Risk Management Exam 1 Liabilities-Nelson Driver

2024-2025 VERSION. SMART PASS SOLUTIONS Risk Management Exam 1 Liabilities-Nelson Driver 4 things about litigation - Answer-1) anybody can sue you 2) they can sue you for virtually any reason 3) they can sue you at any time 4) they can sue you for virtually any amount definition of hazard - Answer-anything that increases the frequency and/or the severity of a loss 3 types of hazards - Answer-Physical, moral, and morale Physical Hazard example - Answer-burned out light bulb over a staircase, skateboarding at night Moral Hazard - Answer-intent to defraud (intentional damage/destruction) Morale Hazard - Answer-an "i don't care attitude"; most difficult hazard to deal with in business Regulatory Compliance - Answer-an organization's adherence to laws, regulations, guidelines and specifications relevant to its business Cash Flow Underwriting - Answer-knowingly selling your product/service below your anticipated cost of loss Why do cash flow underwriting? - Answer-Companies can create a rapid infusion of capital into the company; Establish a footprint; Pickup a greater market share of business insurance contracts are contracts of indemnity - Answer----- how are insurance companies a transfer mechanism - Answer-they transfer the risk of loss in exchange for a fee/premium what do insurance companies look for when