19 Aug 2022

               Insurance can be defined as an agreement whereby one party promises to indemnify or pay another party a sum of money in the event of his suffering a specified loss or damages . It is also a system for providing financial compensation for the effects of loss, the payment being made from the accumulated contributions of all parties participating in the find or scheme 
The main principle of insurance is pooling of risk. The insurer will collect premium from a group of people who suffer similar risk to create a common fund out of which compensation will be paid to those who suffer losses. Compensation for victims will depend on the premium paid and the extent of losses suffered.
              Insurance is one of the aids to trade. Although it cannot cancel out the risk, it offers monetary assistance. A great variety of risk can now be covered by insurance. On the other hand, Assurance is the provision of cover against some eventuality which must occur at some time in the future, e.g .death of a person. It deals with events which must happen, hence it is based on possibilities.

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