insurance and assurance

Insurance

A legal contract in which an insurer promises to pay a specified amount to another party, the insured, if a particular event happens and the insured suffers a financial loss.

Indemnity

Restoring the insured to their original position before the loss occurred.

Insurable interest

The insured must have a vested interest in what is being insured, meaning they cannot insure property they do not own.

Utmost Good Faith

The insured must be truthful concerning the information related to the policy contract.

Proximate Cause

The damage caused must be closely related to the event insured against.

Contribution

Prevents persons from insuring identical risks on the same property with multiple companies to profit from loss.

Average Clause

Sets a limit to compensation based on the proportion of the true value of the asset paid for by the insured.

Subrogation

Allows the insurance company to claim the wrecked property after compensating the insured for their loss.

Life Assurance

A type of insurance where payment is made upon the death of the insured.

Whole Life Assurance

Payment is made upon the death of the insured, benefiting the beneficiaries.

Endowed Assurance

Payments made at the end of a specified period or upon the insured's death before the end of that period.

Fire Insurance

Covers loss or damages to assets caused by fire.

Burglary Insurance

Covers loss due to goods being stolen and damages to property caused by theft.

Bad Debts Insurance

Covers debts that cannot be collected.

Plate Glass Insurance

Covers the replacement of shop windows and injuries caused by breakage.

Fidelity Guarantee Insurance

Protects against loss due to misappropriation of funds by employees or customers.

Employers’ Liability Insurance

Covers injuries incurred by staff or visitors due to the negligence of the business.

Motor Insurance

Insurance for vehicles, which can be third-party or comprehensive.

Marine Insurance

Covers loss or damages of ships and cargo at sea.

Importance of Insurance to Businesses

Insurance is crucial for businesses as it helps recover from losses, encourages industry, facilitates trade, provides capital, and covers personal risks.