CHAPTER 14 1 CHAPTER 14 Risk Management 14

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CHAPTER 14 1 CHAPTER 14 Risk Management 14 -1 Overview of Risk Management 14

CHAPTER 14 1 CHAPTER 14 Risk Management 14 -1 Overview of Risk Management 14 -2 Insurable Risks 14 -3 Uninsurable Risks © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

14 -1 Overview of Risk Management Goal 1 Identify the types of risks facing

14 -1 Overview of Risk Management Goal 1 Identify the types of risks facing businesses. Goal 2 Describe ways that businesses can deal with risks. © 2012 Cengage Learning. All Rights Reserved. SLIDE

CHAPTER KEY TERMS 14 3 ● risk ● economic risk ● personal risk ●

CHAPTER KEY TERMS 14 3 ● risk ● economic risk ● personal risk ● property risk ● liability risk ● pure risk ● controllable risk ● insurance © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

CHAPTER 14 4 IDENTIFYING RISKS ● Types of risks ● Economic and non-economic risks

CHAPTER 14 4 IDENTIFYING RISKS ● Types of risks ● Economic and non-economic risks ● Pure and speculative risks ● Controllable and uncontrollable risks ● Insurable and uninsurable risks © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

CHAPTER 14 5 Checkpoint ● What is a risk? ● Risk is the possibility

CHAPTER 14 5 Checkpoint ● What is a risk? ● Risk is the possibility of incurring a loss. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

CHAPTER DEALING WITH RISKS 14 6 ● Avoid the risk ● Transfer the risk

CHAPTER DEALING WITH RISKS 14 6 ● Avoid the risk ● Transfer the risk ● Insure the risk ● Assume the risk © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

POSSIBLE WAYS TO DEAL WITH RISK Method Avoid Transfer Insure Assume CHAPTER 14 7

POSSIBLE WAYS TO DEAL WITH RISK Method Avoid Transfer Insure Assume CHAPTER 14 7 Activity Choose not to complete the risky activity Find another business to complete the activity Purchase insurance to pay for any losses Complete the activity with full responsibility © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

CHAPTER 14 8 Checkpoint ● Identify four ways that business can deal with risks.

CHAPTER 14 8 Checkpoint ● Identify four ways that business can deal with risks. ● Avoiding the risk ● Transferring the risk ● Insuring the risk ● Assuming the risk © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

14 -2 Insurable Risks Goal 1 Recognize important insurance concepts. Goal 2 Describe several

14 -2 Insurable Risks Goal 1 Recognize important insurance concepts. Goal 2 Describe several types of business insurance. © 2012 Cengage Learning. All Rights Reserved. SLIDE

CHAPTER KEY TERMS 14 10 ● insurer ● insured ● policyholder ● insurance policy

CHAPTER KEY TERMS 14 10 ● insurer ● insured ● policyholder ● insurance policy ● premium ● claim © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

CHAPTER PURCHASING INSURANCE 14 11 ● Insurance basics ● Insurance companies ● Insured losses

CHAPTER PURCHASING INSURANCE 14 11 ● Insurance basics ● Insurance companies ● Insured losses © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

CHAPTER 14 12 Checkpoint ● What information should be considered when selecting an insurance

CHAPTER 14 12 Checkpoint ● What information should be considered when selecting an insurance company? ● When selecting an insurance company, you should collect information about the type and cost of insurance and the quality of service provided by the company if a loss occurs. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

CHAPTER BUSINESS INSURANCE 14 13 ● Insuring personnel ● Health insurance ● Disability insurance

CHAPTER BUSINESS INSURANCE 14 13 ● Insuring personnel ● Health insurance ● Disability insurance ● Life insurance ● Insuring property ● Commercial property insurance ● Vehicle insurance ● Insuring business operations ● Business interruption insurance ● Liability insurance © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

CHAPTER 14 14 Checkpoint ● What are three major areas that can be covered

CHAPTER 14 14 Checkpoint ● What are three major areas that can be covered by business insurance? ● Personnel ● Property ● Business operations © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

14 -3 Risks Uninsurable Goal 1 Describe why some business risks are uninsurable. Goal

14 -3 Risks Uninsurable Goal 1 Describe why some business risks are uninsurable. Goal 2 List the strategies a company can use to reduce the risks of doing business internationally. © 2012 Cengage Learning. All Rights Reserved. SLIDE

CHAPTER KEY TERMS 14 16 ● property rights ● counterfeiting © 2012 Cengage Learning.

CHAPTER KEY TERMS 14 16 ● property rights ● counterfeiting © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

CHAPTER IDENTIFYING AND MANAGING RISKS 14 17 ● Insurable risk ● Risk and amount

CHAPTER IDENTIFYING AND MANAGING RISKS 14 17 ● Insurable risk ● Risk and amount of loss must be predictable ● Uninsurable risk factors ● ● ● Economic conditions Consumer demand Competitors’ actions Technology changes Local factors Business operations © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

CHAPTER 14 18 MANAGING RISKS ● Inform everyone in the business of the types

CHAPTER 14 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 © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

CHAPTER 14 19 Checkpoint ● What are several things businesses can do to manage

CHAPTER 14 19 Checkpoint ● What are several things businesses can do to manage 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. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

RISKS IN INTERNATIONAL BUSINESS CHAPTER 14 20 ● Strategies for reducing risk ● International

RISKS IN INTERNATIONAL BUSINESS CHAPTER 14 20 ● Strategies for reducing risk ● International property rights © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

CHAPTER 14 21 Checkpoint ● Why do U. S. companies have difficulty enforcing intellectual

CHAPTER 14 21 Checkpoint ● Why do U. S. companies have difficulty enforcing intellectual property rights in some international markets? ● Some countries do not enforce property rights laws that protect intellectual property, patents, trademarks, or copyrights, especially when the products of a foreign company are involved. © 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8 e

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