General Insurance information

1. Basic Concepts
a. General Insurance terminology: Investopedia’s Insurance Basics,
Insurance Information Institute (III)
i. Insurance: a contract (policy) in which an individual or
entity pays an insurance company in exchange for financial
protection or reimbursement of losses resulting from a
covered event. The insurer indemnifies another against
losses from specific contingencies or perils.
ii. How it works? Businesses obtain insurance policies for
field-specific risk. A company may use an insurance broker
of record to help them manage the policies of its
employees. Businesses may be required by state law to
buy specific insurance coverage.
iii. Insurance Policy components:
1. Premium: Is its price, typically a monthly cost. The
value depends on the insurer’s perception of your
risk for a claim.
2. Policy limit: Is the maximum amount an insurer will
pay for a covered loss under a policy. Maximums may
be set per period, per loss or injury, or over the life of
the policy – lifetime maximum. Higher limits carry
higher premiums.
3. Deductible: Is a specific amount you pay out of
pocket before the insurer pays a claim. It serves as
deterrents to large volumes of small and insignificant
claims. Deductibles can apply per policy or claim,
depending on the insurer and the type of policy.
Policies with higher deductibles are typically less
expensive because the high out of pocket expense
generally results in fewer small claims
iv. What is Insurance? Is a way to manage your financial risk.
Buying insurance is purchasing protection against
unexpected financial losses. It offers you peace of mind
regarding unforeseen financial risks.

Agreements usually take the form of an insurance policy, with insurance

underwriters or an insurance company acting as financial intermediary. In
return for a payment called a premium, the insurer assumes the risks—that
is, obligates itself to pay the losses—of all the policyholders. (iii).
The purpose of insurance is the transfer of risk. Its aim is to reduce financial
uncertainty and make accidental loss manageable. It does this by substitute
payment of a small know fee (premium) to a professional insurer in exchange
for the assumption of the risk a large loss, and the promise to pay in the
event of such loss.

There are many types of insurance policies. Life, health, homeowners, and
auto are among the most common forms of insurance.

The core components that make up most insurance policies are the premium,
deductible, and policy limits.

v. General Liability Insurance: Covers third-party bodily injury

and third-party property damage claims. It compensates
the third party for their losses and pays your business’
legal fees if you get sued.
vi. Property insurance: Is a series of policies that provide
either property protection or liability coverage for property
owners. It provides financial reimbursement to the owner
or rent of a structure and its contents in case of damage or
theft (and the person owner or renter if that person is
injured on the property).
Property insurance includes homeowners’ insurance,
renters’ insurance, flood insurance, earthquake insurance,
and other types of coverage.
vii. Workers’ compensation: provides benefits to workers who
become injured or ill on the job due to a work-related
accident. WC covers medical costs, healthcare benefits,
income for lost wages, education retraining and disability
pay. It is a state government-mandated program, but the
required benefits vary from state to state. Texas is the only
state that does not require employers to maintain WC
insurance.
viii. Auto and Umbrella
ix. Marine Coverage
x. Marine Terminal Operators
xi. Cyber
xii. FINEX
xiii. Claims
2. Insurance Policies: is a contract between an insured individual and an
insurer that outlines the terms, conditions, and exclusions for a specific
risk, with the insured paying a premium for coverage.
(Each section provides details about coverage, limits and exclusions).
National Association of Insurance Commissioners (NAIC) consumer
guides on policy components and types of insurance.
a. Declaration
b. Insuring agreements
c. Exclusions
d. Conditions
3. Types of corporate insurance (Business related policies) Small business
Administration insurance guide. Risk and Insurance Management
Society (free articles and webinars).
a. Workers’ compensation
b. Liability insurance
c. Property insurance
d. Directors’ and officers’ insurance
4. Role of insurance Brokers and Risk Management (IRMR International
Management Institute) Free articles and glossaries on risk
management and insurance.
a. Responsibilities of insurance brokers and how they assist our
company in obtaining the right coverage.
In insurance broker of record is an agent designated by the
policyholder to represent and manage a policyholder’s insurance
policy. A broker of record may receive copies of all
communications to the policyholder and may receive all quotes,
policies and notices on behalf of the policyholder.
Is an agent who is responsible for managing and representing a
policyholder’s insurance policy, often receiving a monthly
commission from an insurance company for working as such.
A broker of record letter is a legal document used to set the
relationship between then broke, policyholder and the insurance
company.
b. Basic risk management principles – risk strategy.
5. Company’s existing policies and brokers relations
a. Review the company’s current insurance policies
Research Org.

1. General Over: Insurance basis and policy structure

2. Business specific insurance: Type relevant for industry and company
3. Broker and risk management roles
4. Company specific application: Reviewing current policies and
understanding needs
5. Spreadsheet for key terms, type of coverage and resources

https://www.iii.org/resource-center/iii-glossary

https://www.investopedia.com/terms/i/insurance.asp