Why Individuals And Businesses Need Insurance?
Insurance is defined as a contract between two parties. In this contract, the first party known as the insurer undertakes to pay the second party called insured, a fixed amount of money on the happening of a certain untoward event. To take the benefits of this service, the insured pays a fixed amount of money known as Insurance premium to the insurer.
Insurance helps you secure your life against financial losses. For instance, risk is involved while sending the goods through train or freight. In such a case, insurance provides the necessary financial cover to secure the losses you may have to bear if the good is stolen or destroyed or if it does not reach the destination at all.
Now having learned what insurance is, the next question that would arise in your mind is do I need insurance? And the answer is, yes, all of us need to safeguard and insure ourselves and our possessions from any damage or harm that may arise in the future.
Insurance is all about protection. It provides us with a cover for the risks that we run during our lives and protects us from the contingencies that could affect us.
The insurance policy that you invest in protects you against an unfortunate incident such as a car accident, a robbery, or an illness. Insurance can be classified as:
- General insurance: General Insurance comprises of insurance of property against fire, robbery and any other form of accidental damage to the property.
- Life insurance: This insurance is a contract that pledges payment of an amount to the person assured on the happening of an unforeseen event.
Just as you need to insure yourself against all risks and untoward instances, so does the organizations you work for. In today's competitive world the organizations need to take care of their most valuable assets, their human resources. Organizations can take care of their staff by providing them with good insurance policies, such as affordable health insurance, family insurance, and personal and financial insurances.
The Medical Insurance is the most popular insurance organizations invest in. The beneficiary of this insurance policy receives reimbursement of hospital expenses, medicines and consultation fees. Some such organizational health insurance policies also include the employee's dependents.
Another type of insurance the organizations can invest in is the Liability insurance. This insurance provides an insurance cover against damage of property or life leading to disability because of any action by your organization or its representatives. This type of insurance cover is also helpful in case an organization is faced with a lawsuit. Any person whose property is damaged or who faces an injury or a disability because of the actions of a company's employees' may file a lawsuit against an organization. In such a case, the financial and staff-time costs that need to be borne are heavy and therefore require a well-planned insurance cover.