Benefits of Insurance

The fact that the owner of the business has the funds available to recover from a loss provides a stimulus to business activity. It also means that jobs may not be lost and goods or services can still be sold. The social benefit of all this is that people keep their jobs, their sources of income are maintained and they can continue to contribute to the national economy. We all know the effects on the community when a large employer moves or ceases operation; the area runs the risk of being depressed, people have less money to spend and the consequences of this can be far reaching.

To a lesser extent, a major loss resulting in the closure of business can have the same impact on the community. It may not be as noticeable as the shutdown of a large factory, but when losses are aggregated throughout the country the effect is considerable. It is not suggested insurance alone keeps people in jobs, but it does play a significant role in ensuring that there are not unnecessary economic hardships.