Commonly used in financial institution bonds, a loss limit is the aggregate amount that will be paid out under the coverage during the policy term. Loss limits also may be used when insuring large property risks where the exposures are spread out geographically. In this type of situation, it is unlikely that all property would be damaged by a single occurrence. Therefore, the amount of insurance may be set at a loss limit per each covered occurrence.

Another term used in retrospective rating formulas. It is designed to limit the effect of catastrophic losses that would otherwise be considered in full in figuring in the final retrospective premium.

Used in retrospective rating formulas. Designed to limit the amount of catastrophic losses that would usually be reported in full while calculating the final premium.

A factor used on a pure loss cost to produce a reinsurance rate.

A listing of the rupee losses associated with each possible risk management tool and each possible outcome. For example, a decision to retain would produce a loss of Rs. 10,000 if a Rs. 10,000 loss occurs, A decision to purchase complete Insurance would produce a ‘loss’ of the Insurance premium no matter what the outcome may be. The original loss matrix should be converted to an after-tax basis and extended o include the intangible costs (worry caused by short-run uncertainty) as well as the tangible rupee losses.

A factor applied to a loss cost to develop a premium rate.