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Why would a business pay premiums to an insurance company?

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Why would a business pay premiums to an insurance company?

My question is from why does insurance often provide peace of mind topic

I got this question in my homework.

Other related questions to my question are:

Why would a business pay premium to an insurance company?

What is insurance premium for a business?

What is premium payment in insurance?

What do insurance companies look at to determine your premium?

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The correct answer by me is: Insurers use the premiums paid to them by their customers and policyholders to cover liabilities associated with the policies they underwrite. They may also invest in the premium to generate higher returns. This can offset some costs of providing insurance coverage and help an insurer keep its prices competitive.

The title of my answer is Insurance Premium Definition

The reference of my answer is Investopedia

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