Mock incorrect

Question 1

Particular risks are localised or even personal in their cause and effect. Sometimes the
cause may be more widespread (e.g. a storm over a whole region), but the effect is localised
or even related to an individual. Not all properties in the region will have been damaged.

Answer 1

Again, to help us understand let us look at some examples of particular risks:
• A factory fire: this would cause localised damage to the factory and possibly to its surroundings, but would not affect the whole community.
• A car collision: damage to the vehicles and any third-party liability are localised events affecting relatively few individuals.
• Theft of personal possessions from a home: an event that only affects an individual or family.

Question 2

When deciding on equitable premiums (fair contributions), insurers take into account the different elements of risk brought to the pool by each of the policyholders

Answer 2

These are often referred to as discrimination factors.

Question 3

Pecuniary means ‘relating to money’ and pecuniary insurance covers intangibles such as
income, revenue or value. Some classifications will include ‘money insurance’ under this
heading.

Answer 3

Fidelity guarantee
Legal expenses
Credit
Business Interruption
Political Risk
Gaurenteed Asset Protection GAP