Reducing risk through insurance
Corporations can purchase insurance as a means of reducing their risks. What are the primary limitations on the extent to which insurance can reduce the risks faced by a corporation?
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Insurance is generally utilized as a hedge against unforeseeable consequences, such as fire, accidents, disasters, etc. Corporations, depending upon their line of business, can invest in a number of insurance vehicles to mitigate various risks - this includes standard disaster and government-mandated insurance, such as commercial automobile liability and workers' compensation insurance, but also extends to voluntary coverage such as commercial multi-peril, ocean marine coverage (if engaged in shipping), medical malpractice (if in the health services industry), product liability insurance, professional liability insurance (including extending to ...
Solution Summary
Insurance is generally utilized as a hedge against unforeseeable consequences, such as fire, accidents, disasters, etc. Corporations, depending upon their line of business, can invest in a number of insurance vehicles to mitigate various risks. This response details many of these ways.