Term Of The Day – Preferred Risk
Preferred risk is any risk that is considered to be a better risk. These risks have a lower expectation of incurring loss and if losses are incurred, they will be less significant. For example, a business who has a effective safety program in place can usually get a reduced rate because the chance of accidents occurring are far less.

The premium reduction for the preferred risk results from their E-Mod or Loss Development Factor.
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