Page 4 - Insurance Surveyors Book Ebook IC S01

Survey And Loss Assessment IC-S01

 Forced Abandonment/Divestiture

 Economically, changes in the methods of production and distribution are

another source of risk.

 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 :

 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.

 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.

 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

fraction or as a percentage but always in the range of Zero to One i.e. The

likelihood of an event is assigned a numerical value between 0 and 1, with

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