Which of the following can easily be compensated thro’ insurance?
A
Primary burden of risk
B
Secondary burden of risk
C
Both A & B
D
None of the above
Correct Answer: Primary burden of risk
Primary burden of risk can easily be compensated thro’ insurance. The primary burden of risk consists of losses that are actually suffered by households (and business units), as a result of pure risk events. These losses are often direct and measurable and can be easily compensated for by insurance.