Risk is common in every business and also in every day life. The word 'risk' is used to describe any situation where there is uncertainty about what outcome will occur. That is the reason that increases the importance of insurance. It is well recognized that risk management and insurance play an important role in economic development. Insurance is a way of buying peace of mind that if you suffer an unfortunate, unpredictable loss you will receive financial compensation from the insurer. This compensation is meant to put you back in the same financial position you enjoyed before the loss or make a specified benefit payment.