Insurance is a contract in which an individual or entity receives financial protection or compensation from an insurance firm in the form of a policy. The firm pooled the risks of its clients to make payments more reasonable to the insured.
What is the meaning of insurance in business studies?
Insurance can be defined as the practice of providing protection against any risk that could result in the loss of life, the destruction of a business, or the loss of personal property.
What is insurance simple words?
Insurance is a legal and economic term. It is a product that people purchase in order to prevent themselves from losing money. Insurance buyers pay a “premium” (typically paid monthly) and vow to be cautious (a “duty of care”). In exchange, if something bad happens to the insured person or item, the firm that sold the insurance will reimburse the money. (However, in other cases, such as if the person was not careful, the corporation may not be required to repay the money.)
What is insurance class 11?
1. The Service Industry Commercial firms engaged in banking, communication, transportation, insurance, warehousing, and other services make up the service sector. The service sector provides the essential infrastructure required for effective corporate operations.
2. Services Provided
3. Service Types or Classification
I Professional Services Business services are those that are utilized by businesses to make their operations run more smoothly, such as banking, insurance, transportation, warehousing, and communication.
Social Services (ii) Social services are provided freely in order to fulfill societal goals.
Personal Services (iii) Various consumers have different experiences with personal services. These are determined by the needs and desires of the customer. Tourism, restaurants, and so on are examples.
4. Different Types of Business Services
5. Investing A bank is a financial entity that accepts deposits in order to lend money to industry or trade.
The Indian Banking Regulation Act of 1949 states that “Accepting money from the public for the purpose of lending or investing” is what banking entails.
Commercial Banks I The Indian Banking Regulation Act, 1949 governs and regulates commercial banks, and it defines banking as “accepting deposits from the public for the purpose of lending investment.”
Cooperative Banks (ii) These banks are supervised by the state Co-operative Societies Act and were established to provide loans and advances to their members on favorable terms.
Specialized Banks (iii) These banks were established to meet the demands of certain industries and export units. Foreign exchange banks, industrial development banks, export-import banks, and other institutions exist.
Central Banks (iv) The central bank of any country is regarded as the banker of banks because it governs and supervises the activities of commercial banks.
6. Commercial Bank Functions Commercial banks’ primary responsibilities include:
I Deposits Collection Commercial banks are distinguished by the fact that they take deposits from their customers. The most popular deposit types accepted by banks are:
(ii) Funds Lending The commercial bank will use the money it receives in deposits to make loans and advances. These advances can take the form of overdraft cash credit, among other things.
(iii) Cheque Acceptance The banks collect cheques written on other banks for their customers. Clearing houses are used by banks to collect checks.
(iv) Agency Responsibilities Clients’ insurance premiums are paid by the bank on their behalf. The bank also collects divided premiums, interest, and pensions, among other things.
Allied Services (v) Aside from the aforementioned responsibilities, the bank also provides ancillary services such as bill payment, locker facilities, and so on.
e-banking is number seven. Internet banking refers to the ability for anybody with a computer and a browser to connect to a bank’s website and perform virtual banking functions or use any of the bank’s services.
I E-banking is available 24 hours a day. The bank’s customers are served 365 days a year.
(ii) Customers can conduct some of the permissible transactions from the comfort of their own home or office.
Insurance is number eight. Insurance is a contract between an insurer and an insured in which the insurer agrees to compensate the insured in the event of a loss in exchange for a recurring payment known as a premium.
9. Insurance Types
Life Insurance I It can be characterized as a contract in which the insurer provides a lump-sum payment or other recurring payments in exchange for a specific premium. agree to pay the assured or the person for whom the policy is purchased. There are two sorts of hazards that are associated with life insurance.
(a) Policy for the Rest of Your Life The insured sum is only paid out if the insured dies, which implies the insurance will last for the rest of the assured’s life.
(b) Policy of Endowment Life Assurance The insurer pays a specific amount when the person dies or reaches a certain age under this insurance.
d) Joint Life Insurance Policy Two 01 more people sign up for this policy. The premium might be paid jointly or in installments by any of them.
Annuity Policy (d) The assured sum or policy a particular amount of money is payable after the assured reaches a specified age in monthly installments under this policy. half-yearly. quarterly
f) Policy on Children’s Endowment A person purchases this policy for his or her children in order to cover the costs of their education or marriage.
(a) Insurance against fire Fire insurance is a contract in which one party undertakes to compensate the other for financial losses in exchange for a fee.
Marin Insurance (b) A contract between the insured and the insurer is known as marine insurance. Cargo owners, ship owners, and fright receivers are all possible insureds.
Communication Services (10) The exchange of ideas, viewpoints, or messages between two or more people is referred to as communication.
William H Newman claims that “Communication is defined as “two or more people exchanging facts, ideas, opinions, or feelings.”
Postal Services (nine) Postal services are provided by the government on a national and international basis.
(b) The postal service operates on both a national and international scale.
(c) To compete with courier services, post offices began offering rapid post services.
Telecom Services (12.) Every company operation relies on telecommunications services. Every commercial activity will be a pipe dream if Telecom service is not available.
13. Getting Around It refers to the actual transportation of commodities from one location to another. Freight services are included in transportation.
Transportation services are required to bridge the gap in location between the production and the consumer.
14. Warehousing and Distribution Services Warehousing is the process of storing and preserving products from the time they are manufactured or purchased until they are sold or used.
What is insurance for business called?
Business Insurance: What You Need to Know For their small business insurance needs, many business owners begin with a Business Owner’s Policy (BOP). It incorporates three crucial protections: Insurance for general liability. Property insurance for businesses. Insurance for business revenue.
What is the purpose of insurance?
The transfer of risk is the most basic function of property/casualty insurance. Its goal is to lessen financial risk and make unintentional loss more tolerable. It accomplishes this by paying a professional insurer a small, predictable feean insurance premiumin exchange for the assumption of the risk of a significant loss and a guarantee to pay in the case of such a loss.
What do you mean by insured?
Any person or business legally eligible to receive the benefits of an insurance policy, mainly claim payments, is referred to as insured. Following a covered loss, damage, or injury that qualifies for payment under the policy’s terms, insurers make payments to insureds.
This could involve damage to the named insured’s (the individual who bought the policy) or a third-property. party’s
What are the 3 main types of insurance?
In India, insurance can be split into three categories:
- Life insurance is a type of insurance that protects you from Life insurance, as the name implies, is insurance for your life.
- Health insurance is a need. Health insurance is purchased to cover the costs of expensive medical treatments.
What are the importance of insurance to business?
Businesses require commercial insurance to assist cover the costs of property damage and liability claims. Without commercial insurance, a company’s owners may be forced to pay for costly losses and legal claims out of pocket.
What are the 4 types of insurance?
Fire, floods, accidents, man-made disasters, and theft are all covered by general insurance for your house, travel, automobile, and health (non-life assets). Motor insurance, health insurance, travel insurance, and home insurance are all examples of general insurance. A general insurance policy compensates the insured for losses sustained throughout the policy’s term.