Page 108 - RISK Management IC86 Ebook

Risk Management

number of customers are large and the average receivable
is small.

Increase in expenses

n If an owner can not occupy his building or structure because
of an accidental damage, he looses its rental value for the
time it takes to make repairs. Such a rental value can be
measured by the cost of equivalent premises elsewhere less
non-continuing expenses

n These relate to the additional costs that might be incurred by
an organization after an accidental interruption, to continue
its operations either by temporarily shifting to and operating
from another premises or by expediting repairs or by incurring
higher labour costs; in short the increased costs to minimize
effects of interruption.

Consequential loss analysis (Manufacturing)

Outline of the procedure for such an analysis can be as under
a) Draw a schematic block diagram of the main processes

showing routes in the preparation of various products from
initial input to outward sales. As far as possible, individual
buildings (or fire separated areas) should be shown as separate
processing blocks but where several distinct processes take

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