Elements that an insurable risk ought to possess

Discuss four elements that an insurable risk ought to possess

Elements that an insurable risk ought to possess

  • The loss must be due to chance.
  • The loss must be definite and measurable meaning there must be bills to establish proof of loss not just casual references
  • The loss must be predictable meaning it must be of such a nature that its frequency and average severity can be readily determined to establish the required premium.
  • The loss cannot be catastrophic.
  • The loss exposure can be randomly selected.



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