REASONS FOR INSURANCE ,RISK ASSESSMENT AND INSURANCE TERMS .

What is insurance?

 Insurance is ,a legal contract that protects people from the financial costs that result from loss of life, loss of health, lawsuits, or property damage. Insurance provides a means for individuals and societies to cope with some of the risks faced in everyday life.

For example, you have insurance for your house in case it burns down. If that happens, you get money from the insurance company to house your family and rebuild (or replace) your home. You can purchase insurance for a wide variety of perils - fire, theft, natural disasters (floods, earthquakes, etc.), property damage, personal injury claims, and so forth.

Specialty Capital and Vendor Financing

                                                  Specialty Capital

This is the gold standard. There are a few sources of capital that have almost no economic cost and can take the limits off of growth. They include things such as a negative cash conversion cycle (vendor financing), insurance float, etc.

                   Negative Cash Conversion (Vendor Financing)

Imagine you own a retail store. To expand your business, you need $1 million in capital to open a new location. Most of this is the result of needing to go out, buy your inventory, and stock your shelves with merchandise. You wait and hope that one day customers come in and pay you. In the meantime, you have capital (either debt or equity capital) tied up in the business in the form of inventory.