The Principle of Indemnity States That the Insured Can Be

question 92

True/False

The principle of indemnity states that the insured can be compensated for an amount equal to his economic loss.

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Definitions:

Financial Leverage

The use of borrowed funds (debt) to amplify potential returns on investment, which could also increase the potential for loss.

Indirect Bankruptcy Cost

Expenses that a company incurs when it approaches bankruptcy that do not include actual legal and other direct costs, such as lost sales, damage to reputation, and management distraction.

Bankruptcy Court

A specialized federal court dealing with cases involving individuals or businesses that cannot repay their outstanding debts.

Business Risk

The exposure to factors that may cause a business to experience lower profits or financial loss.