Reference no: EM133082788
Nancy, the chief financial officer of Pinnacle All World ATVs, asked you, as the risk manager, to prepare a total cost of risk report. The organization has a general liability policy with a $2,000,000 deductible per occurrence and self-insures property damage for the company-owned vehicles.
A. Based on the following information, indicate (yes or no) if the item should be included in the total cost of risk AND the reason for your decision. Credit will not be awarded if a yes AND no answer is provided.
$300,000 - insurance premiums for all lines of coverages
$20,000 - repair of equipment damaged by an employee's negligence
$55,000 - settlement of a general liability claim paid by the insurer and billed back to the insured
$10,000 - safety consultant hired to perform physical inspections at each of the locations
$4,000 - the recovery of damage to a company-owned vehicle from a negligent driver's insurer
$65,000 - salary of the Director of Marketing including her benefits
$15,000 - Overtime paid to an employee covering for another employee who was out of work recovering from a work-related accident
B. Calculate the total cost of risk using the above information. Explain if it's good or bad.