Observation

The expected responses to the question include:

4(a) Assurance and Insurance   
Assurance is taken to cover risks that are certain to occur while insurance is
taken to cover risks that may or may not occur. OR  In assurance, the assured
is compensated while in insurance the insured is restored to his former position
before the occurrence of the risk insured.
                                                                                     
4(b)    Insurable risks and non-insurable risks
Insurable risks are risks that have statistics that can be collected to calculate the probability of occurrence of risks while non-insurable risks are risks that have no statistics on which their estimation can be based.

4(c)    Compensation and premium

Compensation is the amount of money which the insurance company pays to the insured on the occurrence of the event while premium is the amount of money paid periodically by the insured to the insurer for the cover.

4(d)    Comprehensive and third party policies

Comprehensive insurance covers damages to owner’s vehicles, passengers, passers-by and other vehicles involved in the accident while third party insurance covers damages caused to others by the insured.

4(e)    Fidelity guarantee and consequential loss

Fidelity guarantee is taken by firms against possible loss of money through embezzlement or misappropriation of funds by fraudulent employees in position of trust while consequential loss is the insurance taken against loss of income arising from disruption of the operation of business as a result of fire out break or natural disaster.