Introduction to Business Chapter 37 Fundamentals of Insurance Essential Question: Why is it important to insure ourselves against economic risk?

Standards addressed: 1.2 Business Environment (C): Students will understand the development and structure of business environments. They will demonstrate competency by identifying the dynamic components of business structure and its relationship to the global business environment. 1.2.2 Business Law–describe the sources of law, the structure of the court systems and ways in which these laws apply to basic consumer and business transactions. 1.2.4 Competitive Environment–explain the economic effects of competition on a business in an international marketplace. 1.2.8 Interrelationships of Business Operations–discuss the interrelationships between different business lines as they relate to finance, tax, operations, human resources, marketing, production, management, and the legal environment. 1.4 Economics and Financial Concepts (C): Students will understand the impact of global and domestic businesses, financial concepts, and integrated business models. They will demonstrate competency by using appropriate technology and other resources to solve business problems. 1.4.1 Business/Financial Relationships–analyze the financial implications of various functions of a business and describe how they interrelate 1.4.2 Demographics–interpret demographic data and explain its impact on the economy. 1.4.3 Economic Culture–explain how culture affects economic practice and business ethics

Chapter Objectives Discuss various types of insurance and how economic risk can be avoided. Describe insurance, coinsurance and the kinds of losses that can be covered. List factors that affect the cost of insurance coverage.

What is risk? p. 511. Personal risks are risks associated with: Illness Disability loss of income Unemployment old age premature death Property risks are risks of damage or loss due to: Theft Wind Fire Flood some other hazard Liability risks are potential losses to others that occur as a result of injury or damage that you may have caused.

Sharing economic risk p. 511 Sharing risks with others can help policyholders protect themselves against economic losses.

Insurance p. 512 Insurance is the planned protection provided by sharing economic losses. Both consumers and businesses are able to buy insurance to cover almost any kind of economic loss.

Cost of insurance p. 515 The cost of insurance is influenced by factors such as: age of the person being insured the type of property at risk the number of claims the insurance company pays over a period of time.

Purchasing insurance p. 516 Can be purchased from a large company or from an independent agent.

Insurance for economic security p. 516 Small losses can be covered by individual. Insurance is meant to protect individuals and businesses from real financial hardship. Also meant to provide additional security to lien holder. For example mortgage or foreclosure insurance, allowing buyers to put less down on a home.

Assignments Do Now Monday--Calculate Business Data p.520 #35 Tuesday--Calculate Business Data p.520 #38 Wednesday--Calculate Business Data p.520 #39 Read example and calculate answer in an Excel spreadsheet, show your work. Give a short explanation as to your answers. Workshop Discussion Communicate Business Concepts questions 11-16 p. 518. Discuss questions with your group and write a brief answer to both questions

Homework Define Key Terms Develop your Business Language 519. Crossword Puzzle Answer Review your reading questions 1-10 p. 518. The Resume Handbook for High School Students.