1. Mrs. A. Smith
Risk Management

2. Risk Management
Managing the risks that are involved in running a business.
Risk are inevitable.

3. “If you construct a building, you run the risk that it will be destroyed by fire…”

4. 2 Types of Risk
Pure risk
Speculative risk

5. Pure Risk Defintion: Examples:
The threat of a loss to your business without any possibility of gain.
Examples:
The threat of employee theft, burgulary, and robbery are pure risks to a business.
Natural disasters (such as floods, earthquakes, and tornadoes) also pure risks.
Accidents involving employees and customers are also pure risks.

6. Speculative Risk Definition: Example:
a risk that involves the chance of either profit or loss.
Example:
Most business decisions, such as marketing a new product, involve speculative risks. If the product succeeds in the market, you realize a profit. If it does not, you have losses.

7. “If you construct a building, you run the risk that it will be destroyed by fire.” What type of risk am I?

8. “What Kind of risk Am I?” Activity

9. Insurance
A practice or arrangement whereby a company provides a guarantee of compensation for specified forms of loss, damage, injury or death.
Types of insurance include automobile, health, renter's, homeowner's, disability and life.

10. 4 Risk Management Methods
Avoid
Reduce
Assume
Shift

11. Risk Management Methods
Avoid—the act of avoiding a crime
Reduce—can not avoid risks, but reduce risks. Ex: lower chances of accidents