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Showing posts from November, 2011

Physical Hazard

Physical hazard is the condition of any property, which increases the chance of loss. For example, if you buy an old grass thatched wooden house, the wooden walls and the grass roofing are physical hazards that increase the chance of fire. If the braking system in your car is defected and a result of this, you fail to bring, the vehicle to a halt, and collide with another car, the defective brake is a physical hazard while the collision is the peril or cause of loss. Physical hazard can be controlled by eliminating those physical properties that can increase the chance of loss. Examples of  physical hazard  can be: Fire , Explosion, Chemical Radioactivity


Let's talk about different types of Hazards.  There are different types of hazard. The 3 most important types are: ·          Physical Hazard ·          Moral hazard ·          Morale Hazard

The Definition

PERIL Peril is the thing that causes loss. So peril is the cause of a loss. For example, if your book is stolen, then we say that the peril or cause of the loss of the book is theft. The peril here is the theft. If a severe draught brings about agricultural failure, then we can say that the peril or cause of scarcity of food is the draught. The peril here is the draught. If your house is destroyed by fire, then we say that the cause of the loss of the house is fire. If you car is destroyed in an accident, then we say that the cause of the loss of the car is accident. HAZARD Hazard is the condition that created or increases the chance of loss arising from a given peril. For example, storing petroleum in the kitchen is a hazard, which increases the chance of loss from the peril of premature death.


Peril is different from the term Hazard. Also, the two terms are different from the term risk. They are not the same things as risk. However, the terms peril and hazard are very often used interchangeably with each other and with risk.


Peril is different from the term Hazard. Also, the two terms are different from the term risk. They are not the same things as risk. However, the terms peril and hazard are very often used interchangeably with each other and with risk.

OFF BEAT: Man says Playboy mansion favors women, files class action lawsuit

Is the Playboy Mansion unfair to men? That’s the assertion in a class action lawsuit filed against the Playboy facility in the Holmby Hills area of Los Angeles, according to news reports. Steve Frye is unhappy because at the annual Leather Meets Lace function, he says women were not required to pay the $1,000 price of admission. He is claiming sex discrimination and has filed a lawsuit seeking class action status on behalf of the men who paid the large admittance price. In fact, according to a news report, female guests who were not deemed up to Playboy beauty standards also were charged the $1,000. Playboy Enterprises International Inc., which owns the grounds, claims it did not set the admission price, and only rents out the mansion to others. The party, which took place Oct. 1, was a charity event benefiting ex-playmate Jenny McCarthy’s Generation Rescue for Autism Awareness, according to another news report. The lawsuit states that the preferential treatment “promotes harmful, nega

Cost of Solvency 2 rules for SA life insurers ‘a shock’

THE cost of Solvency 2, the new regulatory framework for life insurers in Europe and the UK — which will be implemented in SA by 2014 — has come as a shock to company boards. This was according to Deloitte vice-chairman and partner Louis Jordan, who was on a visit this week to brief the accounting firm’s South African life insurance clients about the effect of Solvency 2 so far in Europe, prior to its implementation by end-2012. London-based  Old Mutual  indicated earlier this year it would be allocating about £100m towards the implementation of Solvency 2, which Jordan said was similar to that of other insurers. Historically, SA’s life insurers have been early adopters of regulatory change emanating from the UK and Europe. They will represent a “second wave” of firms to adopt Solvency 2. SA’s Financial Services Board has already set up working groups to establish the regulations for implementation in 2014. The overhaul is well under way in Europe. Existing solvency rules for life, non


R isk can be defined in different ways. This is also because every human activity is associated with risk and everyone defines risk in the light of his own peculiar experience. A definition of risk, which is acceptable to one class of people, may not be acceptable to another class of people. So there is no single universally accepted definition of risk.    For example, risk has been variously defined of risk. 1         Risk is the chance of loss 2         Risk is the ability of loss 3         Risk is the deviation of actual result from the expected 4         Risk is the ability  of any outcome being deferent from the expected out come 5         Risk is the condition in which a possibility of loss is exists 6         Risk is the uncertainty of loss For our purpose, we can define risk as uncertainty of loss. That is risk is the uncertainty of loss. This is a simple definition of risk


R isk is the fundamental problem which insurance deals with. We are all living in a world of risk. Everything around us confronts us with its own measure of risk. Every activity we mentally or physically engaged ourselves in – has its own inherent measure of risk; every scientific or technological invention creates its own peculiar type of risk. For example, any one who is travelling in a motor vehicle is exposed to the risk off motor accident. Anybody who indulges in reckless sexual relationship, with an opposite partner runs the grave risk of contracting AIDS and in addition the girls/women runs the of unwanted pregnancy. Anyone who builds a house runs the risk of the house being burnt down by fire of illness and possible loss of income. Everyone runs the damaging property belonging to other people or even injuring other people. If any of these events occurs, we shall suffer great pain, possible loss of materials. Therefore, these risks threaten our     real existence and financial w

Purpose of Insurance

The primary purpose of insurance is to spread the financial losses of insured members over the whole of the insuring community be compensating the unfortunate few from the fund contributed by all members. It is important to know that while insurance exists to fight or combat risk, there are some commercial, legal and moral issues to consider which may make it almost impossible to insure every risk. To contract insurance, therefore, you must ensure that the following essential elements exist: §   Insurable Interest §   Financial value (not sentimental Value) §   Large number of similar risks §   Must know the mathematical value of risk or loss §   Loss must not be catastrophic §   Loss must be reasonable expected §   Loss must be accidental or Fortuitous in nature §   Loss must be consistence with public policy

The Concept of Insurance

The concept of insurance is simple, to protect oneself or another person against the loss money, life, goods, etc. It’s in an agreement or contract to pay money especially in case of misfortune such as accident, illness or death, examples, in motor and life insurance business and also in ordinary commercial contracts. Many eminent insurance scholars have defined insurance in different ways which are too numerous, though there is no consensus definition to date One interesting definition however, is the one which states that Insurance is the business which exists for the survival of other businesses. Insurance therefore is defined as a contract whereby one person, called the insurer, undertakes, in return for the agreed consideration, called the premium to pay another person, the insured, a sum of money or its equivalent, on the happening of a specified event. Simply stated, this is the thing or liability of the property which the customers insures or wishes to insure, example in fire

Why Insurance

All of us have been through difficult times before. Take a moment and look at the people in your life such as: family, friends, classmates and colleagues.  With each, you must have shared good times as well as bad times. In good times we usually feel like stopping the hands of time so that such moments of our lives could continue forever.  In bad times, however, we are easily raffled and shaken by the hardships and hard times associated with it. Man, therefore, aware of his endowments and limitations has always been eager to discover methods and ways of helping himself live a more successful and happy life, since he cannot run away from the hardships and problems of existence. It isn’t that we are looking for a hard life. But when difficulties come despite our best efforts, it could be an indication to look on the other end of the scale, hence Insurance .