Which of the following is NOT one of the four categories of loss in risk management?

Which of the following is NOT one of the four categories of loss in risk management?

• A. Direct losses of property
• B. Indirect losses of income
• C. Liability losses
• D. Market losses

Answer: (D)

In risk management, losses are grouped by the type of impact an incident has on the organization: direct property losses are physical damage to assets; indirect losses cover income disruption and extra expenses caused by downtime; liability losses involve claims and legal costs from third parties; and the fourth category typically covers personnel or operational losses, such as injuries, illness, or loss of key personnel. Market losses describe changes in market values and are treated as market or financial risk rather than a direct incident-related loss category. Because they don’t fit the common four-category framework focused on the incident’s direct, indirect, liability, or personnel impacts, market losses are the one that does not belong.

In risk management, losses are grouped by the type of impact an incident has on the organization: direct property losses are physical damage to assets; indirect losses cover income disruption and extra expenses caused by downtime; liability losses involve claims and legal costs from third parties; and the fourth category typically covers personnel or operational losses, such as injuries, illness, or loss of key personnel. Market losses describe changes in market values and are treated as market or financial risk rather than a direct incident-related loss category. Because they don’t fit the common four-category framework focused on the incident’s direct, indirect, liability, or personnel impacts, market losses are the one that does not belong.