Financial loss
insurance
protects individuals and companies
against various financial risks. For example, a business might
purchase cover to protect it from loss of sales if a fire in a factory
prevented it from carrying out its business for a time. Insurance
might also cover failure of a creditor to pay money it owes to the
insured. Fidelity bonds and surety bonds are included in this
category.
Health insurance
covers medical bills incurred because of sickness or accidents.
Liability
insurance covers legal claims against the insured. For
example, a homeowner's insurance policy provides the insured with
protection in the event of a claim brought by someone who slips and
falls on the property, and brings a lawsuit for her injuries.
Similarly, a doctor may purchase liability insurance to cover any
legal claims against him if his negligence (carelessness) in treating
a patient caused the patient injury and/or monetary harm. The
protection offered by a liability insurance policy is two-fold: a
legal defense in the event of a lawsuit commenced against the
policyholder, plus indemnification (payment on behalf of the insured)
with respect to a settlement or court verdict.
Life
insurance provides a cash benefit to a decedent's family or
other designated beneficiary, and may specifically provide for burial
and other final expenses.
Annuities
provide a stream of payments and are generally classified as insurance
because they are issued by insurance companies and regulated as
insurance. Annuities and pensions that pay a benefit for life are
sometimes regarded as insurance against the possibility that a retiree
will outlive his or her financial resources. In that sense, they are
the complement of life insurance.
Total
permanent disability insurance insurance provides benefits
when a person is permanently disabled and can no longer work in their
profession, often taken as an adjunct to life insurance.
Locked Funds
Insurance is a little known hybrid insurance policy jointly
issued by governments and banks. It is used to protect public funds
from tamper by unauthorized parties. In special cases, a government
may authorise its use in protecting semi-private funds which are
liable to tamper. Terms of this type of insurance are usually very
strict. As such it is only used in extreme cases where maximum
security of funds is required.
Marine
Insurance covers the loss or damage of goods at sea. Marine
insurance typically compensates the owner of merchandise for losses
sustained from fire, shipwreck, etc., but excludes losses that can be
recovered from the carrier.
Nuclear incident insurance — damages resulting from an incident
involving radioactivive materials is generally arranged at the
national level. (For the United States, see Price-Anderson Nuclear
Industries Indemnity Act.)
Environmental Liability Insurance protects the insured from bodily
injury, property damage and cleanup costs as a result of the
dispersal, release or escape of a pollutant.
Political
risk insurance can be taken out by businesses with
operations in countries in which there is a risk that revolution or
other political conditions will result in a loss.
Professional
Indemnity Insurance is normally a mandatory requirement for
professional practitioners such as Architects, Lawyers, Doctors and
Accountants to provide insurance cover against potential negligence
claims. Non licensed professionals may also purchase malpractice
insurance, it is commonly called Errors and Omissions Insurance and
covers a service provider for claims made against them that arise out
of the performance of specified professional services. For instance, a
web site designer can obtain E&O insurance to cover them for certain
claims made by third parties that arise out of negligent performance
of web site development services.
Property
insurance provides protection against risks to property,
such as fire, theft or weather damage. This includes specialized forms
of insurance such as fire insurance, flood insurance, earthquake
insurance, home insurance, inland marine insurance or boiler
insurance.
Terrorism
insurance
Title
insurance provides a guarantee that title to real property
is vested in the purchaser and/or mortgagee, free and clear of liens
or encumbrances. It is usually issued in conjunction with a search of
the public records done at the time of a real estate transaction.
Travel
insurance is an insurance cover taken by those who travel
abroad, which covers certain losses such as medical expenses, lost of
personal belongings, travel delay, personal liabilities.. etc.
Workers' compensation insurance replaces all or part of a worker's
wages lost and accompanying medical expense incurred due to a
job-related injury.
A single
policy may cover risks in one or more of the above
categories. For example, car insurance would typically cover both
property risk (covering the risk of theft or damage to the car) and
liability risk (covering legal claims from say, causing an accident).
A homeowner's insurance policy in the U.S. typically includes property
insurance covering damage to the home and the owner's belongings,
liability insurance covering certain legal claims against the owner,
and even a small amount of health insurance for medical expenses of
guests who are injured on the owner's property.
Potential sources of risk that may give rise to claims are known as
"perils". Examples of perils might be fire, theft, earthquake,
hurricane and many other potential risks. An insurance policy will set
out in details which perils are covered by the policy and which are
not.
Before you agree to an insurance policy
from an insurance broker - check
the broker out first on the web.
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