Page 213 - RISK Management IC 86
P. 213
The Insurance Times
liquidity crisis, and may be forced either to borrow
heavily or to realize assets at a short notice.
Apart from the fairly predictable, small, regular
losses the charging of losses to operating costs run
counter to the objectives of cash budgeting.
Organisations that suffer from large fluctuations in
their normal cash flows may be reluctant to set aside
additional liquid funds to provide for the replacement
of the damaged property or to meet payments for
other losses. Since, all risks do not have to be paid
in full as soon as they occur, some spreading of
costs can be used to ease the financial burden.
(b) Just as some individuals are more risk averse than
others, so too are corporate bodies. Their attitude
depends on the attitudes of the individuals, who
collectively comprise the decision making body. A
firm may achieve a given amount of maximum profit
and do nothing for loss prevention, neither goes for
any insurance coverage.
On the other hand the firm may decide to eliminate
risk by purchasing insurance. This takes care of
Website: www.bimabazaar.com Call: 033-22184184 / 40078428 214
Copyright@ The Insurance Times. 09883398055 / 09883380339
