Do you know your Risk Definitions?

If you want to manage risk within your firm, you need to familiarize yourself with riskmanagement language. Here are some basic definitions, provided by the National Alliance for Insurance Education & Research, which you can use to build your knowledge base:

  • Exposure: A situation, practice or condition that might lead to a loss; an activity
    or resource (assets, people).
  • Peril: A “cause” of loss; an event that might cause a loss.
  • Hazard: A condition within an exposure that might lead to an incident; “a peril
    about to happen.”
  • Incident: An event that disrupts normal activities and might become a loss or
    claim; “a near miss.” Lifecycle of an incident: Preincident,incident, immediate
    postincident,post incident, rehabilitation (repair, recovery).
  • Accident: An incident resulting in injury or damage to person or property which has, or will become, a loss or
    claim; “an unplanned event definite as to time and place that causes bodily injury or property damage.”
  • Occurrence: An accident with the limitation of time removed.
  • Loss: A reduction in value.
  • Claim: A demand or obligation for payment as a result of a loss.
  • Frequency: The number of times an incident occurs.
  • Severity: The monetary impact of a loss.
  • Expected losses: Loss projections (“loss pics”) based on probability distributions and statistics; frequently
    developed using actuarial techniques.

For a complimentary review of the risks your business faces, please feel free to contact us at any time.

888.697.6542

www.FittsInsurance.com

Leave a Comment

Your email is kept private. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>