LAW 122 Study Guide - Midterm Guide: Chronicle, Liability Insurance, Property Insurance
25 Apr 2012
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Goal of business is to make money. Knowledge of law leads to greater risk management, reduces potential costs, increases potential profits. Legal education plays a critical role in risk management. Basic understanding of the law makes you a better person. The process of identifying, evaluating, and responding to the possibility of harmful events . Avoidance - not engage in risky business activity (not sell certain product or service ie. cars with exploding fuel tanks) Some risks are so serious that they should be avoided altogether. Reduction - reduce occurrence of risk by modifying business practices (wiping floor if wet) Some risks can be reduced to an acceptable level. Shifting shift risk to another party through contract or through insurance policy (purchase insurance for car accident) If a risk cannot be avoided or reduced, it may be shifted onto another party. Acceptance sometimes appropriate for business to accept the risk (lucrative contract)
