Aids To Trade
Business Studies
Project Work
Tanmay Kukreja XI-D
INDEX
Acknowledgement
Introduction
History Of Insurance
Insurance Companies in India
Principles Of Insurance
Types Of Insurance
Benefits of Insurance to farmers
Terminologies used
Anecdotes of Insurance
Bibliography
Careers in Insurance
Bibliography
ACKNOWLEDGEMENT
This is to convey my sincere thanks and gratitude
to MS. PREETI MALIK who has provided valuable
suggestions and guidance for the fruitful
culmination of this project work.
She has extended all possible help and guidance
to enable me to understand and remember
important details of the project work that
couldn’t be possible otherwise.
This project has been completed successfully
only because of her help, motivation and
direction.
Introduction
Aids To Trade: Insurance
Aids to trade can be defined as the activities which
facilitate trade process such as Insurance, Banking,
Transportation etc.
These activities help in removing hindrances which
arise in connection with production and distribution of
goods.
Insurance helps in removing risk. Why and how?
Life is uncertain; there are no guarantees or
predictions about what happens in one’s life.
Similarly, Business also doesn’t have any
guarantee
As they may face unexpected losses or
damages in the long run.
Factory, Building, Furniture etc must be
protected against fire, theft and other risk.
Materials or goods held in stock or in transit
are subject to the risk of loss or damage.
Employees are also required to be protected
against the risk of accident and occupational
hazards.
Insurance provides protection in all such
cases.
WHAT IS
INSURANCE?
Insurance is generally defined as a contract
which is also called as Policy. An Insurance
Policy is a contract in which an individual or an
organisation gets financial protection and
compensation for any damages by the insurer
of the insurance company. In simple words,
Insurance is a form of protection from any
unexpected loss or damage.
The Person whose risk is insured is called
INSURED.
The firm which insures the risk of loss is known
as INSURER/ASSURANCE UNDERWRITER.
HISTORY OF INSURANCE
LLOYDS
Lloyds of London is a British insurance market
where members operate as syndicate to insure and
spread out the risk of different business
organisations and individuals. The syndicates are
specialized in different types of risks and each
syndicate decides which type of risk to insure.
The main purpose of Lloyd’s is to act as an
intermediary between clients, underwriters, brokers
and insurance companies.
DEVELOPMENT OF
REGULATORY
MECHANISM
IRDAI
The Insurance Regulatory and Development
Authority of India is an autonomous statutory body.
The IRDAI was constituted by IRDA act – 1999
Their main function was to regulate the insurance
industry of India.
For many years the insurance sector of India was
protected. The IRDA Act of 1999 allowed the entry
of private companies in the insurance. sector. It
also allowed for 26% investment by foreign
companies 49%. and further opened up the
insurance sector.
So, the Insurance Regulatory Development
Authority of India has a role to protect the
policyholders from any form of discriminatory
practices. They regulate all the insurance
companies. All companies have to approach the
IRDAI for registration certificated and they are
responsible for the renewal modification or
cancellation of these certificates.
FUNCTIONS OF IRDAI
AND ITS POWERS
Protection of the Policyholders in matters such as
assigning of policy, nominating members.
Make guidelines and provide training for the
appropriate code of conduct for insurance agents
and intermediaries.
They can also conduct investigations and audits of
insurance companies.
Regulation of rates, terms and conditions, etc that
the insurers offer their customer in the general
Insurance business.
The adjudiction of Matters and disputes of any kind
involving the insurance companies is also done by
IRDAI
Insurance companies
In India
The Insurance Industry comprises a total of 57
insurance companies in India.
For life Insurance there are 24 companies.
recognized by IRDA, similarly for Non life insurance
34 companies got the approval from IRDAI.
Life Insurance Cooperation of India is the only
reinsure public sector company among the life
insurers.
General Insurance cooperation is the only public
sector in India recognized by the Insurance
Regulatory & Development Authority of India.
And there are 6 public sectors insures among
various non-life insurance companies.
LIST OF FEW LIFE INSURANCE COMPANIES IN
INDIA
1)Life Insurance cooperation of India (Public)
2)HDFC Standard Life Insurance Comp. Ltd
3)Max Life Insurance Co. Ltd
4)ICICI Prudential Life Insurance CO. Ltd.
5)Kotak Mahindra Life Insurance Co. Ltd
6)Aditya Birla Sun Life Insurance CO. Ltd.
7)SBI Life Insurance CO. Ltd.
8)Reliance Nippon Life Insurance company
9)Shriram Life Insurance CO. Ltd.
10)Bharti AXA Life insurance CO. Ltd.
List of few non-life insurance companies
1)Aditya Birla Health Insurance (Private)
2)Agriculture Insurance company of India
(Public)
3)Bajaj Alliance General Insurance
4)Digit Insurance
5)The Oriental Insurance Company (Public)
6)Reliance general Insurance (Private)
7) National Insurance Company
8)Kotak Mahindra general Insurance
(Private)
9)United India Insurance company (Public)
PRINCIPLES OF
INSURANCE
The Principles of Insurance are the rules of
action or conduct adopted by the stakeholder
involved in insurance business.
To ensure the proper functioning of an
insurance contract, the insurer and the Insured
have to uphold the 7 Principles of Insurances.
They are:
1) Utmost good faith
A Contract of Insurance is a contract
of Werrimae Fidei i.e a contract found
on good faith. Both the insurer and
the insured should display good faith
towards each other in regard to the
contract.
