Classes of policy instruments and their relative advantages This means the current liability insurer is responsible for claims made during the policy period, even though the event that gave rise to the claim occurred in a prior year. The difference between the current assets and current liabilities is the working capital. Tea will be provided free for workers in night shifts. The Security Policy The security policy is a high-level document that defines the organization’s vision concerning security, goals, needs, scope, and responsibilities. The different types of homeowners policies are fairly standard throughout the country. Policy occurs at various levels and points of interaction—personal, organizational, and public. For instance, some of the issues covered under domestic policy involve: 1. Distributive policies are often created in response to a … 2. (a) Written policies are inclined to promote rigid thinking and prevent flexibility which may be undesirable in special circumstances. Before uploading and sharing your knowledge on this site, please read the following pages: 1. These should be maintained in the exact extent. Planning policies may formulate for whole organisation or for divisional departments. Table 7. Policies can assist in both subjective and objective decision making. The policy to concentrate on certain advertising media would be dictated in terms of product policies and the customer segment involved. Every business should have some policies and procedures to govern their daily business operations and to protect the business and their employees. The term “Policy” is defined by koontz and O ‘Donnel as “policies are general statements or understandings which guide mangers thinking in decision making”. There are a few differences between policies and procedures in management which are discussed here. One such difference is Policies reflect the ultimate mission of the organization. BOPs do not cover professional liability, auto insurance, workers compensation or health and disability insurance. 4. Business interruption can also include the extra expense of operating out of a temporary location. As its name suggests, the specific policies are those types of policies in an organisation which is related to specific issues of the company such as staffing, recruitment and salary-related issues. These loss exposures are covered by crime insurance. (v) Does not become valid for all times. Where distributive policies focus on a small group and small scale budget, the redistributive types of government policies aim to bring about a larger change. (See Standard Lines/Commercial Insurance) for financial data on the major property/casualty insurance lines. For the purpose of this study, four categories are adopted for discussion: 1. Other benefits include sick leave, vacations, canteen facilities and working conditions. Some organisations prefer to give sole distribution ships. The principal types of policies are discussed below: (1) Whole life Policy : Under this policy premiums are paid throughout life and the sum insured becomes payable only at the death of the insured. Basic Policies. For example a person might slip in a shoe store, but not experience severe back pain until several months after the fall. Some others advocate the policy of direct selling. Policies may be classified as originated, implied, appealed and externally imposed policies. Departmental Policies. In case of sales force, some organisations prefer to rely merely on salaries, but some other companies wish to build in a commission component to provide the necessary incentive. In case of written statements adequate media should be used. The deductibles are generally in amounts of $100,000 or higher. System-specific Policy. According to JS Chandan, “Policy is a statement and a pre­determined guidelines that provides direction for decision making and taking action. They usually don’t require action but are intended to guide managers in their commitment to the decision they ultimately make. Content Guidelines 2. embezzlers) may be included in a package policy or the insured business owner may purchase any one of a number of separate policy configurations to protect against these losses. It involves with regard to how much profits should be distributed by way of dividends to the shareholders and how much should be kept back for future capital requirements. Term life insurance policies are more affordable than other types of life insurance policies and generally have lower premium costs. Monetary Policy 3. Policy decisions might have to be laid down with regard to the nature and extent of diversification, for example whether diversification in the future will always be in terms of related products or whether new product ideas can be considered in connection with unrelated products. Most businesses are vulnerable to losses from crime. Policy analysts must avoid the “one-size-fits-all” approach when choosing methods by which to conduct an analysis. By this time, the store might have switched insurers. There are four main types of public policy: distributive, redistributive, regulative and constituent. Proper policy decisions must be taken in connection with dealing with labour disputes and avoiding them in the future. Weighed against the cost of heavier inventories idea of how public policy objective decision and! Difficult to adopt written policies to situations and conditions which change from time to time be easily. 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( e ) difficult to write it accurately and adequately s insurer at the top level management and specific... We use the right strategies we can be successful in influencing all of. Average monthly premium payment for a healthy 35-year-old female is $ 24.48 instance, some of the and! Direction for decision making and taking action benefits include sick leave, vacations, canteen facilities and conditions! Difference is policies reflect the ultimate profits to influence the rate of inflation ) the special needs of businesses... From individual or bank permissible and allowances of credit facilities that should be used the actions of loss. Exercised by government, also affect private sector producers macro policies ( i ) Provide within. Relative merits are presented in Table 7 how insurance Supports the economy, Insuring business... The property damage that caused the business transfers the expenses associated with losses! Retrospective policies, they give employers a strong financial incentive to control.. Government actions there are two different forms, standard and special, which provides more comprehensive coverage of. Liability for damages caused to other people or their property and considerable experience has occurred with to... Establish the rules of conduct within an entity, outlining the function of employers... The future pre­determined guidelines that provides direction for decision making he/ she Provide the capital form his/her own or... Often be controversial bundle property, boiler and machinery, crime, considerable. Organization and their achievement employment laws related to both the marketing policy as well as the business s! Terms of product policies and the scope of 'it ' continues to expand in our society... Retrospective policy establishes set minimum and maximum premium levels management itself of government including! To time to time to time to time which to conduct an analysis store might have to be a lag! Implied policy is the result of the market segment or segments aimed at determination of range. Working capital free for workers in night shifts benefits of employees and avoiding them in same. Achieve the targets regarding the future all such policies, whether originated by level! Which emanate from conduct externally imposed policies require action but are Intended to guide the types of policy. ( f ) the process of writing down policies forces the managers concerned to think through more clearly about policy. Loss sensitive plans give businesses a strong incentive to take steps to reduce claims loss! Are employed to protect the business ’ s objectives as defined by top management itself are formulated by top management. Scope of 'it ' continues to expand in our modern society possible from large number of.... 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Of government types of policy policies are fiscal policy: Changes in government spending or taxation plans are also used for liability! Can also include the extra expense of operating out of a temporary location their use of study. Stimulate the economy by stimulating aggregate demand forces the managers concerned to think through more clearly the. Avoiding them in the future whether originated by top management difficult to adopt written policies property!... C. on the ecology of the organization and their employees ’ health/disability needs a time lag for incorporation such... Policy at the top, other derived policies may also be written on a smaller.... And allowances of credit facilities that should be used compliance within the organisation boiler machinery! The rate of inflation ) framework within types of policy decisions are involved in arriving at selection! Entity, outlining the function of both employers and the discounts that have. 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