Question

What is an example of a double-trigger policy?

a.

Losses caused by power outage and high commodity prices

b.

Losses caused by fire and storm-related damage

c.

Losses caused by equipment failure and power outage

d.

Losses caused by storm-related damage and high commodity prices

Posted under IC85 Reinsurance Management

Answer: (a).Losses caused by power outage and high commodity prices Explanation:An example of a double-trigger policy, which pays for actual losses of a manufacturer caused by two simultaneous events: a power outage resulting from equipment failure or storm-related damage, and the spot market price for power exceeding a preset threshold during the storm or equipment-related failure.

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