Question

What is the purpose of setting up a table of limits?

a.

To evaluate the types of risks underwritten and the hazard in their locations

b.

To provide protection against natural perils

c.

To provide protection against a single large risk

d.

None of the above

Answer: (a).To evaluate the types of risks underwritten and the hazard in their locations Explanation:The purpose of setting up a table of limits is to evaluate the types of risks underwritten and the hazard in their locations, and to set different retentions according to the degree of exposure to loss involved.

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Q. What is the purpose of setting up a table of limits?

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