Insurance VS Gambling

1.Risk creation vs Risk reduction: When we enter into a gambling

engagement, such as buying a lottery ticket or putting money in a slot
machine, we create risk of loss that did not previously exist. In other words,
there was no risk of losing money to gambling until we bought the lottery
ticket or put the money in the slot machine.

Conversely, the risk of financial loss from other causes already exists
whether we purchase insurance or not. For example, my home faces the
same risk of being burned down by a fire whether I buy homeowners
insurance or not. If I do not have homeowners insurance, I am faced with
the possibility of having to pay completely out of my pocket to rebuild my
home in the event of a fire.

2.Valid vs Void Contract: Insurance is a valid contract, on the other hand

gambling is a void contract according to Bangladesh contract act 1872.

3. Socity’s view: People view a gambler as a unreliable person: conversely

People view an insurance holder as a responsible person.

4. Certainty: In case of gambling either loss or gain will happen with each having
50-50 probability. Insurance will cover loss occurred due to uncertain event that
may never happen as well.
5. documentation: Gambling need no formal

Importance of Insurance for

Businesspeople:
1. Security and Safety: It gives a sense of security and safety to the
businessman. It enables him to receive compensation against actual loss.
He can concentrate on his business with a secure feeling that in case of
losses arising from insurable risk, his losses will be compensated.
2. Distribution of risk: Risk in insurance is spread over a number of people
rather being concentrated on a single individual.
3. Normal expected profit: An insured trader can enjoy normal margin of
profit all the time. He is protected from unexpected losses because of
insurance.
4. Easy to get loans: A trader can get bank loans easily if his stock or
property is insured, as insurance provides a sense of security to the lenders.
5. Advantages of Specialization: Businessmen can concentrate on their
business activities without spending more time on safeguarding their
property. The insurance companies, on the other hand, can provide
specialized insurance services.
6. Development of Social Sectors: Insurance funds are available for
economic development particularly for the development of social sectors.
Especially for a developing country like India, insurance funds are an
important source for investing in infrastructure projects (roads, power,
water supply, telecom etc).
7. Social cooperation: The burden of loss is shouldered by so many persons.
Thus, insurance provides a form of social cooperation.