meaning and examples of insurable and non-insurable risks

Meaning of insurable risks

These risks are insured by insurance companies. Insurance companies decide on the likelihood of an event and then decide if they want to insure the risk

Meaning of non-insurable risks

These risks are not insured by insurance companies as insurance cost/risks are too high/remains the responsibility of the business. The insurance company cannot calculate the profitability of the risk and therefore they cannot work out a premium that the business must pay.

Examples of insurable and non- insurable risks

INSURABLE RISKS

Examples
 Theft
 Fidelity insurance
 Burglary
 Money in transit
 Fire
 Natural
disaster/Storms/Wind/Rain/Hail
 Damage to/Loss of assets/vehicles/
equipment/buildings/premises
 Injuries on premises

NON-INSURABLE RISKS

  • Nuclear weapons/war
  • Changes in fashion
  • Improvement/changes in technology
  • Irrecoverable debts
  • Financial loss due to bad management
  • Possible failure of a business
  • Shoplifting during business hours
  • Loss of income if stock is not received in
  • time/Time that elapses between the
  • ordering and delivery of goods

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