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Insurance companies create a pool of funds to handle

Ronald Miller

in Business

1 answer

1 answer

Cynthia Baker on May 28, 2018

Insurance companies create a reserve of funds to handle uncertain loss.Insurance companies are in the business of taking risks on behalf of their clients in exchange for a fee. Thetransaction involves the insured assuming a warranty and known relatively small loss in the form of payment to the insurer in return for the insurer's promise to indemnify the insured in the event of a covered loss.

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