BU353 Study Guide - Midterm Guide: Unemployment Benefits, Life Insurance, Canada Pension Plan
Document Summary
Risk management: identifying and evaluating risks and selecting and managing techniques to adapt to risk exposures. Types of risks: economic effects of risks, financial loss b/ of peril (hazard of source of danger), insurable risks (fire, theft, injury, lawsuit), speculative risk (chance of loss or gain without insurance against loss) Risk avoidance: staying away from situations leading to loss, stifles growth in long run. Risk retention (self-insurance): bear a risk without insurance (risk assumption); Cheaper to assume some risks than to insure against them; most risky. Risk control (risk reduction): adopting techniques to prevent financial losses. Underwriting: review process of all insurance applications and selection of those who meet the standards. Insurable interest: i(cid:374)sura(cid:374)(cid:272)e appli(cid:272)a(cid:374)t"s (cid:272)ha(cid:374)(cid:272)e of loss if a parti(cid:272)ular peril o(cid:272)(cid:272)urs. Insurable risk: risk that insurance company will cover; must meet certain criteria: Loss must not be under the control of the insured: loss must be accidental.
