Risk Management's general philosophy is to minimize the cost of risk and maximize protection of company assets through various techniques outlined below.

General Philosophy and Objectives

1. To recognize that while insurance is one useful risk management technique, the prevention of loss is always primary.
2. To retain (i.e., to "self-insure") all exposures which have a predictable loss frequency and loss severity when:
• Insurance is not required by law or contract,
• The loss potential is not catastrophic, and
• The annual insurance premium exceeds the predicted annual value of the losses.
3. To purchase insurance, if available, at the lowest practical cost commensurate with quality protection and services when a loss potential is too great or cannot be controlled.
4. To apply the most cost effective deductible amounts when insurance is purchased, consistent with financial conservation.
5. To purchase insurance with policy limits equal to the Maximum Foreseeable Loss (MFL) of any exposure that is not retained.
6. To transfer financial loss exposures which cannot be retained or are considered catastrophic, whenever possible, to insurers or other third parties by contractual agreement.