Insurance notes for Business Studies, IEB curriculum, provide essential insights into sub-topics. They cover various types of insurance, such as liability, property, and life insurance, explaining their role in mitigating risks and ensuring business continuity. These notes understand the importance...
SUMMARY
1. Non-compulsory insurance
2. Compulsory insurance
3. Requirements of a valid insurance contract
4. Insurance/Assurance concepts
5. Advantages and Disadvantages of Insurance and
Assurance
Insurance covers an individual or business against the negative financial
consequences of a specific risk
Insurer- the insurance company that provides the cover
Insured- the individuals or business that takes out the insurance and is covere
financially
Short term- Insurance
Protection against an event that might occur
e.g. theft, fire
Long term- Assurance
Protection against an event that will definitely occur
e.g. death, retirement
NON COMPULSORY INSURANCE
INSURABLE RISKS
BUSINESS STUDIES 2 Page 1
, Premiums charged is dependent on the risk and the value of the item
□ Fire insurance-covers resulting from fire to a building, stock, equipment
etc. Iron safe clause which forces insured to keep record of stock in a
fireproof safe
□ Vehicle insurance- options either third party or fully comprehensive
insurance
□ All weather insurance and damage & theft insurance- part of the
homeowners and household policies. Covers storms, hail, lightning,
earthquakes etc
□ Insurance of money in transit- covering cash being transported the bank
□ Fidelity insurance- covers losses cause by dishonesty of employees e.g.
theft or fraud
□ Liability insurance- covers people who become liable for losses cause by
negligence on their property
NON INSURABLE RISKS
Inflationary factors
Changes in fashion
Improvements in machinery, production processes and technology
Losses caused by war- South African Special Risk Insurance Association
(SASRIA)
Illegal activities
COMPLUSORY INSURANCE
Unemployment Insurance (UIF)
► Funded by Department of Labour
► Covers employees against financial loss
► e.g. worker retrenched due to economic circumstances
► Worker may not claim if they quit
Worker may claim if fired
BUSINESS STUDIES 2 Page 2
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