WAEC SSCE - Insurance - 2015

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(a) Employer's liability insurance

Employer's liability insurance is a class of insurance that covers an employer against legal liability to pay compensation for death, bodily injury, disease or ill-health suffered by his employees in the course of and arising out of their employment. It protects the employer from claims brought by workers who are injured or fall sick because of their work.

(b) Three benefits that can be covered under employer's liability

1. Compensation for death or permanent disability of an employee arising from a work accident.
2. Medical, hospital and treatment expenses incurred by the injured employee.
3. Loss of earnings or wages during the period the employee is unable to work, and legal costs of defending claims.

(c) Three causes of business interruption

1. Fire or explosion that destroys premises, plant or stock, forcing operations to stop.
2. Breakdown of essential machinery or equipment.
3. Natural perils such as flood, storm or earthquake damaging the business premises.
4. Loss of power supply or of key raw materials halting production.

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Three types of endowment policy

1. Pure (ordinary) endowment policy: Under this policy the sum assured is paid on the death of the life assured within the term or on his survival to the end of the fixed term, whichever comes first. It combines protection with saving and is the basic form of endowment.
2. With-profit (participating) endowment policy: This is an endowment under which, in addition to the guaranteed sum assured, the policyholder shares in the profits of the insurer through bonuses added to the policy. It pays a larger amount at maturity but attracts a higher premium.
3. Without-profit (non-participating) endowment policy: Under this policy only the fixed sum assured is payable at death or maturity, with no share in the insurer's profits. Its premiums are lower than those of the with-profit type.

Other recognised forms include the joint-life endowment, taken on two lives (for example husband and wife) with the sum payable on the first death or at maturity, and the double endowment, which pays twice the sum assured on survival to maturity but the single sum on earlier death.

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Meaning of the terms as used in insurance:

1. Re-insurance: This is an arrangement whereby an insurance company transfers part of the risk it has accepted to another insurance company. It helps to spread risks and protects the insurer from very large losses.
2. Loss adjusters: These are claims specialists appointed by insurance companies to investigate losses, determine the cause and extent of damage, establish whether the insurer is liable and recommend the amount payable as compensation.
3. Underwriters: These are individuals or companies that assess risks proposed for insurance. They decide whether to accept or reject the risk and, where accepted, determine the premium, terms and conditions of the policy.
4. Brokers: These are independent insurance intermediaries who act mainly on behalf of the insured. They advise clients on suitable insurance policies, obtain cover from insurance companies and assist clients in placing and negotiating claims.
5. Assessor: This is a person who examines insured property or damage to it in order to estimate its value or the extent of loss. The assessor helps in determining the amount of compensation or claim due to the insured.

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