It is originated from the Babylonian civilization through the code of Hammurabi dynasty in the year of 2100 B.C followed by Roman’s and Greek traders. The first Insurance Company was established in London Lloyd’s Coffee’s house. Insurance is a scheme of economic co-operation by which members of the community share the unavoidable risks. The risks which can be insured against include fire, the perils of sea, death, accidents and burglary. Insurance can be defined as a legal contract between two parties whereby one party called the “Insurer” who undertakes to pay a fixed amount of money on the happening of a particular event, which may be certain or uncertain. The other party called the “insured” pays in exchange a fixed sum known the “premium”. The document which embodies the contract is called the “policy”. The insurance industry till the 90’s had only two nationalized players and they are Life Insurance Corporation (LIC) and General Insurance Corporation (GIC). Today there are 12 life insurance and 11 general insurance companies operating in India. Insurance agrees to give full compensation to the insured party against any actual loss or damage involved in business. Traders and businessmen can transfer their risk to the insurance company by entering a contract of insurance. |