1. Introduction to Business © Thomson South-Western ChapterChapter Risk Management 14-1 14-1Overview of Risk Management 14-2 14-2Insurable Risks 14-3 14-3Uninsurable Risks 14

2. Introduction to Business © Thomson South-Western Chapter 14 Slide 2 LESSON 14-1 Overview of Risk Management Goals Identify the types of risks facing businesses. Describe ways that businesses can deal with risks.

3. Introduction to Business © Thomson South-Western Chapter 14 Slide 3 Key Terms risk economic risk personal risk property risk liability risk pure risk controllable risk insurance

4. Introduction to Business © Thomson South-Western Chapter 14 Slide 4 IDENTIFYING RISKS Types of risks Economic and non-economic risks Pure and speculative risks Controllable and uncontrollable risks Insurable and uninsurable risks

5. Introduction to Business © Thomson South-Western Chapter 14 Slide 5 DEALING WITH RISKS Avoid the risk Transfer the risk Insure the risk Assume the risk

6. Introduction to Business © Thomson South-Western Chapter 14 Slide 6 POSSIBLE WAYS TO DEAL WITH RISK MethodActivity AvoidChoose not to complete the risky activity TransferFind another business to complete the activity InsurePurchase insurance to pay for any losses AssumeComplete the activity with full responsibility

7. Introduction to Business © Thomson South-Western Chapter 14 Slide 7 >> C H E C K P O I N T What is a risk? Identify four ways that business can deal with risks.

8. Introduction to Business © Thomson South-Western Chapter 14 Slide 8 LESSON 14-2 Insurable Risks Goals Recognize important insurance concepts. Describe several types of business insurance.

9. Introduction to Business © Thomson South-Western Chapter 14 Slide 9 Key Terms insurers insured policyholder insurance policy premium claim

10. Introduction to Business © Thomson South-Western Chapter 14 Slide 10 PURCHASING INSURANCE Insurance basics Insurance companies Insured losses

11. Introduction to Business © Thomson South-Western Chapter 14 Slide 11 BUSINESS INSURANCE Insuring personnel Health insurance Disability insurance Life insurance Insuring property Insuring business operations

12. Introduction to Business © Thomson South-Western Chapter 14 Slide 12 >> C H E C K P O I N T What information should be considered when selecting an insurance company? What are the three major areas that can be covered by business insurance?

13. Introduction to Business © Thomson South-Western Chapter 14 Slide 13 LESSON 14-3 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. Introduction to Business © Thomson South-Western Chapter 14 Slide 14 Key Terms property rights counterfeiting

15. Introduction to Business © Thomson South-Western Chapter 14 Slide 15 IDENTIFYING RISKS Types of uninsurable risks Economic conditions Consumer demand Competitors’ actions Technology changes Local factors Business operations

16. Introduction to Business © Thomson South-Western Chapter 14 Slide 16 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

17. Introduction to Business © Thomson South-Western Chapter 14 Slide 17 RISKS IN INTERNATIONAL BUSINESS Strategies for reducing risk International property rights

18. Introduction to Business © Thomson South-Western Chapter 14 Slide 18 >> C H E C K P O I N T What are several things businesses can do to manage risks? Why do U.S. companies have difficulty enforcing intellectual property rights in some international markets?