14-1 Overview of Risk Management
 

RISK – the possibility of incurring a loss

ECONOMIC RISK – a risk that can result in financial loss

PERSONAL RISK – a risk that can result in personal losses such as health and personal well-being

PROPERTY RISK – a risk that can lead to loss of personal or business property including money, vehicles, and buildings

LIABILITY RISK – relates to harm or injury to other people or their property because of your actions

NON-ECONOMIC RISKS – may result in inconvenience or embarrassment but do not have a financial impact (deciding to take part in a talent show)

PURE RISK – a risk that presents the chance of loss but no opportunity for gain (severe weather)

SPECULATIVE RISK – offer the chance either to gain or to lose (investing in a new business)

CONTROLLABLE RISK – a risk you can reduce by actions you take (wearing your seatbelt, installing a security system)

UNCONTROLLABLE RISK – cannot be reduced by your actions (a sudden hailstorm or an early freeze)

INSURANCE – exchanges the uncertainty of a possible large financial loss for certain smaller payment

INSURABLE RISK – when a large number of people face a given risk and the cost of possible losses can be predicted

UNINSURABLE RISK – if a risk is not common or if it is impossible to predict the amount off the loss that could be suffered

Assignments:

  Go to Online Resources. Select Chapter 14.

  1 - Click on and complete the Crossword Puzzle

  2 - Click on Online Quiz Prep. Take the Web Quiz. 

  3 - Click on Study Tools

        Lesson 1 – Types of Risks

         Lesson 2 – Insurable Risks

         Lesson 3 – Uninsurable Risks