Risk Management During Work Interruption

Insurance is economic and financial institution which functions in accordance with planning, economic, legal and technical bases and its aim is to provide coverage for any future needs of financial means. These needs have to be caused by harmful implications occurred against the will of the insured person and are independent and unpredictable in advance. For the insured person the insurance is an economical instrument which bears a very low cost (insurance premium) for an unpredictable financial loss that would exist if there was no insurance. The insurance is an economical instrument for lowering and eliminating the risk through a process of combining sufficient number of homogeneous exposures in a group, so the losses would become predictable for the group as a whole. The purpose of this paper is to show the main task of each 'risk management', i.e. to take all the measures in order to manage the pure risks and insure the events. Financial losses can be caused by variety of reasons and mostly by incorrect business decisions. However, they could also be caused by insuring different hazards to which the company is exposed because of the risk of fire, breaking of machines and earthquake, which can cause a stop in the process of production and sales and a complete stoppage of the work for a longer period. The stoppage of work, I.e. production and sales, can lead to losses of income. A reasonable management of the company which wants to achieve income even in situations like these will protect its interests by insurance.