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.