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33 Cards in this Set

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