Potential losses can be categorized as under:
- Property loss exposures
- Liability loss exposures
- Human and personnel loss exposures
Property Loss Exposures
A property loss exposure is any condition or situation that presents the possibility that a property loss will happen.
The term property is further categorized into Real Property and Personal Property.
Real property means immobile fixed assets such as land, building and other structures attached to the land or embedded in it.
Personal Property consists of all tangible or intangible property that is not real property such as furniture, fixtures, fittings, plant and machinery, money, so on and so forth.
Net income also forms part of Personal Property. Net income refers to the income or revenue minus expenses during a given period.
Liability Loss Exposures
A Liability Loss Exposure presents the possibility of a claim alleging legal responsibility of a person or business for injury or damage suffered by another party.
A liability loss is a claim for monetary damages because of injury to another party or damage to another party’s property.
Liability claims might result from bodily injury, property damage, libel, slander, humiliation, defamation, invasion of privacy and similar occurrences.
Human and Personnel Loss Exposures
A Human loss exposure, also called a personal loss exposure, can be defined as any condition or situation that presents the possibility of a financial loss to an individual or a family by such causes as death, sickness, injury or un-employment.
In a broader sense, the term personal loss exposure can also be used to include all loss exposures faced by individuals and families, including property and liability loss exposures.
Personnel loss exposures, on the other hand, affect businesses.
A personnel loss exposure is the possibility of a financial loss to a business because of the death, disability, retirement or resignation of key employees.
FUNDAMENTALS OF INSURANCE
