Term
| Identify 3 categories of Risk. |
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Definition
-Personal Risk
-Property Risk
-Liability Risk |
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Term
| Identify four options in dealing with risk. |
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Definition
-Avoidance of Risk
-Controlling of Risk
-Retention of Risk
-Transfer of Risk |
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Term
| Identify two types of risk and provide a brief description of each. OF these, which is insurable? |
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Definition
i) Speculative Risk - has potential for financial gain or loss. Not insurable.
ii) Pure Risk - chance of financial loss with no chance of gain. Cannot profit from a loss. Insurable. |
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Term
| Identify the five elements required to be present in all contracts. |
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Definition
1) Agreement
2) Consideration
3) Legality of Object
4) Legal Capacity of the Parties to Contract
5)Genuine Intention |
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Term
| Identify the three additional elements which are unique to insurance contracts and which must be present if an insurance contract is to be enforceable by law. |
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Definition
1) Insurable Interest
2) Utmost Good Faith
3) Indemnity |
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Term
| What does it mean for brokers to "bind" the insurer on a risk? |
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Definition
| It means the broker has committed the insurer to provide a contract of insurance on the subject matter under discussion. |
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Term
| Identify two documents or sources which brokers can refer to in order to determine the extent of "binding authority" given to them. |
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Definition
1) Agency Agreement
2) Rate Manual |
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Term
| Identify three types of insurance forms used by insurers to make changes to an existing policy. |
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Definition
1) Endorsements or Riders
2) Floaters
3) Separate Policies |
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