: premises and contents against fire, flood, burst pipes, and theft
Cash & Valuables: insured while on premises and in transit
Motor insurance: legal requirement
Health insurance: provides sick pay for workers unable to work due to illness
Key person insurance: protects a business against a loss of a valuable staff member
PRSI: compulsory insurance paid to the state by employees and employers
Fidelity guarantee: protection against fraud or dishonesty by an employee
Public liability insurance: protects against claims if a public member is injured in an accident

Principles of Insurance

Insurable interest: person seeking insurance must benefit from the existence of the item and suffer from its loss
Utmost good faith: must fill in proposal form truthfully
Indemnity: a person cannot make a profit from insurance
Contribution: if two or more insurers are involved, they will divide the total cost of the claim between them
Subrogation: the insurer who pays out full compensation for an item insured is entitled to take possession of the item involved

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Description

Understanding the basics of insurance, including the importance of insurance for businesses and households.