Insurance

• Buildings or property insurance


  Provides protection against the loss or damage to the actual physical building itself, usually caused by fire, flooding, or storm damage
• Contents insurance


  Provides protection against the loss or damage to the valuables or goods inside the business, usually caused by burglary, fire, or flooding
• Motor insurance


  Provides insurance coverage for vehicles owned by the business, such as company cars or delivery vans
• Types of motor insurance


  • Third-party
  • Third-party fire and theft
  • Comprehensive
• Third-party insurance


  Covers the damage to the other driver's vehicle if you are in an accident, but not your own vehicle
• Third-party fire and theft insurance


  Covers the same as third-party insurance, plus protection if your vehicle is stolen or goes on fire
• Comprehensive insurance


  Covers the same as third-party fire and theft, plus any damage to your own vehicle
• Key person insurance


  Protects a business against the loss of a valuable staff member, such as a lead actor in a movie production
• Public liability insurance


  Covers the business against claims made by the public for accidents that occur on the business premises and are the fault of the business
• Employer liability insurance


  Covers the business against claims made by employees for accidents that occur while they are working
• Fidelity guarantee insurance


  Protects the business against dishonesty or fraud committed by an employee
• Product liability insurance


  Covers the business against claims made by customers for damages caused by a defective or faulty product
• Consequential loss insurance/business interruption insurance


  Provides compensation to the business if they lose income due to a major risk occurring, such as a fire in the factory
• Household insurance


  Insurance for individuals living in their own day-to-day houses, similar to business insurance but for personal property
• House insurance


  • Covers protection against loss from damage caused by fire, storm, etc.
  • Covers the building and the contents (furniture, appliances, etc.)
• Motor insurance


  Required by law, can be third-party, third-party fire and theft, or comprehensive
• Mortgage protection insurance


  Taken out by mortgage borrowers to pay off the remaining mortgage if the borrower passes away before the mortgage is fully paid
• Health insurance


  Private health insurance that provides access to private healthcare
• Income protection insurance


  Provides replacement income payments if the policyholder becomes sick, injured, or incapable of working
• Life assurance


  Insurance that provides a lump sum payment to named beneficiaries upon the death of the policyholder
• Types of life insurance


  • Whole life assurance
  • Endowment life assurance
  • Term life assurance
• Whole life assurance


  Policyholder pays an annual premium for life, with payout only upon death
• Endowment life assurance


  Policyholder pays premiums for a set period, with payout at a certain age or upon death before that age
• Term life assurance


  Provides coverage for an agreed period of time, with payout only if policyholder dies within that time frame
• Legal requirements


  Both households and businesses are required to have motor insurance or insurance on their vehicle
• Paperwork


  Both households and businesses have to fill in a proposal form when applying for insurance, and a claim form when making a claim
• Risk management


  Both households and businesses try to reduce the risk of something bad happening to reduce their insurance premiums
• Record keeping


  Both households and businesses need to keep their insurance policy up to date and keep copies of the documents
• Differences between household and business insurance


  • Level of risk is higher for businesses
  • Businesses have a greater variety of insurance policies needed (e.g. public liability, fidelity guarantee, key person insurance)
  • Premiums are generally higher for businesses due to higher risk and more valuable assets
• Businesses have a much greater risk than households because they have more things to deal with (e.g. employee theft, injuries on premises)
• The cost of a factory burning down would be much greater than the average cost of a house burning down
• The payoff for business insurance would be higher than household insurance because the value of the assets is higher
• Steps involved in taking out an insurance policy

  1. Decide what type of insurance you need

  2. Get a valuation of the item

  3. Contact an insurance company or broker

  4. Fill in a proposal form

  5. Decide on the company and pay the premium

  6. Insurance company issues policy and certificate
• Underinsured


  Inadequate insurance coverage, where the item is not insured to its full value
• Over-insured


  Insuring an item for more than its actual value
• Insurance broker


  Goes on your behalf to collect quotes from different insurance companies to get the best deal, and may charge a small fee
• Insurance agent


  Only works for and sells policies from one particular insurance company
• Proposal form


  Application form to propose getting insurance, containing details about the risk to be insured
• Certificate of insurance


  Short written summary of the main points of the insurance policy
• Insurance policy


  Written document from the insurance company containing all the details, terms and conditions of the insurance contract