1. Appendix Managing Risk
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2. Managing Risk Types of Risk Reduce Risk Avoid Risk Self-Insure
Buy Insurance
Uninsurable Risk
Insurable Risk
Law of Large Numbers
Rule of Indemnity
Sources of Insurance
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3. Types of Risk Pure Risk Potential for Loss with no Potential for Gain
Speculative Risk
TA Risk Appendix-1 Managing Risk
1. This acetate differentiates between pure and speculative risk. This information is also covered in the risk appendix.
2. See if students can cite specific examples of pure and speculative risk. This will ensure that they fully comprehend both concepts.
3. This is also a good time to reinforce the fact that all businesses are subject to risk in their operations. It could also be an opportune time to remind them about the risk involved in the investments market.
Potential for Loss with Possibility for Gain
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4. Types of Uninsurable Risk
On Strike
Expiration of Patents/Copyrights
Operative Losses
Strikes
TA Risk Appendix-2 Types of Uninsurable Risk
1. This acetate lists the business risks that are not insurable. It might be helpful to go over each category listed and make sure that students know why insurance companies refuse to provide coverage for these risks.
2. In case any students in class remember the National Football League and Major League Baseball players strike, they may cite insurance was used in both instances. Inform students that the strike insurance in both cases was provided by Lloyd’s of London and not covered by traditional insurance companies.
3. See if students can cite any unique types of insurance that they are familiar with or have read about. They could even be assigned to find an example of an unique type of insurance coverage a company or individual purchased to deal with risk.
Changes in Law
New Products
Price Fluctuations
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5. Types of Insurance Health Disability Workers’ Compensation Liability
HMO
PPO
Disability
Workers’ Compensation
Liability
Other Business Insurance
Life Insurance for Business
Home-Based Business
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6. Deaths per 100,000 workers (average for all jobs = 4.8)
Riskiest U.S. Jobs
Deaths per 100,000 workers (average for all jobs = 4.8)
TA Risk Appendix-3 Riskiest U.S. Jobs
1. This acetate reflects the high risk jobs in the U.S. When reviewing this acetate remind students that the U.S. has a very strict Occupational Health and Safety Administration, that regulates safety on jobs.
2. It is interesting to note to students that most of the high risk jobs are outdoor related with the exception of Airplane Pilot which could probably be placed in that category when you consider that job is affected by the elements of weather.
3. When students see commercial fishing ranked as high as it is, you might want to ask how many of them saw the movie “The Perfect Storm” or read the book “Moby Dick”. These are exceptional portrayals of the dangers of fishing but kind of pale in some ways when we think of the dangers of Alaskan fisherman working in the bitter polar environment. See what information students can provide.
Source: Bureau of Labor Statistics
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7. Areas of Potential Risk in E-Commerce
Media Liability
Errors and Omissions
Loss of Service
TA Risk Appendix-4 Areas of Potential Risk in E-Commerce
1. This acetate reflects the areas of risk for a relatively new field- e-commerce.
2. While legal theories are still in the formative stages, the areas of potential risk are well known:
Media Liability- even companies that merely advertise on the Internet with a simple web site can be liable for unauthorized use of copyrighted material and trademarks. Also, potential problems can surface with issues relating to libel, slander, defamation and privacy.
Errors and omissions- businesses that design and program web sites for others can be held accountable for mistakes that cause problems with their clients’ computer networks.
Loss of service- companies engaged in widespread Internet commerce will inevitably face downtimes when transactions cannot be conducted on the Web.
These are not problems that your regular insurance policy is going to respond to. It’s necessary to weigh the cost of protection against the potential of cost exposure.
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