Professional Documents
Culture Documents
Risk
The possibility of a financial loss.
Risk management
The process of managing a
businesss exposure to risk in order
to achieve business objectives.
Business risk
Economic Risks
Risks that result from changes in
overall business conditions. Examples
of economic risks include:
Competition More businesses that
would compete with your business open
in the area.
Changing consumer lifestyles The
lifestyle of the consumers in your area
changes due to new industry opening or
closing, new businesses, etc.
Natural Risks
Risks resulting from natural
causes. Examples include:
Floods
Earthquakes
Fires
Lightening
Droughts
Unexpected changes in normal
weather
Human Risks
Risks caused by human errors as
well as the unpredictability of
customers, employees, or the work
environment.
Employee theft
Robbery
Computer crime
Stolen credit cards and bad
checks
Accidents and injury
Emergency Planning
Businesses must:
create emergency response plans to
help handle emergency situations
more smoothly.
have procedures in place before a
crisis occurs.
INSURANCE ACT
IMPORTANCE OF INSURANCE
Provides protection against occurrence of
uncertain events.
Device for eliminating risks and sharing
losses.
Co-operative method of spreading risks.
Facilitates international trade.
Serves as an agency of capital formation.
Financial support.
Medical support.
Source of employment.
Types of insurance
Reinsurance
Risk
Extent of
liability of the
insurer
To whom
liable
Object
It is a method of assuring
the benefit of insurance.
It is a method of
reducing of the risk of
the insurer.
Life insurance:
Life insurance is a contract between the policy
owner and the insurer,
where the insurer agrees to reimburse the
occurrence of the insured individual's death or
other event such as terminal illness or critical
illness.
The insured agrees to pay the cost in terms of
insurance premium for the service. Specific
exclusions are often written in the contract to limit
the liability of the insurer, for example claims
related to suicide, fraud, war, riot and civil
commotion is not covered.
General insurance
Insuring anything other than human life is
called general insurance.
Examples are insuring property like house
and belongings against fire and theft or
vehicles against accidental damage or theft.
Injury due to accident or hospitalizationfor
illness and surgery can also be insured. Your
liabilities to others arising out of the law can
also be insured and is compulsory in some
cases like motor third party insurance