An all risk property insurance policy comes with a compulsory deductible it means at the time of claim the insurer will not settle the entire claim amount and a certain portion would have to be paid by the policyholder it is called compulsory deductible a policyholder can voluntarily opt for a higher voluntary deductible and get lower premium rates as the policyholder agrees to share the . Financial risks are the risks where the outcome of an event ie event giving birth to a loss can be measured in monetary terms the losses can be assessed and a proper money value can be given to those losses the common examples are material damage to property arising out of an event we may consider the damage to a ship due to a cyclone . Aba tort trial and insurance practice section the brief spring 2014 insuring against many but not all risks an overview of the all risk policy by john n love and micah jm knapp john n love is a partner in the boston office of robins kaplan miller ciresi llp he represents insurers on property and liability policy coverage issues and handles reinsurance disputes micah jm knapp . The insurance company pools all these risks and by the law of large numbers is not really risky in itself theres a little mathematical formula for risk pooling which is assuming independence if every lets say its a life insurance if every death is independent of the other theres no epidemics or wars that bring a lot of deaths all at once then the risk that you face if youre writing . 1 introduction everyday many individuals organizations governments and businesses buy insurance to transfer the risk of facing an uncertain loss in exchange for paying a certain premium this mechanism has been used for centuries reducing the uncertainty of financial loss by spreading risk across a large number of the insured it has become an important cornerstone not only of economic
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