Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE CHAPTER Overview of Risk Management Insurable Risks Uninsurable Risks Risk Management

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Overview of Risk Management Goals Identify the types of risks facing businesses. Describe ways that businesses can deal with risks. 14-1

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 14 3 Key Terms risk economic risk personal risk property risk liability risk pure risk controllable risk insurance

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 14 4 IDENTIFYING RISKS Types of risks Economic and non-economic risks Pure and speculative risks Controllable and uncontrollable risks Insurable and uninsurable risks

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 14 5 What is a risk? Answer Risk is the possibility of incurring a loss. Checkpoint >>

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 14 6 DEALING WITH RISKS Avoid the risk Transfer the risk Insure the risk Assume the risk

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 14 7 Possible Ways to Deal With Risk

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter 14 8 Identify four ways that business can deal with risks. Answer avoiding the risk transferring the risk insuring the risk assuming the risk Checkpoint >>

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Insurable Risks Goals Recognize important insurance concepts. Describe several types of business insurance. 14-2

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter Key Terms insurers insured policyholder insurance policy premium claim

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter PURCHASING INSURANCE Insurance basics Insurance companies Insured losses

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter What information should be considered when selecting an insurance company? Answer When selecting an insurance company, one should collect information about the type and cost of insurance and the quality of service provided by the company if a loss occurs. Checkpoint >>

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter BUSINESS INSURANCE Insuring personnel Health insurance Disability insurance Life insurance Insuring property Insuring business operations

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter What are the three major areas that can be covered by business insurance? Answer personnel property business operations Checkpoint >>

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Uninsurable Risks Goals Describe why some business risks are uninsurable. List the strategies a company can use to reduce the risks of doing business internationally. 14-3

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter Key Terms property rights counterfeiting

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter IDENTIFYING RISKS Types of uninsurable risks Economic conditions Consumer demand Competitors’ actions Technology changes Local factors Business operations

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter MANAGING RISKS Inform everyone in the business of the types of risks that are particularly important to their part of the operations Implement measures to gather information and spot possible problems Inspect facilities and equipment Be active in local communities Build relationships with government officials

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter What are several things businesses can do to manage risks? Answer Inform everyone in the business of the types of risks that are particularly important to their part of the operations. Implement measures to gather information and spot possible problems. Inspect facilities and equipment. Be active in local communities. Build relationships with government officials. Checkpoint >>

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter RISKS IN INTERNATIONAL USINESS Strategies for reducing risk International property rights

Intro to Business, 7e © 2009 South-Western, Cengage Learning SLIDE Chapter Why do U.S. companies have difficulty enforcing intellectual property rights in some international markets? Answer Some countries do not enforce property rights laws that protect intellectual property, patents, trademarks, or copyrights, especially when the products of a foreign company are involved. Checkpoint >>