Unit 4 chapter15

• Ways to minimize risk

  • install security cameras- security risks can be reduced by installing alarm,CCTV cam and motion censored lights.
  • training- everyone should be aware of heath and safety proc eg what to do in the event of a fire, cpr training for a medical emergency
  • appoint a health and safety officer- appoint in the workplace to report safety issues and conduct regular safety inspections .management may replace of upgrade machines and equipment based on recommendations
• What are five ways to reduce risk

  Install security cameras,training,health and safety officers, heath and safety,insurance
• Insurance- individuals and businesses are exposed to risks everyday.eg stolen car or fire.after doing a risk assessment them can take out insurance cover to protect against any pot losses.in return for a premium fee
• the forms

  • proposal form - the form you fill in when applying for insurance
  • claim form - the form you fill in when making a claim eg fire has damaged your buildin.
• the document

  • insurance policy - the document you receive when you buy insurance.it is a legally binding contract and must be done in writing . It sets up the terms and conditions of the contract ie what risks are covered
  • renewal notice - the document is sent out before the policy is due for renewal.
  • cover note - this document
• Principles of insurance

  1. Insurable interest
  2. Utmost good faith
  3. Indemnity
  4. Contribution
  5. Subrogaton
• Insurable interest

  this means that the insured person must own the item to be insured, they must benefit from its existence, and suffer financially from its loss
• Utmost good faith

  this means when you are completing the proposal form, and the claim form, you must be completely truthful
• Indemnity

  This means you cannot make a profit from insurance. You cannot be better off after loss has occurred then before it happened.
• Partial loss

  Amount of compensation payable= amount item is insured for x the claim divided by the real volume of the item
• Contribution

  This is used when a household, or a business ensures an item with two or more insurance firms. [tries to make a profit.].

  Amount insured with insurance company x claim

  ————————————————————————————

  Total amount insured [all insurance companies]
• Subrogation

  This is linked to indemnity. It states that once you receive compensation, you give up your right to make any further claims [the insurance company can sue for further compensation.]
• Insurance premium calculations

  1. Risk [more likely, the risk is to occur the higher the premium will be.]
  2. Claims [the amount paid out by insurance firms in the path will affect the level of premium.]
  3. Value [higher value, higher premium.]
  4. Loadings [these increase the premium as they add, extra risk, e.g., smokers, and life insurance.]
  5. discounts. [people can take steps to reduce the risk, and therefore reducing their premium.]
• Household and business insurance

  Similarities

  1. Property and premises insurance
  2. Contents insurance
  3. Motor insurance
  4. PRSI

  Differences

  1. Health insurance
  2. Mortgage protection
  3. Income protection
  4. Personal accident insurance
  5. Identity theft
  6. Life assurance
• Insurance for a business

  1. Product liability
  2. Public liability
  3. Employer liability
  4. Key personnel
  5. Plate glass
  6. Cash in transit
• Business and household

  Similarities

  1. Policies
  2. Forms
  3. Risk management
  4. Review policies

  Differences

  1. Risks
  2. Premium
  3. Business expenses
• Importance of insurance

  • Cost saving
  • Legal requirements
  • Risk management