taxud/2414/08 - European Commission - Europa

Rather, the underwriter considers the size and turnover of the group, and the financial
strength of the group. Contract provisions will attempt to exclude the possibility of
adverse selection. Group life insurance often has a provision that a member exiting the
group has the right to buy individual insurance coverage. Another substantial risk
covered by such policies is that of longevity of a person;
(2) sickness disability and unemployment insurance
Such policies insure against other life risks such as sickness disability and unemployment
and cover against the possibility of being unable to work. The self-employed, in
particular, may choose to protect against the risk that illness or disability may make it
impossible for them to earn their living. Such policies are commonly known as
permanent health insurance or income protection;
(3) health insurance
Such policies cover the cost of private medical treatments where other programs do not
pay for them or result in quicker health care where better facilities are available. In some
circumstances a cash payment is made. Such insurance can be rather general but also
cover specific health risks such as workers' compensation insurances, replacing all or
part of a worker's wages lost and accompanying medical expense incurred because of a
job-related injury;
(4) peril insurance, including coverage against fire, flooding, natural disasters,
accidents, breakdown of machinery, crime and terrorism
They cover some of the most substantial risks for economic operators and consumers.
Such policies can target fire, water or even snow risks as well as natural disasters like
earthquakes or flooding, accidents like nuclear incidents, accidents of means of transport,
transport or travelling accidents or and crime risks such as vandalism, theft, fraud,
forgery or terrorism. They may include breakdown of machinery or means of transport;
(5) liability insurance
These are policies covering legal claims against the insured which usually constitute a
substantial risk. Many types of insurance include an aspect of liability coverage. The
range of liability risks can reach from a homeowner's insurance policy provide liability
coverage which protects the insured in the event of a claim brought by someone who
slips and falls on the property to environmental liability risks protecting the insured from
bodily injury, property damage and cleanup costs as a result of the dispersal, release or
escape of pollutants or professional liability insurances protecting professional
practitioners such as architects, lawyers, notaries, doctors, and accountants against
potential negligence claims made by their patients/clients. Such professional liability
insurance may take on different names depending on the profession. The protection
offered by a liability insurance policy can be twofold: a legal defence in the event of a
lawsuit commenced against the policyholder and indemnification (payment on behalf of
the insured) with respect to a settlement or court verdict. Liability policies typically
cover only the negligence of the insured, and will not apply to results of wilful or
intentional acts by the insured;
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