The aim of risk management is to maximise opportunities in all [organisation] activities and to minimise adversity. Learn more. Examples of what an insurable risk is as explained: Example1: The probability (or chance) that a certain vehicle will be involved in an accident in year 2011 (out of the total vehicle insured that year 2011) can be determined from the number of vehicles that were involved in accidents in each of some previous years (out of the total vehicle insured those years). The insurable interest doesn’t necessarily have to be in an inanimate object. What are the requirements in order that a risk be insurable? Some such examples … A) Uncertainty regarding financial loss is the definition of risk; therefore, it is characteristic of both pure and speculative risks. 6. Architectural Risk The risk that your architecture will fail to meet business objectives. 1) Personal risks – life or health risks. Non-insurable risks are type of risks which the insurer is not ready to insure against simply because the likely future losses cannot be estimated and calculated. When a risk is very likely to cause loss, or the cost of a claim would be too high, the insurance industry may consider it an uninsurable risk. Our approach is based on understanding risks, assessing them adequately and thus making them insurable. Insurable risk must meet the following characteristics: Losses are definitive (definitive) such as: death, sickness, disability, and old age, including identifiable conditions, such as destroyed buildings, submerged ships, fallen planes, and others. My name is David Mog. Characteristics of insurable risks The risk is that we can not avoid in life, manage risks in order to reduce or transfer risk to others are things you can do. Some countries, such as Iran, Iraq, Afghanistan and the like, are not insurable, said Jochen Duemler, CEO and head of Euler Hermes Americas Region, which offers risk coverage in nearly 200 countries. Examples of what an insurable risk is as explained: Example1: The probability (or chance) that a certain vehicle will be involved in an accident in year 2011 (out of the total vehicle insured that year 2011) can be determined from the number of vehicles that were involved in accidents in each of some previous years (out of the total vehicle insured those years). Take as an example the marketing of a new line of clothing. 3. Fire insurance. Insuring against something that's ALREADY happened - like your house burning down. But, not all risks can be insured risk in the insured has the following specific characteristics: Article Source: Hence, having for an insurance policy is just a way of sharing our risks with other people with similar risks. Learn more. These keywords were added by machine and not by the authors. Pure risk is a risk that can only result in losses. B) A stock market venture is an example of a pure risk. In this case an insurance company accepts to take YOUR risk in return of a premium you pay to them. 7. I've been to Japan, South Korea, Australia, England, Netherlands, South Africa, Egypt, just to mention a few. Opening of a new shop/office: The opening of a new shop is considered a non-insurable risk. This typically requires that the risk have a few basic elements, including the fact that the risk must be random or due to chance and … Take, for example, a patient who wants health insurance but has terminal cancer. I specialize in Research & Development that deals with the design of computer programs in solving a specific problems. The common examples are: 1. These include a wide range of losses, including those from fire, theft, or lawsuits. Poor location of a business: A person situating a business in a poor location must know that the probability of its success is slim. But, not all risks can be insured risk in the insured has the following specific characteristics: Losses due to an accident, such as critical illness late stage, hit by natural disasters David Mog | The expected loss in an organization as a result of inefficiency cannot be insured. An insurable risk is also typically one that can have a premium that ultimately pays for itself. An uninsurable risk, is a risk that no one will sell you insurance for. Explore the elements of insurable risk: due to chance, measurable and definite, predictability, noncatastrophic, random selection, and large loss exposure. 50. Gambling and investments are the most typical examples of speculative risk. David Mog. Risk management is the process of identifying, assessing, reducing and accepting risk.Efforts to avoid, mitigate and transfer risk can produce significant returns. 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