Non-compulsory insurance

Non-compulsory insurance

1. 1) Fire Insurance

   • Forms part of other insurance policies
     • Fire damage to the structure of a house/building included in insurance made compulsory by banks
     • fire causing damage to vehicle- vehicle insurance
     • Content of the house covered against fire by the householder's insurance
   • The more flammable a product
     • Higher risk, therefore, higher premium
   • Nature of surrounding buildings may have an impact on the risk and the premium
     • e.g a garage-high risk. higher premium

2. 2) General Business Insurance/ Commercial Insurance

   • Important decision the entrepreneur/ manager has consider in order to protect the business from losses caused by unforeseen circumstances
     • Theft, Burglary, Public liability if a customer slips on a wet floor
   • Customer slipping
     • Liability Insurance
   • Insurance contracts relating to inventory include an iron safe clause
     • requires the insured (Business) to keep a record of stock on in a safe that is fireproof and that cannot be destroyed by the fire
       • it can be kept off-site due to technology
   • Loss of income can be covered in commercial insurance

3. 3) Household Insurance

   • Holds all types of assets that form part of every household that is at risk due to events such as
     • Burglary, accidents, losses caused by fire, lightning, floods
   • if insured has visitors, their belongings may also be covered if provision was made for it in policy
   • Liability Insurance
     • is usually also included as part of the household insurance
       • cover home owner against losses or injuries sustained by people visiting or working on the premises

4. 4) Vehicle Insurance

   • Fully Comprehensive
     • Insured's car and other vehicle will be repaired in the case of an accident
     • Damage caused by fire will be covered or if the car is stolen the insured will be indemnified
     • important to remember that items such as expensive sound systems, laptops must be specified separately to avoid these assets not being covered by the insurance policy
     • Insurers can work out tailor made solution to cover individual needs of the insured
   • Third-party Fire and theft
     • the older the vehicle, the less the value
     • if a vehicle is old it may not be viable to continue paying fully comprehensive insurance
       • because chances are the insurance company will write off the vehicle if it is damaged and not pay out a decent value
         • Male drivers under the age of 25 are classified high risk and their car insurance premiums are usually very expensive
     • If old vehicle is to blame for an accident that caused damage to an expensive the damage to the other car (third party) should be paid by his/her insurance premium
       • this insurance also pays out if car is stolen or damaged in fire

5. 5) Money in transit Insurance

   • If business handles a lot of cash, may be wise to take out insurance
     • to cover any potential losses that may occur between the business and the bank
       • however some business can choose to outsource the transportation to a third party e.g Coin Security Company (definitely has this type of insurance)

6. 6) Fidelity Insurance

   • Taken out to protect the business against financial losses caused by dishonest employees
   • Theft of money/ fraud may be covered
   • If there are a few people in the business handling money the policy may be taken out to cover individual employees
     • names are specified
   • if large number of employees need to be covered- a floating policy may be taken out where specific positions are covered

7. 7) Crop insurance

   • Aimed specifically at farmers and is taken out to cover risks that may arise from their income-generating assets
   • Risks covered
     • drought, heat waves, floods, hail, frost and fire
   • Additional insurance on livestock may also be added