Page 24 - Ebook IC S01

Survey And Loss Assessment IC-S01

There may be different standards of risk. A standard risk is that which fulfils the

prescribed norms of the insurance company for accepting the insurance. In case

of sub standard risk, the risk to be covered is more than prescribed and to cover

that the insurance company must charge some extra premium or reject that risk.

Preferred risks are those where the chances of losses are loss are less than the

prescribed standards. This may be due to better risk management or physical

conditions. For example the chances of flooding is less in the hilly areas.

In order to be insurable the loss must be

Uncertain

Identifiable

Significant

Predictable

Importance of insurance industry

Trade and industry cannot think of doing business without having the insurance

protection. The business may be wiped out if they do not have insurance

protection.

Insurance helps businesses to have peace of mind and take larger risks.

Insurance plays an important role in transacting of the international trade and

commerce.

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