Calculating loss

The following concepts can be used to calculate the actual loss of equipment throughout the year and may be used to determine whether we need to take out additional insurance against the loss of the equipment:

  • Single Loss Expectancy (SLE): The SLE is the loss of one item, for example if my laptop was worth $1,000 and I lost it whilst travelling, then my SLE would be $1,000.
  • Annual Rate of Occurrence (ARO): The ARO is the number of times that an item has been lost in a year; if an IT team lost six laptops in a year the ARO would be dix.
  • Annual Loss Expectancy (ALE): The ALE is calculated by multiplying the SLE by the ARO—in the case of the previous examples then we have $1,000 x 6 =$6,000. The ALE is the total loss in a year. ...

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