Question

From an insurance perspective, the term "loss exposure" means:

A. the extent to which an insurer discloses its marketing practices

B. the extent to which an insurer discloses the components making up its policy premium rates

C. the extent to which an insurer is subject to a possible loss

D. the extent to which insurers are required to open their financial books for public inspection

Answer 1

C. the extent to which an insurer is subject to a possible loss

Step-by-step explanation:

In insurance, "loss exposure" shows the extent to which an insurer is subject to a possible loss. It denotes the possibility of loss especially financial loss. This financial loss can be as a result of loss of use, damage or financial claim against one or the business.

There are four types of loss exposures:

1. Liability loss exposures

2. Income loss exposures

3. People loss exposures

4. Property loss exposures.