Page 205 - RISK Management IC 86

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So we see, the following factors influence the
purchasing decision :
(i) potential size and frequency of loss
(ii) size of premium loading
(iii) value placed upon financial certainty
(iv) Services provided by insurers

Q4. a) Identify :

(i) Costs - The total direct costs of risks are : (a) Capital
costs of (i) loss prevention equipments and (ii) higher
standards of construction. (b) Current costs (labour and
materials) of (i) maintenance of buildings, plant and loss
prevention equipment. (ii) Additional supervision to
reduce losses. (iii) security systems. (iv) first aid and
(v) safety courses and seminars.

The indirect costs are : Disruption of production (i)
while loss prevention equipment is being installed or
maintained. (ii) continuing interference with production
flows by loss prevention measures. (iii) labour disputes
over loss prevention measures.

(ii) Benefits of loss prevention - Direct benefits of loss

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