1. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 1 Risk Management and Insurance

2. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 2 Protection Against Risk Fire Lawsuits Accidents Natural disasters Theft Illness Disability Death

3. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 3 Understanding Risk Speculative Pure Insurable Uninsurable

4. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 4 Insurable Risk Criteria Accidental Beyond the insured’s control Financially measurable Large number of similar cases Spans a wide geographical area Financially serious loss

5. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 5 Risk Management Assessing risk Controlling risk Financing risk

6. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 6 Assessing Risk Loss of property Loss of income Legal liability Loss of services

7. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 7 Controlling Risk Risk avoidance Loss prevention Loss reduction Risk-control transfer

8. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 8 Shifting Risk to an Insurance Company Property insurance Consequential loss Liability insurance Key-person insurance

9. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 9 Property Insurance Replacement cost Actual cash value Functional replacement cost

10. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 10 Consequential Loss Insurance Business interruption Extra-expense Contingent business interruption

11. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 11 Liability Insurance Legal damages Legal defense Loss prevention

12. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 12 Types of Liability Policies Commercial general Product Automobile Professional Employment practices Excess liability

13. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 13 Key-Person Insurance Illness Disability Death Retirement

14. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 14 Self-Insurance Predict potential losses Make adequate financial arrangements Obtain stop-loss insurance

15. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 15 Monitoring Risk Management What does the company have? What can go wrong? What do we need to stay in business? What’s the best way to protect assets?

16. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 16 Employee Insurance Health insurance Disability income Worker’s compensation Life insurance

17. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 17 Health insurance Basic medical Major medical Disability income Medicare supplement Long-term care

18. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 18 Rising Cost of Medical Care Drugs Hospitals Lawyers Consumers State mandates

19. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 19 Cost Containment Measures Preferred-provider organization (PPO) Health-maintenance organization (HMO) National health insurance

20. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 20 Disability Insurance Partial or total Temporary or permanent Short-term or long-term

21. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 21 Worker’s Compensation Loss of income Medical expenses Rehabilitation Death benefits

22. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 22 Life Insurance Credit life Term life Whole life Variable life Universal life

23. © Prentice Hall, 2005Excellence in Business, Revised Edition Component B - 23 Social Insurance Program Social security Unemployment insurance