It is the duty of the insured to
voluntarily make full accurate
disclosure of all facts, material to the
risk being proposed and insurer to
make clear all the terms and
Conditions.
Thus, it is binding on the prosper to
disclose all material facts about the
subject matter of the proposed
insurance.
2)INSURABLE INTEREST
The insured must have insurable Interest in the
subject matter. Insurable Interest means that the
subject matter for which the individual enters the
insurance contract must provide some financial
gain to the insured and also head to a financial loss
if there is any damage, destruction or loss.
To claim the amount of insurance, the insured must
be the owner of the subject matter both at the
time of entering the contract & time of accident.
3)indemnity
All Insurance contracts of fire and Marine Insurance
are contracts of Indemnity (Not Applicable on life
insurance).
The insurer undertakes to put the same position
that he occupied before the happening of the event
/ accident.
In other words, the insurer undertakes to
compensate the insured for the loss caused to him
due to damage or destruction of property insured.
The compensation payable and loss suffered are to be
measured in terms of money.
Principle of Indemnity isn't applicable on life
insurance.
4)PROXIMATE CAUSE
An Insurance Policy is designed to provide
compensation only for such losses as are caused
by the perils which are stated in the policy
When the loss is the result of two or more causes
the proximate cause means the direct, the most
dominant and most effective cause of which the
loss. natural consequence.
In case of loss arising out of any mishap, the most
proximate cause of which the loss / mishap
happened should be taken into consideration.
5)SUBROGATION
It refers to the right of the insurer to stand in the
place of the insured, after settlement of a claim.
After the insured is compensated for the loss or
damage to the property insured by him/her the
right of ownership of such property passes on
insurer.
This is because the insured should not be allowed
to make any profit; by selling the damaged the
case of lost property being recovered.
6) contribution
It is the right of an insurer who has paid claim
under an insurance, to call upon other liable
insurers to contribute for the loss of payment, as
per this Principle.
This implies, that in case of double insurance,
the insurers are to share the losses in proportion
to the amount of his actual loss assured by each.
In case of loss, when there is more than one
policy on the same property, the insured will
have no right to recover more than his actual
loss.
7)MITIGATION
It is the duty of the insured to take reasonable
steps to minimize the loss or damage to the
insured property.
Suppose goods kept in a store house catch fire
then the owner of the goods should try to
recover the goods & save them from fire to
minimize the loss or damage.
The insured must behave with great prudence
and not be careless just because there is an
insurance cover.
If reasonable care is not takin like any prudent
person. then the claim from the insurance
company may be lost.
TYPES OF INSURANCE
Broadly, Insurance is classified as :
1) Life insurance
The Purpose of life insurance is to provide the
relatives and beneficiaries of a deceased person
with some financial aid and help. It is a
protection against uncertainty of life.
Let's see how the system of a life Insurance
Policy Works:
The Policy Holder pays is generally paid on an
annual basis. The amount of this premium
depends on a variety of factor such as the health
of the policy holder, occupation, medical history,
and many such factors.
The insurance company pays the "sum assured"
to the beneficiaries of the policy at the death of
the insured, or at the end of the term.
The insured can also borrow money against his
own life Policy.
2) Fire insurance
Fire Insurance is a contract where the insurer, in
consideration of the premium paid, undertakes to
make good, any loss or damage caused by fire up
to the amount specified in the policy.
Normally, the fire insurance policy is for a period of
one year. It is to be renewed from time to time.
The Premium may be paid either in lump sum or
instalments.
A claim or loss by fire must satisfy this condition:
(i) There must be actual loss; and
(ii) Fire must be accidental and non-intentional.
3) Marine insurance
the insured for losses caused by damage to
Marine Insurance provides protection
against loss by marine pilis or purist of the
sea. things involved:
(a) Ship or hull insurance: since the ship is
exposed. to many dangers at sea, the
insurance policy is for indemnifying the ship.
(b) CARGO INSURANCE: The cargo being
transported have risk of theft, loss of goods
or on voyage. Thus, an insurance policy can
cover such. risks to cargo.
(c) Freight Insurance: If the cargo does not
reach the destination due to damage, the
shipping company does not pay freight
charges. Freight insurance is for reimbursing
loss of freight. to the shipping company.
OTHER
INSURANCE
1. HEALTH INSURANCE
It is a safeguard against rising medical costs.
2. MOTOR VEHICLE INSURANCE
It covers your vehicle from potential risks financially.
3. BURGLARY INSURANCE
It covers the loss of damages of household goods.
4. CATTLE INSURANCE.
It is a contract of against death of Animals.
5. CROP INSURANCE
A financial support to former in case of crop failure.
6. SPORTS INSURANCE
It covers a sportsmen’s sports equipment, personal
affects, legal liability & accident risks.
BIBLIOGRAPHY
Following books have been used to get an idea about
Insurance:
1) NCERT BUSINESS STUDIES BOOK
2) OSWAL BOOKS OF BUSINESS STUDIES
Following links have been used in completion of this
project:
1. Introduction: https://nios.ac.in
2. Lloyds of London: www.investopedia.com
3. IRDAI: www.business-standard.com
4. Principles of Insurance: www.toppr.com
5. Insurance Companies: www.godgit.com
6. Types Of Insurance: www.byjus.com
