Insurance and Risk Management

Topics: Insurance, Investment, Economics Pages: 2 (694 words) Published: December 8, 2012
In some countries like India employees need to careful in choosing a suitable hospital that covers their treatment. One of the main costs is the room rent and employees need to be careful on choosing a specific room that matches the requirements in the policy in order to cover the individual. * limitations can make a significant difference when employees fall ill in a foreign country because if they fail to comply with the policy they will not be compensated for any of the treatment they receive and the policy would be of no use to the employees. The need for a good insurance market is necessary for a successful market and economy as it is proved with its worldwide presence. According to Dickson 1991, there are a number of advantages of insurance which include peace of mind, loss control, social benefits, investment of funds and invisible earnings. Insurance provides peace of mind to individuals and organisations as it takes away the risks associated with certain activities. This is vital to the daily operation of companies for example Insurance protects against issues such as, if a factory caught fire and all equipment and machinery were damaged or unsalvageable then the company may have to pay a substantial sum to get the business running again or claim bankruptcy. Insurance can help protect investments and may benefit the economy by efficiently managing a variety of risks can help organisations create new capital. Purchasing insurance facilitates the transfer of risks to an insurer. Insurance can also be used by existing businesses to diversify their risks to aid their business activities. With peace of mind the business can develop freely without having to hold reserves to cover operational or other risks inherent in their sector. In recent times the insurance company pools its funds to reducing the level and severity of risks. An example of this is when insurance companies pooled together to operate the first fire fighting services, this shows the loss...
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