INSURANCE.docxVIP

INSURANCEDefinition:Insurance is paid to people or companies so concerned about hazards that they they have made prepayments to an insurance company.Insurance is the equitable transfer of the risk of a loss, from one entity to anther in exchange for payment. Insurance is an arrangement in which you pay money to a company, and they pay you if something unpleasant happens to you, you do it to protect yourself in case the unpleasant thing happens. The?transaction?involves?the?insured?assuming?a?guaranteed?and?known?relatively?small?loss?in?the?form?of?payment?to?the?insurer?in?exchange?for?the?insurers?promise?to?compensate?(indemnify)?the?insured?in?the?case?of?a?financial?(personal)?loss.?The?insured?receives?a?contract,?called?the?insurance?policy,?which?details?the?conditions?and?circumstances?under?which?the?insured?will?be?financially?compensated.Background: Ocean Marine Insurance is the oldest form of insurance, probably dating to the Middle Ages. The organization of Marine Insurance took great steps forward with the formation and development of an insurance market on Lombard Street in London, England and subsequently—since 1769—Lloyds of London.Today, Lloyuds still plays a prominent role in Marine Insurance.?The first American insurer was Insurance Company of North American (CNA) formed in 1794. It’s one of the companies that writes insurance for David G.Sayles InsuranceServices. CNA has oprated continuously since that time, and remains an important market for marine as well as other forms of property and casualty insurance.Principles:Insurance?involves?pooling?funds?from?many?insured entitiesto pay for the losses that some may incur. The insured entities are therefore protected from risk for a fee, withthe fee being dependent upon the frequencyand severity of the event occurring. In order tobe an insurable risk, the risk insured against must meet certain characteristics. Insurance as a financial ?intermediary?is?a?commercial?enterprise?and a major part of