Insurance - Business Revision Notes

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Contents

Insurance and Tax 4

Risk Management 4

Steps Involved 4

Insurance 4

Principles of Insurance 4

Insurance Premium 5

Factors Affecting Premium 5

Types of Insurance for a Business 6

What is the Importance of Insurance for a Business? 7

Types of Insurance for a Household 7

Household and Business Insurance 8

Taxation 8

What are the Taxes Paid by Households? 8

Income Tax 8

VAT- Value Added Tax 9

Capital Gains Tax 9

Capital Acquisitions Tax 9

Motor Tax 10

DIRT- Deposit Interest Retention Tax 10

Taxes Paid by Businesses 10

Self Assessment Income Tax 10

Corporation Tax 10

Customs Duties 10

Employer’s PRSI 10

Commercial Rates 10

VAT 11

What Effects does Taxation have on Businesses? 11

Household and Business Taxation 11

Insurance and Tax

Risk Management

  • This is the planned approach to minimising the risks that businesses and households are exposed to. In business, a risk manager is in charge of this area.

Steps Involved

  1. Identify Risks: the entrepreneur/ householder must identify the risks faced. A decision must be made if insurance is necessary.
  2. Costs if Risks Occur: the costs involved if any of these risks actually occur must then be worked out.
  3. Cost of Protection: the cost of protecting the business from risks must then be established.
  4. Measures Taken: measures are then taken to protect the business or household from these risks. Risks can also be reduced through training, putting safety procedures in place etc.

Example: a household can minimise the risk of theft by installing an alarm. A business can do the same by employing security guards.

Insurance

  • Insurance is the protection against losses that could occur in the future. The insurance company is called the insurer, the person seeking the insurance is the insured and the fee charged by the insurer is the premium.
  • Assurance is contrast is protection against something that will definitely occur e.g. death.

Principles of Insurance

  1. Utmost Good Faith
  • When the proposal for...

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