LAW 122 Lecture Notes - Lecture 3: Tax Law, Public Law, Punitive Damages
15 Sep 2017
School
Department
Course
Professor
Document Summary
Identification: it would first be necessary for omega inc to identify the risk management problem, by recognizing that one of its widgets contains a design defect that creates the possibility of injury. Identification might involve steps like pre-sale testing and post-sale surveys. Evaluation: having identified the risk of injury, omega inc would then have to evaluate it. Response: after identifying and evaluating the risk, omega inc would be in a position to formulate an appropriate response. In this case, if it has recognized the problem in time, sigma corp might take steps to avoid causing property damage in the first place. The question, however, pertains to ways in which the company can allow losses to occur, but then shift their financial burden onto someone else. First, sigma corp might be able to purchase liability insurance. By doing so, it would pay a price in exchange for an insurance company"s promise to pay for any losses that the defective widgets create.
