ECONOMICS
INSURANCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Insurable risks are risks that insurance companies will cover. These include a wide range of losses, including those from fire, theft, or lawsuits. When you buy commercial insurance, you pay premiums to your insurance company. In return, the company agrees to pay you in the event you suffer a covered loss.
Detailed explanation-2: -Answer: The statement is false.
Detailed explanation-3: -Generally, business risks are not insurable. A characteristic of business risks is that the loss or damage is in nature a ‘pure financial loss’. This may be defined as a loss for which it does not involve damage to physical property but only results in financial losses. Insolvency is an example.
Detailed explanation-4: -There must be a large number of exposure units. The loss must be accidental and unintentional. The loss must be determinable and measurable. The loss should not be catastrophic. The chance of loss must be calculable. The premium must be economically feasible.