This type of insurance covers any form of property against the risks of loss or damage. A person can insure any property he has an insurable interest in;
General insurance is usually divided into:

1. Fire insurance/department
2. Accident insurance/department
3. Marine insurance/department

This department covers all sorts of risks which occur by accident and includes the following;

1. Motor policies
   These provide compensation for partial or total loss to a vehicle if the loss results from an accident.
   The policy could either be third party or comprehensive.
Third party policies cover all damages caused by the vehicle to people and property other than the owner and his/her vehicle.
This includes pedestrians, fare-paying passengers, cows, fences and other vehicles
Comprehensive policy covers damages caused not only to the third party but also to the vehicle itself and injuries suffered by the owner.
Comprehensive policies include full third party, fire, theft and malicious damage to the vehicle.
2. Personal accident policy
   These policies are issued by insurance companies to protect the insured against personal accidents causing; injury to the person, partial or total physical disability as a result of the injury, loss of income as a result of death
   If death occurs due to an accident, the insured’s beneficiaries are paid the total sum assured
   In case of a partial or total disability as a result of accident, the insured can be paid on regular periods as stipulated in the policy.
   Compensation for injuries where one loses a part of his/her body can be done on a lumpsum basis. The insured is also paid the value of hospital expenses incurred if hospitalized as a result of an accident.
3. Cash and/or Goods in Transit policies
   These are policies that specifically provide cover for loss of cash and goods in transit between any two locations.
4. Burglary and Theft policies
   These policies cover losses caused by robbers and thieves. Burglary policies are enforceable only if the insured has met the specified safety and precautionary measures for protection of the insured items.
5. Fidelity Guarantee policies
   These policies cover the employers against loss of money and/or goods caused by their employees in the cause of duty. The losses may be as a result of embezzlement, fraud, arithmetical errors. The policies may cover specified employees or all the employees.
6. Workmen’s compensation
   These policies provide compensation for employees who suffer injuries in the course of carrying out their duties. The employer insures his employee against industrial injuries i.e the employer is only liable for the compensation of workers who suffer injuries at work.
7. Public liability
   This insurance covers injury, damages or losses which the business or its employees cause to the public through accidents. The insurer pays all claims from the public up to an agreed maximum.
8. Bad debts
   This policy covers firms against losses that might result from debtor’s failure to pay their debts.

This type of insurance covers ships and cargo against the risk of damage or destruction at the sea. The main risks sea vessels are exposed to include; fire, theft, collision with others, stormy weather, sinking e.t.c.
The marine insurance covers are classified as Hull, cargo, freight and ship owners’ liability.

1. Marine Hull
   This policy covers the body of the ship against loss or damage that might be caused by sea perils. Included here are any equipment, furniture or machinery on the ship. A special type of marine hull is the part policy, which is for a specified period when the ship is loading, unloading or at service.
2. Marine Cargo
   This type of policy covers the cargo or goods carried by the ship The policy is taken by the owners of the sea vessels to cover the cargo being transported. It has the following sub-divisions.
• Voyage policy-Here cargo and ship are insured for a specific voyage/journey. The policy terminates automatically once the ship reaches the destination.
• Time policy-Here insurance is taken to cover losses that may occur within a specified period of time, irrespective of the voyage taken.
• Fleet policy-This covers a fleet of ships,i.e several ships belonging to one person, under one policy.
• Floating policy-This policy covers losses that may occur on a particular route, covering all the ships insured along that route for a specified period
• Mixed policy-This policy provides insurance for the ship and cargo on specified voyages and for a particular period of time. No compensation can be made if the ship was on a voyage different from the ones specified even if time has not expired.
• Composite policy-This is where several insurance companies have insured one policy of a particular ship especially when the sum insured is too large to be adequately covered by one insurer.
• Construction policy/builders policy-This covers risks that a ship is exposed to while it is either being constructed, tested or being delivered.
3. Freight Policy
   This is an insurance cover taken by the owner of the ship for compensation against failure to pay hiring charges by a hirer of the ship.
4. Third Parties Liability
   This is an insurance policy taken by the owner of the ship to cover claims that might arise from damage caused to other people’s property.

The following are some of the losses encountered in marine insurance;

1. Total loss
   This occurs where there is complete loss or damage to the ship and cargo insured. Total loss can be constructive or actual.
   In actual total loss, the claims are as a result of the ships and/or cargos complete destruction.
   Constructive total loss occurs when the ship and/or cargo are totally damaged but retrieved.
2. General average
   This is a loss that occurs as a result of some of the cargo being thrown into the sea deliberately to save the ship and the rest of the cargo from sinking. The losses made are shared by the ship owners and the cargo owners proportionately as the effort was in the interest of both.
3. Particular average
   This occurs where there is a partial but accidental loss to either the ship or the cargo. When this happens each of the affected party is soldy responsible for the loss that has occurred to his property. A claim can, however be made if the loss incurred amounts to more than 3% of the value insured.

This type of insurance covers property damage or loss caused by accidental fire. Cover is offered to domestic commercial and industrial premises, plant and machinery, equipment, furniture fittings stock e.t.c

In order to claim for compensation as a result of loss by fire, the following conditions must be fulfilled; fire must be accidental, it must be the immediate cause of loss, and there must be actual fire.

There are several types of types of fire insurance policies as follows;

1. Consequential loss policy; (profit interruption policy) -This covers or compensates the insured for the loss of profit suffered when business operations have. It is offered to protect future earnings of an enterprise after fire damage.
2. Sprinkler leakage policy- This provides cover against loss or damage caused to goods or premises by accidental leakages from fire fighting sprinklers.
3. Fire and Related perils policy- This covers buildings which include factories, warehouses, shops, offices and their contents. The policy does not cover loss of profit arising from fire damage.

• It’s a contract of indemnity.
• It cannot be assigned even to ones relatives.
• The insured must have an insurable interest in the property to be insured.
• Premiums charged depends on the degree of risk, the higher the premium charged.
• Compensation for loss can only be upto a maximum of the value of the insured property or the sum insured in case of under insurance.
• It has no surrender value.
• It’s normally a short term contract which can be renewed periodically, usually after one year.

• Health of the person
• Frequency of occurrence of previous losses
• Extent of the previous losses
• Value of the property insured
• Occupation of the insured
• Age of the person or of the property in question
• Location of the insured(address and geographical location)
• Period to be covered by the policy
• Residence of the insured

• Filling a proposal form
• Calculation of the premium to be paid
• Issuing of cover note (Binder)
• Issuing of the policy

1. Notification to the insurer-The insurer has to be notified about the occurrence of any incident immediately.
2. Filling a claim form-The insurer provides the insured with a claim form which he fills to give details of the risk that has occurred.
3. Investigation of the claim-The insurer arranges to investigate the cause of the incident and to assess the extent of the loss incurred. The insurer is then able to establish whether the insured is to be compensated and if so, for how much.
4. Payment of claim-On receipt of the report of the assessor, the insurer pays the due compensation to the insured. (Payment of the compensation shows that both the insurer and the insured have agreed on the extent of the loss and the payment is the settlement of the claim).

In most cases, insurance is erroneously taken to be the same as gambling in that small amounts are contributed by many people into a common fund which later benefits just a few people. They are however different and their differences include;

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Here are some more interesting notes on insurance

• Insurance: Introduction - Form 2 Business Studies
• Principles and Classes of Insurance

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Other Form 2 Business Notes