Operating in a competitive industry is likely to be challenging because of the dynamics that are prevalent in the market. Hazard and risks are shared experiences that businesses encounter on their daily operations. However, the most important thing is to understand both and to have the technical and theoretical knowledge to go about and handling them. In many cases, businesses make losses because of their poor ways used when dealing with hazards and risks that are common in the organization. Interestingly, hazard and risk sound as synonyms hence one can probably think that there is no difference between the two. Fundamentally, there exist a difference in these terms and a hazard entails the possible dangers that a business is exposed to as it undertakes its operation. On the other hand, risk refers to the probability of the hazard to occur. In this case, it is important to analyze and assess that risks that an organization is exposed to in the market. This is one way of preventing losses and ensuring that the business remains a continuous entity for the near future. This paper entails a discussion on hazard and risk assessment that is experienced in the insurance companies.
Insurance companies play a significant role in the market by ensuring that business is taken care of, and there is compensation to those that have acquired policies on their property. In addition, the government has insisted that companies should cover themselves to ensure that they can get back into business whenever they experience problems associated with the hazards and risk prevalent in the market (Ericson, 2005). In this case, the field of insurance entails some of the businesses to take mandatory covers of their activities, which are recommended by the government. On the other hand, businesses have the free will of taking any other cover that it may need or feel is necessary. In this case, there are some hazards and risks associated with the insurance industry as the companies often fear to make losses or low proceeds from their businesses and to come up with ways to counter them in case of any misfortunes that might occur
The hazards that a business is exposed to often is associated with a particular risk. It is prudent to study some of the possible dangers and the risks that are likely to affect the business. Property and loss back up plans confront many sorts of threats, known as exposures. Exposures exist for a wide range of protection that is given by a particular kind of insurance agency. The most widely recognized sorts of dangers incorporate paying cases for car crashes and tempest harm to a residence or property (Ericson, 2005). Insurance agencies can deal with the dangers that are safeguarded by barring certain sorts of scope from a policy. Insurance organizations’ essential goal is to pay assets and to gain a benefit. This can be refined by tolerating just certain sorts of business that have a low-to-medium possibility of encountering a misfortune that will bring about a case. The most well known types of approaches property and loss guarantors issue are vehicle and mortgage holder’s strategies. Insurance agencies will pay for legitimate cases that have not been prohibited by the policy. Insurance organizations are additionally worried about perils that exist which can expand the shot of a misfortune happening or because more harm than anticipated.
Insurance agencies mull over dangers when deciding expense and qualification for an approach. Perils can incorporate the sort of wiring utilized as a part of a house when deciding danger of misfortune because of flame (Popov, Lyon, & Hollcroft, 2016). Smoking is additionally a danger while deciding blows for a medical coverage or extra security approach. Insurance agencies that ascertain the sum and kind of hazard to guarantee must comprehend the dispersion of conceivable misfortunes. Some troubles inside a particular period are known as the recurrence of misfortune. Notwithstanding misfortune recurrence, insurance agencies are additionally worried about the seriousness of misfortunes. Misfortune seriousness is regularly the sum that a backup plan pays out for an advantage or a claim. Insurance organizations have different techniques to adjust or deal with their measure of hazard while giving protection scope. The most widely recognized way insurance agencies oversee hazard to avoid particular sorts of scope from a strategy (Popov, Lyon, & Hollcroft, 2016). Avoidances are made for dangers that an insurance agency does not have any desire to cover. These can incorporate heat conditions or activities of a guaranteed, for example, carelessness. In this regard, the severity is marginal; the probability is probable, while the risk code is medium.
In this regard, each hazard has its associated risks that may affect the business to a certain extent. The primary worry of the companies is that instance when a business can experience numerous compensation cases. However, this can be avoided by enlightening the public on safety measures that could help them counter the situation. One of the most common ways that is used by the organization is to take a cover on themselves that will enable them recover the losses that they might experience. Certainty entails anticipating an event and doing so with solid counter-measures.