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17 Cards in this Set

  • Front
  • Back

Define Premium

The money paid to the insurance company by the insured to cover a risk

Define Proposal

The application form a household or business fills in to apply for insurance

Define Quotation

The amount to be paid to cover the risks in a proposal, the amount depends on the degree of risk, value of the item and no claims bonus

Define Policy

If the customer accepts and pays the premium a policy document detailing the terms of the contract is sent to the insured (customer)

Define Insurance claim

When a risk happens an insurance claim is filed describing what happened and stating the amount of money to be claimed by the insured. The company can use an assessor to inspect the claim

Principles of insurance

Insurable interest

Utmost good faith




Define Insurable interest

You can insure something only if you would suffer a financial loss if the thing insured was lost or damaged

Define Utmost good faith

An insured person must give accurate and full information to the insurance company

Define Indemnity

An insurance claim must only compensate the insured cannot profit

Define Contribution

If an item is insured under two companies the insured can only claim for loss once, both companies arrange to pay half each

Define Subrogation

After the company pays for compensation they have the right to:

Take possession of the item.

Sue any person who is responsible for the loss to recover the cost.

Define Average clause

If something is underinsured, only a proportion of any claim will be paid out

Employer's liability insurance

A insurance to protect employer's from claims by employees who suffer injuries in the workplace

Product liability insurance

Protects a business from claims from it's customers who suffer an injury or loss resulting from faulty goods produced by the firm

Public liability insurance

Insurance which protects q firm against claims from the general public who suffer injury or loss as a result of visiting the premises of the firm

Risk management

Eliminating or reducing risks to lower insurance premiums

Third-party insurance

A type of motor insurance that provides protection against claims by parties other than the insured for injuries caused by the insured person's car