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How does insurance protect your business?
Business is about taking risks in order to build wealth. However, there are some risks which you can avoid because you can foresee them and take preventive measures. But there are always other risks which are unpredictable, either of its occurrence or of the extent of damage. To protect your business from these unforeseeable risks, you need to share them with other businesses so as to minimize your loss just in case they happen to your business.
You share risks with others by first identifying the risks and the estimated extent of loss and then purchase the appropriate insurance to cover you for such risks and to the extent identified.
For those who choose not to insure, they are not sharing the risks with anyone. When a disaster strikes, they will have to bear all the losses alone.
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