Unit 7 Flashcards
1
Q
A risk that produces only bad outcomes
A
Pure Risk
2
Q
Risk that involves the possibility of either loss or gain
A
Speculative Risk
3
Q
Risk of being held legally accountable for someone else’s losses
A
Liability Risk
4
Q
The likelihood or probability that a loss will occur
A
Frequency of Loss
5
Q
Dollar value of loss if it occurs
A
Severity of Loss
6
Q
Trying to prevent the situation in which the risk could occur
A
Avoid the risk
7
Q
Focus on loss control and putting measures in place to lessen the severity of the risk
A
Reduce the risk
8
Q
Transfer pure risk to someone else- usually an insurance company
A
Transfer the risk
9
Q
Paying for losses out of pocket
A
Retain the risk
