Decision stage of risk management when the firm decides how to respond to risk. The options include risk transfer (insurance and non-insurance), risk financing; reduction, avoidance, prevention, control, etc. This is followed by implementation.

A measure of the capital required to absorb any unexpected losses that result from the risks an organisation assumes in regard to its business and operational activities. In insurance RBC management means an insurer calculates the capital needed to support different classes of business. Overall RBC is expressed as a ratio, the total capital of the company divided by the company’s RBC as determined by formulae. The FSA has proposed that insurers will be required to hold the higher amount of minimum capital requirement as set out in the EC Directives and enhanced capital requirement, a more risk sensitive calculation specified by the FSA.

Excess of loss reinsurance covering losses on policies issued or renewed during the treaty period until they expire. The attachment point is the key.
***
UK: a type of reinsurance; in excess of loss property reinsurance, a risks attaching clause means that cover continues until the expiry of the original risk.

Conditions whereby hauliers accept liability for loss, misdelivery or damage for goods unless an exception (e.g. inherent vice, Act of God) applies. Liability is limited to £1,300 per tonne not exceeding the value of the consignment. Physical loss, misdelivery or non-delivery must be notified within 7 days and a claim made within 14 days of termination of the transit. Other losses need to be notified and claimed within 28 and 42 days respectively. All liability ends if the goods owner does not commence legal proceedings within one year from commencement of the transit. Liability for consequential loss is capped at the amount of the carriage charges. There is no liability for livestock, bullion, money, precious metals, etc., unless specially agreed. See HAULIERS’ LIABILITY.

Offered by some private car insurers as part of the car insurance. Covers the cost of call-out and roadside repairs (subject to exceptions), vehicle recovery to a garage, hire car to continue a journey or return home, rail fare to cover cost of collecting the car after repair, transportation of the car and occupants to destination or home or overnight hotel accommodation up to specified limits.

Motor trade policy permitting driving of own and customers vehicles on a road or temporarily garaged during a journey. Use of vehicles is restricted to motor trade use and social, domestic and pleasure. There are wide ranging options for driving by the insured, the insured’s spouse, employees and friends and named additional drivers. Further extensions include loan and hire, unaccompanied demonstration, private hire or windscreen cover. Cover can be comprehensive, third party fire and theft or third party. Risks on the insured’s premises are covered under internal risks policies. See POINTS BASIS; NAMED DRIVER BASIS; TRADE PLATE BASIS.

It is unlawful to use, or permit use of, a motor vehicle on a road without a third party policy or security (s.143). Minimum cover is liability for death or injury and for property damage up to £250,000 under a policy issued by an authorised insurer belonging to the Motor Insurers’ Bureau and meeting EC requirements. The policy must also cover emergency treatment. The insurer’s right to avoid an ‘Act’ claim is restricted (s.148). See ACT ONLY POLICY; CAR SHARING; MOTOR INSURANCE CERTIFICATES.

UK: Stealing by force or threat of force (Theft Act 1968, s.8).
***
The felonious taking, either by force or by fear of force, of the personal property of another, commonly known as a hold-up.
***
US: The taking of property from a person by force or threat of violence.
***
The unlawful taking of property by violence or threat of violence. According to Section 390 of the Indian Penal Code “Theft is robbery if in order to the commission o for in the committing of the theft or in carrying away or in attempting to carry away property obtained by theft, the offender, for that end, voluntarily causes (or attempts to cause) to any person death or hurt or wrongful restraint or fear of instant death or hurt or wrongful restraint. Extortion is robbery if the offender, at the time of committing the extortion, is in the presence of the person put in fear, and commits the extortion by putting that person in fear of instant death, of instant hurt, or of instant wrongful restraint to that person, or to some other person, and, by so putting in fear, induces the person so put in fear then and there to deliver up the thing extorted. (The offender is said to be present if he is sufficiently near to put the other person in fear of instant death, of instant hurt, or of instant wrongful restraint.” Refer also: “Theft.”. Refer also “Extortion”.

Covers financial institutions for direct financial losses caused by traders acting outside their authority. Unauthorised trading means trading which at the time of trade is: (a) in excess of permitted financial limits; or (b) outside of permitted product lines; or (c) not with a designated counterparty. The policy does not cover simple errors or losses caused by traders acting on behalf of third parties and that part of any loss that is deemed to have been authorised. Cover is usually arranged in conjunction with a bankers’ blanket bond.

Same as pirates.