Casualty Actuarial Society (CAS) Practice Exam

What dual purpose do security systems serve for a business?

1. Enhancing employee productivity and reducing insurance costs

2. Preventing crime losses and minimizing losses that occur

3. Boosting customer traffic and increasing sales

4. Maintaining a professional image and improving staff efficiency

The correct answer is: Preventing crime losses and minimizing losses that occur

Security systems serve a dual purpose for a business by primarily acting as deterrents against crime and helping to mitigate losses when incidents do occur. By preventing crime, these systems contribute to a safer environment, which reduces the likelihood of theft, vandalism, and other criminal activities that can result in significant financial losses for a business. In addition to preventing crime, well-designed security systems also minimize losses when crimes do happen. For example, they can provide valuable evidence through surveillance footage or enable swift responses from law enforcement, thereby potentially reducing the extent of losses suffered. The combination of crime prevention and loss minimization enhances the overall risk management strategy of the business. While the other options touch on various benefits that might be interconnected with security systems, they do not encapsulate the core dual purpose of crime prevention and loss minimization as effectively as the chosen answer.