Chapter 14 Flashcards
(20 cards)
Risk
The possibility of loss, damage, or injury
Natural Risk
A situation caused by acts of nature
Economic Risk
A situation that occurs when business activities suffer due to changes in the US or world economy
Market Risk
The potential that the target market for new goods or services is much less than originally projected
Human Risk
A negative situation cause by the action of people
Risk Management
The process of evaluating risk and finding ways to minimize or manage loss
Controllable Risks
Situations that cannot be avoided, but can be minimized by purchasing insurance or creating a risk management plan
Risk management
The process of evaluating risk and finding ways to minimize or manage loss
Controllable risks
Situations that cannot be avoided, but can be minimized by purchasing insurance or creating a risk management plan
Uncontrollable risks
Situations that cannot be predicted or covered by purchasing insurance
Pure risk
A risk with a possibility of loss, but no possibility of gain
Personal risk
Affect an individual
Property risks
Affect personal or business property
Liability risks
Risks result from the possibility of losing money, property, or other assets because of legal proceedings
Speculative risk
A risk that can result in either financial gain or financial loss
Avoidance
Taking steps to eliminate risk
Reducing
A strategy of minimizing risks that cannot be avoided
Transferring
Sharing the risk with others
Insurance
A financial service used to protect against loss
