Page 178 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

(iv) The amount of premium income in a particular
class of risk. Income less would mean less
experience , so lower limit of retention would
be better.

Q3. What individual features are the in the risks
which effect deciding of limits of retention.

Ans. The individual features in the risk which effect deciding
of retention limits are :
(i) The physical nature of risk, its construction, size,
the processes carried on, and the class of goods
stored, or used therein. The limits vary according
to nature of construction and occupancy, e.g, in
respect of buildings with timber floors, reduced limits
are applicable. When a risk has mixed form of
construction, the predominant hazard determines the
retention.

(ii) The probable effects of any fire outbreak and
possibilities of salvage. E.g, certain stocks are more
combustible or less combustible or burn very slowly
or burn moderately. The governing factor for
salvage is the degree of susceptibility of stocks to

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