Mark CPCU 500 Ch. 2

Terms in this set (54)

a. Risk management professionals sometimes begin the loss exposure identification process by reviewing an organization's financial statements, including the balance sheet, income statement, statement of cash flows, and supporting statements because it identifies current loss exposures and can be used to identify any future plans that could lead to new loss exposures. For example, asset entries on a balance sheet indicate property values that could be reduced by loss.

b. Analyzing an organization's contracts may help identify its property and liability loss exposures and can help determine who has assumed responsibility for which loss exposures.

c. Analyzing insurance policies reveals many of the insurable loss exposures that an organization faces.

d. Corporate by-laws, board minutes, employee manuals, procedure manuals, mission statements, and risk management policies may identify existing loss exposures and indicate impending changes that may create new loss exposures.

e. An organization can use flowcharts to show the nature and use of the resources involved in its operations as well as the sequence of and relationships between those operations. Flowcharts can help identify loss exposures/critical loss exposures. They may also reveal bottlenecks where losses could have substantial effects on business operations. An organizational chart helps identify key personnel for whom the organization may have a personnel loss exposure.

f. Loss history analysis, that is, reviewing an organization's own losses or those suffered by comparable organizations, can help a risk management or an insurance professional to both identify and analyze current or future loss exposures .