Registered Insurance Brokers of Ontario (RIBO) Practice Exam

What is one method your client can use to keep insurance premiums down on an industrial complex?

1. Reduce coverage amounts

2. Implement loss prevention measures

3. Ignore minor risks

4. Increase the deductible

The correct answer is: Implement loss prevention measures

Implementing loss prevention measures is a proactive strategy that clients can adopt to manage and reduce their insurance premiums. By investing in risk management practices—such as improving safety protocols, conducting regular maintenance, training staff on loss prevention, and investing in security systems—clients can lower the likelihood of claims. Insurers recognize that reduced risks translate to fewer claims, which can result in lower premium costs over time. Reducing coverage amounts could expose the client to significant financial risk if an incident occurs. Ignoring minor risks may lead to unanticipated losses that could have been mitigated. While increasing the deductible can lower premium costs initially, it shifts more financial liability to the client, which may not be sustainable in the event of a loss. Therefore, focusing on loss prevention is an advantageous approach for maintaining optimal insurance premiums while ensuring adequate coverage.