It’s easy to go about our day to day lives without thinking much about how insurance makes the mundane possible. But what if insurance didn’t exist?
Getting to Work - Risk vs Liability
We get up on a Monday morning, drag the kids out of bed, and get organised for the day ahead. In the short time it takes to drive them to the school, there is potential for a collision, which could cause damage to the car or injury to the people involved. Without insurance, the responsibility for repairing damage or replacing your car is solely yours. Even if someone else was at fault, they could potentially deny this. Insurance enables you to afford the financial burden of repairing or replacing your car, as well as the legal action to establish liability for the property damage, if provided under your cover.
Alternatively, we could take the bus to work. If the bus company did not have insurance, it would have the same risk exposure as a car driver. Insurance enables the bus company to provide a quality service at a low, affordable price.
Are You Covered at Work?
At work, some jobs have more obvious risks than others, such as if you work with heat or cutting equipment, or at height. Regardless of what your job is, your employer has a responsibility to look after your health and safety. If they fail to adequately do so, and you suffer illness or injury as a result, then they may be liable. Insurance enables your employer to afford to carry this risk while continuing to run a viable business.
Shopping for Groceries
After work, we go shopping for groceries. How many people pass through the doors of that supermarket everyday? What if one of these people trips on a curb, or slips on a wet floor and gets injured? Without public liability insurance the supermarket might have to set aside money for potential claims. Insurance enables the grocery store to be able to afford to sell us groceries at a typically affordable price.
There is also a risk that any of the goods that the supermarket sells may be defective, potentially causing illness or injury from consumption or use. Both the manufacturer of the goods and the supermarket could face claims without products liability insurance, which enables the store to protect itself against this risk exposure.
A Visit to the Doctor
Before our day is over, we go to the doctor, who diagnoses our illness and prescribes a course of treatment. What if they fail to accurately diagnose and our illness develops into something more serious? This is a risk that medical professionals face without professional indemnity insurance to cover the risk. Insurance enables the doctor to afford to practice medicine without having to cover this risk themselves.
Most of us pay our annual insurance premiums begrudgingly, knowing that in most years we won’t need to make a claim. I hope that this brief look at a normal day demonstrates that, regardless of whether or not we need to call upon our insurance to operate in any particular year, the very fact that we, as individuals and businesses, have access to those insurance products enables our society to function as we expect.