Insurance - Business Revision Notes
© irevise.com 2016.
All revision notes have been produced by mockness ltd for irevise.com.
- 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.
- Identify Risks: the entrepreneur/ householder must identify the risks faced. A decision must be made if insurance is necessary.
- Costs if Risks Occur: the costs involved if any of these risks actually occur must then be worked out.
- Cost of Protection: the cost of protecting the business from risks must then be established.
- 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 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.
- Utmost Good Faith
- When the proposal for...