In commercial operations, insurance performs distinct functions that support trade and enterprise. Match each insurance role listed on the left with the practical commercial scenario on the right that best illustrates it.
- Collateral for business loansA merchant pledges an endowment life policy to a commercial bank to secure credit for business expansion.
- Risk pooling and spreading of lossesSmall premiums collected from thousands of firms form a reserve to compensate the few that experience fire destruction.
- Facilitation of foreign tradeAn exporting company purchases marine cargo insurance against perils of the sea to protect international shipments.
Cevap
Collateral for business loans matches with pledging an endowment policy for a bank loan; Risk pooling and spreading of losses matches with collecting premiums from many to compensate the few suffering fire destruction; Facilitation of foreign trade matches with securing marine cargo insurance for international shipments.
Using insurance as collateral security is shown when an endowment life policy is pledged to secure a loan. Risk pooling is shown when premiums from many traders form a pool to compensate the few who sustain losses. Facilitating foreign trade is shown when marine cargo insurance covers perils during ocean shipping.
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Anahtar Kavram
Role and Importance of Insurance in Business and Commerce