Insurance Transfers Risk, It Does Not Erase It
Distinguish risk transfer from risk elimination when explaining the purpose of insurance.
The useful question is not "Are we insured?" It is "Which part of the risk have we treated?" The Four Risk Treatment Lanes Insurance fundamentals get clearer when you borrow ISO 31000 language. A risk can be avoided, reduced, transferred or shared, or retained. Insurance is usually a transfer or sharing mechanism: the insurer accepts defined financial consequences in exchange for premium. The insured still keeps duties, deductibles, uncovered losses, reputation impact, and operational disruption. What The Policy Actually Moves A policy does not move every consequence. It moves covered loss, up to limits, after deductibles, and only if conditions…
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