Coinsurance is a risk-management strategy used by businesses to protect their bottom line. It works by having two or more parties agree to share the cost of an insured loss. The way it works is that each party agrees to pay a certain percentage of the total cost, thus reducing the amount paid out in claims for all parties involved. This can be beneficial for businesses because it helps them to spread the risk of potential losses over multiple parties. By doing this, businesses can better manage the financial risks associated with insuring their operations.