Business insurance

Business insurance :-

Business is not free from risk of loss. Many businesses face risk but some of these suffer looses. The people at risk contribute some amount as premium to a common fund. The insurance companies use the fund in such a way that there is reasonable return on it. The efficient management is able to compensate the people who suffer losses. The insurance company can pool share and spread the risk of loss. Insurance is a service business and it is active in providing services to other business houses and general public. The people can do their business without any fear of losing property or earning power. Insurance is an incentive to them to take active part in the management of their business. The employment opportunities are created for those who want to adopt insurance as profession. The business of insurance is not limited to one country. The facilities are also provided to overseas traders. The companies are able to earn foreign exchange through the sale of insurance policy. The balance of payments becomes favorable due to invisible export surplus. The insurance business is the result of division of labour. The businessmen depend upon insurance companies for sharing the risk of loss while the insurance companies depend upon other businessmen for successful working.