As the name suggests, stock Insurance is generally defined about taking insurance to protect stocks. Also, stock insurance is needed to cover for the costs that you need to pay for the damaged, stolen and lost stocks. Moreover, do note that the coverage can be added as an extension to your business contents policy. The cost of your policy will depend on the value and amount of stock insured, while any insurance payout will be based on the stock price of the item, not the retail price.
Though, it is true that Hazards can come at any time without any kind of signals or warnings. However, it is very much important for all of us to take the right precautionary measures in order to ensure that you are prepared well enough to face the hazards. Take a look at the different types of hazards in terms of insurance that all the insurance buyers and insurers must know about.
Moral hazards on insurance
A moral hazard, as the name might suggest, results from fraudulent acts committed by an insured. Examples of moral hazards include filing false insurance claims or misrepresenting oneself on a life insurance application in order to obtain coverage or more favorable coverage terms.
Legal hazards on insurance
A legal hazard meanwhile, increases the likelihood and severity of a loss due to a condition imposed by the legal process that forces an insurer to cover a risk that it would otherwise deem uninsurable. For example, the American legal system motivates many people to bring litigation suits in order to realize the potentially lucrative profits in doing so. Anything that might prompt a lawsuit involving an insurer can be considered a legal hazard.
Physical hazards on insurance
A physical hazard increases the likelihood of a loss occurring due to inadequacies in the condition, structure or operation of an insured or insured property. For example, a roof covered with heavy snow might be considered a physical hazard when it comes to homeowner’s insurance. At the same time, a health insurance policy might consider an insured’s heart condition to be a physical hazard.
Morale hazards on insurance
A morale hazard results from a lack of reasonable care put forth by an insured. For example, consider an insured whose wallet is stolen from his car because the doors were left unlocked. This would be a morale hazard, as the insured did not take the necessary care to prevent his valuables from being stolen.