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33 Cards in this Set
- Front
- Back
Enterprise in Risk management
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ERM, usually has a few well defined goals, such as which risks the program will manage, what risk management processes, techonolgies and investments will be required, and how risk management efforts will be coordinated across the firm
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risk
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the change of loss, the degree of probability of loss, and the amount of possible loss
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speculative risk
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a chance of either profit or loss
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pure risk
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the threat of loss with no chance for profit
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options for firms about risk
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reduce the risk, avoid the risk, self insure against the risk, buy insurance against the risk.
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self insurance
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practice of setting aside money to cover routine claims and buying only catastrophe policies to cover big loses
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uninsurable risk
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a risk that no insurance company will cover
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insurable risk
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a risk that the typical insurance company will cover
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insurable interest
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the possibility of the policy holder to suffer a loss
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unemployment compensation
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provides financial benefits, job counseling and placement services for unemployed workers
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social security
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provides retirements benefits, life insurance, health insurance, and disability income insurance
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federal housing administration
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FHA, provides mortgage insurance to lenders to protect against default by home buyers
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national flood insurance association
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provides compensation for damage caused by flooding and mud slides to properties located in flood prone areas
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federal crime insurance
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provides insurance to property owners in high crime areas.
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federal crop insurance
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provides compensation for damaged crops
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pension benefit guaranty corporation
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insures pension plans to prevent loss to employees if the company declares bankruptcy or goes out of business
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insurance policy
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a written contract between the insured and an insurance company that promises to pay for all or part of a loss
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premium
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the fee charged by an insurance company for an insurance policy
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claim
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a statement of loss that the insured sends to the insurance company to request payment
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law of large numbers
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principle that if a large nubmer of people are exposed to the same risk, a predictable number of losses will occur during a given period of time
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rule of indemnity
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rule of saying that an insured person or organization cannot collect more than the actual loss from an insurable risk
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stock insurance company
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a type of insurance company owned by stockholders
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mutual insurance
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a type of insurance company owned by its policy holders
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health maintenance organizations
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HMOs, health care organizations that require members to choose from a restricted list of doctors
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preferred provide organizations
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PPOS, health care organizations similar to HMOs except hat they allow members to choose heir own physicians (for a fee)
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health savings account
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HSAs, tax deferred savings accounts linked to low cost high deductible health insurance policies.
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disability insurance
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pays income while the insured is disabled as a result of accident or illness
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professional liability
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protects from suites stemming form mistakes made or bad advice given in a professional context. also called malpractice insurance
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worker's compensation
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guarantees payment of wages medical care, and rehabilitation services for employees injured on the job.
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product liability
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covers liability arising out of products sold
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life insurance
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ensure that htose left behind will be able to continue the business,entrepreneurs buy life insurance that will pay partners and others what they need to keep the firm going.
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homeowner's policies
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usually don't have adequate protection for a home based business
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rider
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increased coverage on homeowner's policies insurance.
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