Business is depend on risk. Risks is the most familiar and easily understood by any one . It is the potential for losses of value through competition, mismanagement, and financial problem insolvency. There are a number of industries that are predisposed to higher levels of business risk.
The biggest action against business risk is the presence of franchise value. Companies that possess franchise value are able to raise prices to adjust for increased labor, taxes or material costs. The stocks and bonds of commodity-type businesses do not have this luxury and normally decline significantly when the economic environment turns south. Business do insurance for minimize the risks. Insurance don't complete remove risks from business. It only grantee to cover risks loss in some extent.
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