Entries Tagged 'Business' ↓

With the globalization processes going on in the world economy it is clear that the world itself is getting smaller every year. And as much benefits this brings, there are as many downfalls posing risks to any business working internationally. Local riots, wars, social instability in other regions can directly affect your business. In order to protect your enterprise from such risks you can employ political risk insurance.

Political risk insurance (PRI) is a type of business insurance that covers the loss due to political or social instability within the country. This type of insurance coverage is also a tool for attracting foreign investments, providing proof of the enterprise’s stability. Even small businesses may be required to purchase such insurance when working with many international partners.

Let’s take an example. A small business works as an importer in the US and wants to set up a shipping facility to reduce its costs of import. But the enterprise has problems with setting up the facility, not because of credit unavailability or poor financing, but because the area is often subjected to social riots or political disputes that impede normal functioning. And due to that many foreign companies are not willing to work with businesses from that area.

In such a case, a PRI coverage would be very beneficial for the project. In case of any loss or damage to the property or goods due to political or social riots the cost will be paid for, and this will initially encourage the presence of foreign partners, assuring financial stability of their operations. From this point of view PRI is not only a form of business insurance but also a risk management tool for foreign investment projects. Continue reading →

Even when it’s all right with the economy, there are a wide range of activities undertaken by nonprofit or not-for-profit organizations. There are a number of reasons for this. Culturally, the idea of volunteering your time for a good cause has always been strong. Some people are always ready to give their time in providing a range of services to those in need. When the economy weakens and a recession tips more people into poverty, the need for volunteerism rises. Indeed, the more people who need help, the more opportunities there are for nonprofit organizations to give that help. Add to this social incentive the economic fact that there are tax advantages to running nonprofit businesses, and you come to the reality that there are thousands of organisations providing business services of differing types in every major city across the country. They are filling the gap left when the for-profit organizations withdraw from the markets because they cannot make enough profit. In all businesses, the common denominator is the desire to make an operating profit. The difference lies in what you do with the profit. Yet every business has broadly similar insurance needs. Continue reading →