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Shifting risk from one party to another
Reed Keeling
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What are the four common risk mitigation strategies?
Controlling, Avoiding, Transferring and AssumingAvoiding, Mitigating, Transferring, and Accepting
When you are purchasing insurance are you transferring the risk of loss?
yes
What is a retained risk?
A retained risk is when an enterprise decides to keep hold of a risk instead of transferring it by a means of insurance.
What are the four risk strategies for controlling risk?
1. Controlling risk 2. Avoiding risk -(Changing the source that is subjecting the program to risk such as reducing the scope of the performance objectives) 3. Assuming risk 4. Transferring risk
What is risk management and insurance?
Risk management is the process of analyzing a person or entity's exposure to risk of loss. The risk of loss can be loss to property (such as by fire), or economic (such as by employee theft of loss of business). After that, it analyzes available mechanisms to deal with or compensate for that risk. Insurance is one of several risk management techniques. Briefly, it involves transferring the risk of loss to a third party (the insurer). In return, the party transferring the risk (the insured) pays a sum of money (the premium) to the insurer as compensation for accepting the risk of loss.
Is insurance a liability?
No, Insurance is a means of contractually transferring risk including the risk of liability to another entity, namely the Insurance Company issuing the policy.
Which of the following in the best choice when handling risk What is the answer a risk avoidance b Total risk acceptance c Risk reduction and resdual acceptance d Transferring risk?
The best way to handle risk is to reduce it as much as possible by taking steps to ensure success. You never want to blame someone else when you fail.
Will the mother pass the sickness to the child?
If it's an STD, she might not be able to have a vaginal birth due to the risk of transferring the disease to the baby.
What are the factors to consider in personal liability on homeowners policy?
Your net worth, Potential exposures and the cost effectiveness of transferring the risk to an insurer.
What is difference between active passive risk retention?
Retaining risk passively - Understanding the risk without taking any actions to prevent possible outcomes. Active retention - preparing for risk to happen, having plan for in case it would happen. Some form of self insurance (direct insurance would be form of transferring risk.)
What is the purpose of insurance?
An insurance policy is a contract of Indemnity. It is a means of transferring risk of financial loss and or financial liability to another party, Namely the insurance company.
How can a company experience risk?
Risk is, by definition, the likelihood or non-likelihood of a financial loss occuring. The financial loss can be in terms of the loss of money, damage to property, or any other occurrence that has a financial impact upon the business. Insuring is the process of transferring the risk of loss from the entity that bears the risk to an insurer. The insurer agrees to assume the risk in return for a premium. The terms and extent of the transfer of risk is set forth in the insurance contract.
