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Define and give and example of a property exposure.
a property loss exposure is define as the possibiliy that a person or an organization will sustain a financial loss as the result of the damaging, destruction, taking, or loss of use ofporeperty in which that person or organization has a financial interest
Example: possibility that a tornado will damage a building.
Define and give an example of a liability loss exposure.
a liability loss exposure is defines as the possibility that a person or an organization will sustain a financial loss as the result of a cleam by someone seeking monetary damages or some other legal remedy.
Example: possibility that a sutomer who is hospuitatlized for food poisoning immediately after eating in a restaurant will sue the restaurant owner for damages.
Define and give an example of a personal loss exposure.
a personal loss exposure is defined as the possibility that a person or an organization will sustain a financial loss as the result of a cleaim by someon eseeking monetary damages or some other legal remedy.
Example: possibility of financial loss to a person caused by injury, sickness, or death. Anyone who could be infjured on the job or in an auto accident has a personal loss exposure.
Summarize the risk management process
- 1. identify loss exposures
- 2. analyzing loss exposures
- 3. examinging the feasibility of risk managaement techniques.
- 4. Selecting the appropriate risk management techniques.
- 5. Implementing the selected risk management techniques.
- 6. Monitoring result and revising the risk management program.
List and briefly describe 5 risk management techniques.
- 1. Insurance:Transfer financial consequences ofa loss to an insurer.
- 2. Avoidance: avoid by not owning a particular item or property or not engaging in certain activity.
- 3. Loss control: any measure to prevent losses from occurring. Or to reduce the size of losses that do occure.
- 4. Retention: pays all or party of its own losses.
- 5. Noninsurance transfer- occurs when an organization (such as a building owner) obatins the promise of a second, noninsurance organization (such as a remodeling contractor) to pay for certain losses for which the first organixation would otherwise be responsible.
The toy corporation owns a commercial building located near a large river. TC manufactors children's toys and owns a substantial amount of stock and equipment in its buildings.
Identify: 2 property exposures, two liability, and..
risk managment tech. other than insr that TC can use to mitigate its risk of fire or explosion and its risk of liability loss when hiring a remodeling contractor.
- property: fire or flood damaging building, stock and equipment.
- liability: financial loss from a claim if a toy it manufactored is defective and jinures a child. or injured on TC premises.
- Risk Mgmt: To mitigatwe its risk of fire or explosion, TC can use the loss control risk management tech. To mitigate its risk of liability loss when hiring a remodeling contractor, TC can use the noninsurance transfer risk mgt tech.