Insurance is a way of protection against financial loss. It is also a type of financial risk management, mainly used to offset the threat of an uncertain or contingent gain. The main aim of insurance is to provide compensation to the insured for the risks undertaken by him in behalf of the insurer. Insurance companies are usually governed by the Insured Financial Products Regulations, which set the rules and regulations for providing insurance. This body was created by the Financial Services Authority, as part of the FSA (Financial Services Authority) Act 2000. Insurance companies must register with the FSA and comply with its rules and regulation before being able to offer insurance products. Checkout Wilkinson Insurance for more info.
Marine insurance and yacht insurance are two main categories of insurance, although there are other specialized categories of insurances. Insurance for vessels is mainly for loss of or damage to the vessel while in use. yacht insurance provides coverage for damage to the insured’s boat and for third parties involved in an accident on or near the yacht. The main purpose of marine insurance is to protect against incidents like accidents involving damage to the vessel or its crew, sinking or explosions that might occur while the yacht or ship is in use. Insurance for marine perils is another important category of insurance, which protects ships and yacht against events like collisions with another ship or a merchant vessel, fires caused on board, and acts of nature like floods, hurricanes, and storms.
One of the primary methods of identifying high-risk individuals or organizations is by using the Adverse Selection criteria, which are used to evaluate the ability of an insurer to compensate for the potential losses that may occur. An Adverse Selection occurs when an insurer is unable to make a sufficient payment when an insured event takes place. For instance, if an insurer is required to pay a very high sum as compensation for a medical expert who becomes ill and dies during the course of an airplane flight, the plane could be deemed to be a high-risk enterprise because of the high cost of treating him. Similar principles could be used to assess other businesses, such as automobile insurers. Because of the complicated interplay of the laws of the different states, different insurers will often apply the same standards of Adverse Selection in assigning premiums.