1. Insurance and Tax CH 12 Work out sums for Insurance and Tax
Principles of Insurance and the types of taxes
Household V Business aspects

2. Insurance
We can minimise risk through risk management e.g. install alarms
To minimise losses we take out insurances polices.
Insurance companies make a profit because they have many clients who don’t claim.

3. Principles of Insurance
Utmost good faith. Tell the truth when filling out insurance. E.g. I'm a smoker
Insurable interest: U owe the thing your insurance and you must benefit from it existing and suffer from its loss. E.G U can’t insure someone else's house.
Indemnity: You can’t profit from insurance. E.g. The current market value of the car as compensation only.

4. Average clause means that if you under insure an item you only receive the same fraction you insured it for.
E.G Claim x Amount insured for/How much its worth
Contribution: If you insure with two companies u still can’t make profit but only receive a fraction from each.
Same formula as above twice but replace below the divide with the total amount insured with all companies.

5. Subrogation: Means you only get compensation and not your item back when it has been recovered. Again you can’t make profit. The insurance companies can profit from the item recovered or the person who caused the accident to look for money back off them but you can’t. E.G a recovered or crashed car.

6. Question
List the principals
Explain the difference between each.

7. Ch 12 p220 Insurance a business should have Theft insurance
Public liability insurance; if someone slips on your premises
Product liability insurance: if claim cos prob with product. E.g maggots in nestle munchies
Employers liability insurance: employee injured at work
Plate glass insurance: window damage
Motor insurance - vans

8. Question
What types of insurances would you recommend for a business?

9. Forms P45 when sacked P60 for total taxes paid in year
P21 a balancing statement to show if u have over or under paid your tax
Form12a; when starting new job otherwise you pay emergency tax at 40% or more
PRSI is a tax goes for welfare

10. Q Explain the different tax forms.
Some go from employer and some go or are sent to the inspectors of taxes.

11. Insurance premiums
Amount you pay monthly to insurance company. The amount paid depends on;
Risk, Value of the item, Previous claims, How much Profit the insurance company wants, Taxes (2% stamp duty on premiums)
To work out premiums;
Buildings: Premium x Insured for/for every ? Of cover
Contents: Premium x insured for/ same as above

12. For Homework
Read and Revise this chapter from the book and have any questions that you need to ask ready for next week please.
Work out sums on premiums and any other sums on this chapter. Practise and revision makes perfect. Again note any questions or misunderstandings and ask me next day please.