Main role of insurance is in business. Because the role of insurance is more in risks and risks is always is in risks. Insurance generally mean to insure and protect from risks.
In business now a days it is so risky u donot know about is your business will work or not your goods is safe or not. it is common said that "More Risks More Profit" for earning profit you have to take a lot risk in business. you need to control risks or minimize that risks my doing insurance. like fire insurance for safety of good, insurance in transit for goods properly deliver. in account we take insurance in transit expense in cost of goods by adding it. that mean it is necesery in purchasing of goods. for goods safely deliver to its destination.
Risk is a part of human life and starts with life and continues till death. Risk refers to hazard, peril, chance of loss or injury. It implies the degree of probability of any type of loss. The risks human faces include death, accidents, fire , and business losses.Major risks cannot be fully eliminated or cannot be averted by individuals or indiividual corprations, but can be checked by shifting them to specialized groups known as insurance companines. The leading principle underlying insurance is pooling funds collected from a large number of people as premium out of which losses are made up for individual's looses. This underlying principle is refer to as law of average or law of large number. The law suggest that thousand of people or organization are insurance but only few meet the grief. This phenomenon make possible insurance business.By insurance certain types o risks can be cover including fire, property damages, burglry, accidents. Marine insurance is another branch of insurance which is consider which ships and their cargoes. It is undertaken by underwriters and general insurance companies. Still another branch is life assurance. It is of two type: (1) Endowment, and (2) Whole Life Assurance. In endowment policy is issued for fixed period of time. Whole life assurance calls, on other hand, for the payment of premium up until death. The insurance requires a person or a group of persons to pay a sum of money to another under the contract that is certain crimcumstances the second party will compensate for the loss sufered by first."NO RISKS NO PROFIT", as the popular saying goes. Business activities include risks. Element of risks is present more strongly in new businesses than the old-estabish one. Risks refers to chance 0f loss, injury or damage. It may be divided into the following catergories:1.Business risks2.Kinds of risks by insurance*Insurable risks*Uninsurable risks
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.
