Menu

Risk Management

Risk Management
320
com_k2.item
(0 Reviews, 0 out of 5 Stars)
Risk Management0 out of 50 based on 0 voters.


Risk management is an important aspect that should be embraced by all. Insurance should be taken for risks because no one knows when a crisis will occur. It is not wise to be caught unawares. Take Insurance it helps manage the risks. There are many risks that people and their properties are prone to. These include accidents, illness, death of the bread-winner in the family, theft, natural disasters such as floods and earthquakes and also economic risks such as inflation. These risks when they occur cause financial hardships, loss of income, loss of assets and property. Insurance companies cover the uncertain loss caused by these risks to ease the financial burdens. The risk of loss is transferred from the insured person to the insurance company. The insurer which is the insurance company assumes these risks and undertakes to compensate the policyholder when loss arises due to the risks detailed in the policy for a fee. 

There are benefits which are paid to the policyholder or beneficiaries when the loss known as the event happens. As a result the insurance company charges a premium (fee) which is paid by the policyholder. The greater the risk the more the premium charged. The premiums can be paid monthly, quarterly or annually depending on the contract. Insurance companies pool the premiums of each risk into an account therefore spreading the risk to a large number of policyholders who share the insured risk. The burden is spread to many policyholders. This means that when different people buy the same policy the money is pooled into one fund which is managed by the insurance company. When one of the beneficiaries experiences loss due to an insured risk he is paid from this fund when settlement is done. There are different types of insurance for different risks.

- Auto insurance covers damage and theft of the vehicle
- Property insurance protects businesses against loss due to damage and theft
- Health insurance protects against medical care
- Home insurance is taken by homeowners to protect their homes
- Disability insurance against disability
- Workman's Compensation for injury to workers
- Life assurance is paid to dependants after the death of the policyholder
- Flood, earthquake insurances protect against these natural disasters
- Others are crop insurance, education, mortgage, marine, sickness insurance among others

Property insurance covers many properties including home insurance, flood, earthquake, landlord, boiler, marine, aviation, volcano, hurricane, builder's risk insurance and others. Insurance is sold by company representatives, agents or brokers. The insurance risks are known as perils or events. A claim is completed and submitted to the claims department. Adjusters, appraisers, examiners, investigators and expert witnesses are involved in determining the settlement to be paid to the claimant. Policies have certain perils, conditions and circumstances which are not covered by the policy known as exclusions.

The policy must be read carefully before signing to avoid future disappointments. The terms and conditions should be read thoroughly. Questions should be asked and clarifications sought.
  

Last modified onWednesday, 03 April 2013 05:50
More in this category: « Surety Appraisers »

Leave a comment

Make sure you enter the (*) required information where indicated. HTML code is not allowed.

back to top