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The Insurance Times
l Contract Frustration
l Forced Abandonment/Divestiture
l Economically, changes in the methods of production and
distribution are another source of risk.
l Risk, in insurance terms, is the possibility of a loss or other
adverse event that has the potential to interfere with an
organization's ability to fulfill its mandate, and for which an
insurance claim may be submitted.
Risk & Uncertainty
Professor Frank Knight in "Risk, Uncertainty and Profit" identified
uncertain events into two main categories :
l Those for which the probability of occurrence can be
calculated either on a rational basis, or on the basis of the
statistical analysis of a number of similar events that have
occurred in the past. These are Risks.
l Those for which analysis is impossible by virtue of the fact
that they are either a "one off event or because their occurrence
does not follow an apparent pattern of events. These are
Uncertainties.
l The Probability of Occurrence or the chance that an event
may take place is defined as the number of occasions a
particular event will occur in an infinitely large number of
independent events. It is measured either as a decimal or a
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