MCS 3040 Chapter Notes - Chapter 3: Debt Management Plan, Insurance Policy

• School: University of Guelph
• Department: Marketing and Consumer Studies
• Course: MCS 3040
• Professor: Joe Radocchia

Document Summary

Wh(cid:455) it"s i(cid:373)porta(cid:374)t for (cid:271)usi(cid:374)esses to assess the legal e(cid:374)(cid:448)iro(cid:374)(cid:373)e(cid:374)t. Reduce the likelihood and impact of mistakes that are: costly in terms of expense of legal services and damage claims, distracting in terms of time and effort, harmful in terms of relationships and reputation. What is a legal risk management plan: a comprehensive action plan for dealing with the legal risks involved in operating a business. Involves the cooperation of managers and employees at every level: may use a variety of methods, such as surveying, interviewing managers and employees, forming committees, or convening a panel of experts. Act: machine breakdown could result in a loss of production and an inability to fulfill contracts, resulting in lawsuits for breach of contract. Step two: evaluate the risks: assess the probability of loss, assess severity of loss. Step three: devise a risk management plan: avoid or eliminate risk, reduce risk, transfer risk, retain risk, self-insurance the organization can establish a funded reserve.