Question

Allocation: A company maintains an insurance program with the following coverages and associated premiums and costs. 2. Premium 7,500 12,500 70,000 15,000 20,000 Coverage General Liability Auto Workers Comp (self-insured losses) Umbrella Property Employment Practices Liabilty15,000 10,000 Cyber Here are additional factors about this company Division EB 150 10,000,000 20,000,000 10,000,000 DivisionC 100 7,500,000 15,000,000 7,500.000 Division A Headcount 50 ayrol 5,00000 10,00,000 7.500.00 5,000,000 25,000,000 Revenue Replacement 20,000,000 Value Plant & Equipment Prepare a premium allocation schedule including your rationale for the allocation you've selected.

Answer 1

Coverage	Premium	Allocation Basis	Division A	Division B	Division C
General Liability	7,500	Revenue	3,125	2,500	1,875
Auto	12,500	Replacement value- Plant and Equipment	6,666.67	3,333.33	2,500
Workers Comp	70,000	Payroll	15,555.56	31,111.11	23,333.33
Umbrella	15,000	On the basis of other premium allocation	4,742.28	5,901.23	4,356.48
Property	20,000	Replacement value- Plant and Equipment	10,666.67	5,333.33	4,000.00
Employment Practices Liability	15,000	Headcount	2,500	7,500	5,000
Cyber	10,000	Revenue	4,166.67	3,333.33	2,500.00

For Umbrella please refer this

Total allocation before umbrella for all other premiums is

Division A 42,680,56
Division B 53,111,11
Division C 39,208.33

Umbrella has been allocated in the same ratio.