📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

  • google app store apple app store
  • ✖

      Question

      2000 factories require a Sum Insured of Rs.10 crores

      each. Statistically, we know that 2 factories get destroyed by fire each year. However, we do not know which two . So, if the losses are to be paid for by all of the 2000 factory owners, what should be the contribution by each factory owner by way of pure premium?
      A Rs. 75,000 Correct Answer Incorrect Answer
      B Rs. 1,00,000 Correct Answer Incorrect Answer
      C Rs. 2,00,000 Correct Answer Incorrect Answer
      D Rs. 3,00,000 Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      Total annual loss: Rs. 10 crores * 2 factories = Rs. 20 crores Contribution per factory: Rs. 20 crores / 2000 factories = Rs. 10,000 Therefore, the contribution by each factory owner by way of pure premium is Rs. 10,000.  

      Practice Next
      ask-question