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

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.

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

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

Introduction to Business © Thomson South-Western Chapter 14 Slide 5 >> C H E C K P O I N T What is a risk?

Introduction to Business © Thomson South-Western Chapter 14 Slide 6 DEALING WITH RISKS Avoid the risk Transfer the risk Insure the risk Assume the risk

Introduction to Business © Thomson South-Western Chapter 14 Slide 7 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

Introduction to Business © Thomson South-Western Chapter 14 Slide 8 >> C H E C K P O I N T Identify four ways that business can deal with risks.

Introduction to Business © Thomson South-Western Chapter 14 Slide 9 LESSON 14-2 Insurable Risks Goals Recognize important insurance concepts. Describe several types of business insurance.

Introduction to Business © Thomson South-Western Chapter 14 Slide 10 Key Terms insurers insured policyholder insurance policy premium claim

Introduction to Business © Thomson South-Western Chapter 14 Slide 11 PURCHASING INSURANCE Insurance basics Insurance companies Insured losses

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?

Introduction to Business © Thomson South-Western Chapter 14 Slide 13 BUSINESS INSURANCE Insuring personnel Health insurance Disability insurance Life insurance Insuring property Insuring business operations

Introduction to Business © Thomson South-Western Chapter 14 Slide 14 >> C H E C K P O I N T What are the three major areas that can be covered by business insurance?

Introduction to Business © Thomson South-Western Chapter 14 Slide 15 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.

Introduction to Business © Thomson South-Western Chapter 14 Slide 16 Key Terms property rights counterfeiting

Introduction to Business © Thomson South-Western Chapter 14 Slide 17 IDENTIFYING RISKS Types of uninsurable risks Economic conditions Consumer demand Competitors’ actions Technology changes Local factors Business operations

Introduction to Business © Thomson South-Western Chapter 14 Slide 18 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

Introduction to Business © Thomson South-Western Chapter 14 Slide 19 >> C H E C K P O I N T What are several things businesses can do to manage risks?

Introduction to Business © Thomson South-Western Chapter 14 Slide 20 RISKS IN INTERNATIONAL BUSINESS Strategies for reducing risk International property rights

Introduction to Business © Thomson South-Western Chapter 14 Slide 21 >> C H E C K P O I N T Why do U.S. companies have difficulty enforcing intellectual property rights in some international markets?