MCS 3040 Chapter Notes - Chapter 28: Divisor, Personal Injury, Insurable Interest

• School: University of Guelph
• Department: Marketing and Consumer Studies
• Course: MCS 3040
• Professor: Joseph Radocchia

Document Summary

Insurance is the primary means of transferring the risk of various kinds of losses. Permits business to shift risk, through an insurance policy ( the insurer promises to compensate the person (known as the insured) should be contemplated loss actual occur. Insurer provides protection in exchange for payment, known as the insurance premium. Insurance can be costly and not always available. Important to remember: insurance does not prevent a loss from occurring, nor does it prevent the potential adverse publicity associated with a loss. Insurance policy = contract parties agree to what kind of loss i covered, in what amount, under what circumstances and at what cost. Main goal of insurance legislation: protect public from unscrupulous, financially unstable and problematic insurance companies. Provides working rules that create stability within the industry: life/disability insurance: provides payments on the death or disability of insured, property insurance (fire insurance): provides payment when property of the insured is damaged or destroyed through accidents.