Definition:
Reinsurance is insurance purchased by insurers from other insurers to limit the total loss an insurer would experience in case of a disaster.
Ordinarily, the business owner has little to be concerned with when it comes to reinsurance. However, recent events, such as the War in Iraq, the rise of terrorism, and recent natural disasters, have made it difficult for insurers to secure reinsurance and, as a result, insurers have left the market in some states or premiums for certain types of insurance have risen to an all-time high.