John’s company bought security liability insurance covering the cost of equipment only to find that the policy did not fully compensate for the damage done after thieves broke in and stole the data center equipment, because the loss in productivity had not been factored in. What kind of risk did management fail to consider?
A.
Tangible risk
B.
Insurance risk
C.
Delayed loss risk
D.
Maintenance risk
Explanation:
Management failed to consider the delayed loss risk-the productivity risk that
occurred after the tangible equipment had been taken. Without equipment, work stops.
The interruption in productivity can far outweigh the tangible loss, and
this-coupled with the public profile effects-can prove devastating for companies.
Maintenance risk-the cost it takes to maintain systems-is not a direct factor in
this scenario nor is insurance risk. However both may contribute to delayed loss,
with maintenance having to increase work to assemble knowledge needed to maintain
new equipment, and if the insurance policy premium increases as a result of the
incident.