Insurance is an arangement where a company or the government agrees to provide a guarantee of compensation for a specific loss, damage, illness or death in return for a payment of a specified premium.

Because business insurance spreads the risk costs among all businesses with coverage policies, a business may experience rate increases when no claim  was filed against that business.  However, the replacement costs for the individual business are generally considerably higher, making purchasing business insurance a wise decision for many business owners, whether involving a large, established business or a small business just starting.