Updated on March 2, 2023
The broad meaning or interpretation of the term cover in investments refers to the act of taking measures to reduce the overall exposure of risk of investment. It can be in the form of mitigating risk through hedging or through taking insurance coverage against any unfortunate event.
The cover also refers to the ability of a company to meet its expenses or financial measurement in the form of ratios that indicate the financial health of a business.
Coverage can also indicate the company or investor’s ability to meet the potential losses from investment and thereby safeguard the profitability of the overall investment portfolio or the viability of the business.