An insurance policy for total abandonment of an arranged cricket match would exclude loss of profit or consequential loss of any description.
The basic underlying principle is one of spreading the risk as far and wide as possible.
The maximum amount of risk which the insurer keeps on his books and which varies from risk to risk is called retention of the insurer with respect to the risk.
Under facultative reinsurance it is not obligatory for the ceding company to cede to any particular risk, nor is it obligatory for the accepting companyto accept the ceding Companys each and every offer.
Under treaty reinsurance agreement the ceding company is bound to cede and the reinsurers are bound to accept each and every cession which falls within the scope of the treaty.
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