Exam DISC-RM Practice Question 52
Study guide: Exam DISC-RM
A large, financially strong retailer owns a headquarters building in an earthquake zone. A major earthquake is unlikely in any year but would cause a loss the retailer could not absorb in full. The insurance market is hard, and earthquake premiums have risen sharply. Which treatment is most appropriate?
- A) Avoid the exposure by abandoning the headquarters and leasing space elsewhere
- B) Retain the whole exposure, since a rare loss belongs in the retention cell of the matrix
- C) Insure with a higher deductible, keeping a layer it can absorb and transferring the rest
- D) Rely on loss prevention alone, since it lowers how often earthquakes occur
Answer this question and see the worked solution