Business Ventures: Securities

and Insurance
Name and Surname: Jayed Meyer
Grade:12JR
Elaborate on the meaning of non-compulsory
insurance.
• Non-compulsory insurance is optional; the insured has the option of
entering into an insurance contract.
• It is not required by law, but it can offer businesses and individuals
with protection.
•  It is taken out to shift the risk of something bad happening to the
insurance company.
• Theft, damaged autos, and damaged buildings/premises/injuries on
premises are examples of these dangers. 
Explain the following principles:
INDEMNIFICATION/INDEMNITY
• This is most common in short-term insurance, where the insured is
compensated for specific/proven harm/loss.
• In exchange for premiums paid by the insured, the insurer undertakes
to compensate the insured for the damages/losses indicated in the
insurance contract. 
• Protects the insured against the stated event.
• Insurance companies/insurers will only pay out if there is proof that
the stated incident occurred and the insured can show the extent of
the loss/damage.
SECURITY /CERTAINTY

• Refers to long-term insurance where the insurer promises to pay out a

set sum in the event of a death. 
• When the insured reaches a predetermined age or suffers an injury as
a result of an incident that is predetermined, a predetermined sum
will be paid out.
• The insured upon retirement or to the dependents of the deceased
with financial security. 
UTMOST GOOD FAITH
• When entering into an insurance contract, the insured must be
truthful in the information they provide.
• All material information must be disclosed by both the insurer and the
insured.
• Everything that could influence the scope of the risk must be
disclosed by the insured.
• Details and information provided should be correct and true. 
INSURABLE INTEREST
• The insured must demonstrate that if the covered object is damaged,
lost, or no longer exists, they will suffer a financial loss.
•  A financial expression of an insurable interest is required.
• In the contract, the insured and the insured object must be legally
related.