Business Insurance

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Business Insurance

What is Business Insurance? Description


Business Insurance is a policy designed to protect businesses from loss exposures, in return for paying a premium to an insurance company.


Business insurance is a way of insuring firms to minimize the risk of financial loss due to unpredictable events. To receive this provision, companies have to pay a premium that can be monthly, quarterly or annual.

 

History of Business Insurance

 

The origins of business insurance date back to 2100 B.C. with the Code of Hammurabi. This Code provided coverage for merchants in case of loss or damages to their goods. 

British merchants were the first to underwrite formal insurance policies. When new companies were born, coverage for buildings, equipment and services appeared.

Business insurance reached popularity in the 17th century. Businesses obtained coverage against fire damage in London in 1667 and in the US in 1752.

Over time, accident policy, workers’ compensation insurance, burglary and theft insurance were designed. Insurance companies grew and businesses thought about the best ways to manage risks such natural disasters, death or injuries to customers or employees, hazards, theft, legal liability, automobile accidents.

 

What Business Insurance is Needed?

 

A company decides what kind of insurance it purchases depending on its needs, size and level of risk. To purchase a business insurance, the level and probability of risk should be analyzed to calculate the amount of coverage that is needed.

There are different kinds of coverage available to business owners. Each category of loss can be managed with a corresponding type of insurance. Sometimes several types of business insurance are combined in one policy.

 

Benefits of Business Insurance. Advantages

 

The main advantage of a business insurance policy consists of enabling / guaranteeing continuity of business operations.

Small companies have a greater need to be insured than larger companies. Small business owners could obtain protection for life savings, reduction of profits, or bankruptcy. Depending on the type of business insurance (see below), other benefits exist.

 

Decreasing the Need for Business Insurance

 

Small businesses may decrease their insurance rates by implementing safety measures and programs such as alarm systems.

 

Forms of Business Insurance - Business Insurance Types

 

A business insurance policy can be general or product-based. A product business insurance covers the safety of a company's products.

Other forms of business insurance are: Professional Liability Insurance, Business Interruption Insurance, Workers’ Compensation Insurance, Healthcare Insurance (specific for Corporations), Commercial Auto Insurance, Errors and Omission Insurance, Directors and Officers Liability Insurance, Commercial Property Insurance, and Environmental Insurance. Some of these insurance types can be mandatory in certain countries.


Business Insurance Forum
  How to Quantify Risks Indicators of Any Industry
What can be a valid methodology or technique to quantify the risks for a manufacturing as well as for a service firm?...
     
 
  7P Framework: Determining the Premium for an Insurance
Underwriting is the reconciliation of a risk price with reference to a standard price, which is commonly known as premium in insurance.
The 7 Ps of Underwriting for pricing or premium rating:
P1 Place (Geographical distribution of risk)
...
     
 
  7A Framework : The Organization of an Insurance Business
An insurance organization consists of the following components (7A Framework):
A1. Agency System (Agent, broking and distribution)
A2. Accounting System (Record keeping, cost disposal and management support)
A3. Actuary System (Assumpt...
     
 

Business Insurance Special Interest Group


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Best Practices - Business Insurance Premium

Expert Tips - Business Insurance Premium

Resources - Business Insurance Premium

Property and Construction Risk Management and Commercial Insurances

Presentation about risk management for properties and construction, covering various Commercial Insurances and Construction Contracts. The presentatio...
Usage (application): Risk Management, Construction Contracts, Commercial Property Insurance
 
 

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