THE ROLE OF INSURANCE IN MINIMISING BUSINESS RISK

Abstract

Business environments today face frequent uncertainty due to operational disruptions, financial instability, legal liabilities, and unexpected external shocks. Insurance plays a vital role in absorbing these uncertainties by transferring risk and enabling faster recovery, but it is not effective on its own without efficient claim settlement, structured risk management practices, and strong business continuity planning. This study examines how insurance coverage, claim settlement efficiency, risk management practices, and business continuity planning influence business risk minimisation. Primary data were collected from 125 respondents using a structured questionnaire and analysed through SPSS using descriptive statistics, correlation, and multiple regression techniques. The findings reveal that claim settlement efficiency and business continuity planning have a statistically significant impact on reducing business risk, while insurance coverage and risk management practices show weaker influence when considered independently. The study highlights that insurance is most effective when integrated with operational preparedness and continuity strategies, offering practical insights for managers, insurers, and policymakers to strengthen organisational resilience.