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Insurance is a concept that most people are familiar with, but usually on a personal or individual scale. Having some sort of insurance policy is almost a must in today’s society, and many people are covered by several different insurance policies, each addressing different risks. What many people do not realise, however, is that insurance is just as important to businesses and companies as it is to individuals, or perhaps even more so, given that some businesses are worth many millions of dollars. It is important that a business of any sort be properly insured. In order to obtain insurance for a manufacturing or process business, it is first necessary to obtain a proper insurance valuations which recognize the terms of the insurance policy. The basic concept of insurance is that it is a way to share risk among a large number of people or entities. When you pay an insurance premium, you are effectively contributing to a pool of money. Then, if you need to claim on your insurance because of an accident or some other mishap, you then draw money from that pool that you contributed to. Statistically, enough money will go into the pool to cover the claims that are made as well as to provide some profit for insurance companies. In order for insurance to function properly, it must be attached to a particular object or asset with a value that can be identified. Identifying the value is important because it will determine how much the insurer much pay you in the event that you have a valid claim on your insurance, and also how much you have to pay the insurance company in terms of a premium each month. Without proper valuation, you might find yourself either under-insured or over-insured. When you are under-insured, the maximum sum that the insurance company is obliged to pay you in the event of a claim is less than the total possible value of that claim, such that you receive less than the amount of loss that you suffered. In some cases the insurance company may consider that you were a “self insurer” for the percentage of the loss for which you were under-insured and reduce even a small claim by that percentage. When you are over-insured, you will pay premiums that are higher than you should be paying considering the actual value of the insured asset, and if you do make a claim, you do not derive any benefit from the higher premiums because the asset will be valued at its replacement or indemnity value (depending on the policy,) and that is the amount that will be paid. Since insurance is big business, it is subject to rules and regulations in every country of the world. Governments need to control the manner in which insurance companies value things and also how claims are made and paid out in order to ensure proper functioning of the economy. As a business owner, you will need to meet certain specifications and regulations when you register your business for insurance, and it is important that you obtain proper insurance valuation so that you do not run afoul of the laws regarding insurance. You might also need machinery valuation as part of the overall insurance valuation process because it is important to ascertain the overall value of your business as a whole. Resource Box: Machinery Valuation : If you need Insurance Valuation for machinery, plant and equipment, you should not be satisfied with anything less than the best service in the business, which you will find only with RHAS.
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