TYPES OF
INSURANCE
UNIT 1
Marine and Aviation Marine insurance
Insurances • Covers ships and goods against the danger at sea
• Include fire, theft of goods, piracy,
capture/seizure/detention by governments, bad
weather, collision.
• Covers freight and owners’ liability
Aviation insurance
• Covers losses or damages to aircrafts, accidents and
public liability to both people (passengers/crew),
cargo
Fire Insurance
• Covers domestic (ie home) and business premises and their
contents
• Factors to be considered:
-Value on the building
- types of materials used to construct premises
- source of electricity
- contents in the premises
- fire fighting facilities
- surrounding types of building
- record of the insured if previous claims were made
Motor Insurance
• Comprehensive – covers bodily and property damages to
the insured and third party
- covers loss of vehicle due to theft and fire
• Third party – covers bodily and property damages to the
third party
• Factors for consideration:
- type of vehicle
- sum to insure
- age and driving experience of driver
- driving record of driver and his occupation.
Accident insurance – risks not provided under fire,
life, marine and motor insurance
Insurance of liability
• Employer’s liability for accidents at work
• Professional indemnity against professional negligence, errors and omission
• Public liability for loss, damage to properties or injuries towards member of public due to negligence of the
insured or their employees
• Personal liability to cover claim by third party arising from negligence of insured
Property insurance
Personal accident insurance
• Against total or partial disablement or death
Workmen’s compensation
• Compulsory to cover workers who sustain injuries, loss of limbs or lives while working
Air Travel insurance
Covers:
• Hospitalisation and medical bills up to an agreed
amount, should the insured fall sick while on holiday
overseas
• Loss of luggage or money during holiday
• Cancellation charges if the insured cancels holiday due
to illness
• Cancellation of holiday due to strikes, bad weather,
transport breakdown
Other insurance
Burglary and Theft Fidelity Guarantee Business
• Covers loss of content • Covers against loss of • Comprehensive
due in the residence money due to insurance coverage
or property misdeed of for entrepreneurs and
• Must disclose employees businessmen against
contents insured unforeseen
against and their circumstances
value
Life Assurance – payment upon death
• Endowment policies eg Education insurance
- more like savings policies with higher yield (bonus)
- covers insured over a fixed period of time with an agreed amount
assured at the end of the maturity period
- high premium
• Whole life policies
- sum assured is paid to beneficiary upon death of insured
- option to surrender before death, surrender value is based on
number of year policy has been in existence and bonus accumulated
• Term policies
Riders – pay small additional premium to give a - covers insured for a fixed number of years without bonus upon
wider range of coverage for personal accident maturity
and disablement benefits - surrender value is zero
Life Assurance
Factors affecting the premium:
- Sum assured
- Type of policy
- Age and gender of the insured
- Insured’s occupation and occupational
hazards
- Insured’s health status and medical history of
family members
Mortgage loan insurance
• Mortgage loan – loan taken to pay for the property which is then
pledged to the bank or financial institutions
• Insurance to cover:
- balance of the loan debt in the event home owner dies
- fire insurance to protect the property
