Definition

The process used by insurers to evaluate risk and determine coverage terms. It ensures that policies are priced fairly based on individual factors.

What to consider

  • Identify measures to reduce risk.
  • Invest in preventive technologies.
  • Monitor the effectiveness of prevention strategies.

Real world scenarios

  • A manufacturing company implemented safety protocols as part of its loss prevention strategy.
  • A retail store installed security cameras to prevent theft and reduce losses.
  • An office adopted wellness programs to prevent health-related losses among employees.

Related terms

Insurance & Financial Protection