Get 2 days of premium access

RMI-4347 Study Guide - Spring 2019, Comprehensive Final Exam Notes - Variance, Human Resources, Hazard


Department
Risk Management/Insurance, Real Estate and Legal Studies
Course Code
RMI-4347
Professor
Raab
Study Guide
Final

This preview shows pages 1-3. to view the full 24 pages of the document.
RMI-4347

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

- Risk Identification
o The identification of loss exposures
o Requires an overall understanding of the business and the specific economic,
legal, and regulatory factors that affect the business
o “The difference between a good risk manager and a great risk manager lie in the
subjective areas of instinct and intuition”
- Identifying Business Risk Exposures
o Property
o Business income
o Liability
o Human resource
o External economic forces
- Property Risk Exposures
o Types of commercial property exposed to loss
Real property land, buildings
Personal property money, accounts receivable, inventory &
merchandise, furniture/equipment/supplies, valuable documents,
company vehicles, intangible assets
Non-owned leased, equipment on loan, employees’ property
o Look at each business operation and ask:
What could cause a loss? How serious is that loss?
This is to determine full cost of the loss, not how to get funds to
pay for it
o Identify exposures
Interviews, questionnaires, survey, flow chart analysis, financial
statements, insurance checklists, loss analysis, physical inspection,
contract analysis, published report
o Assess COPE (Construction, Occupancy, Protection, and Exposures)
- Property
o Exposures
Real property, intellectual property, personal property, intangible
property, legal interest for property
o Perils
Windstorm, theft, infringement of intellectual property, loss of property,
obsolescence
o Hazards
Faulty wiring, lack of security, neglect in protection, poor public relations
practices
o Losses
Accidents and occurrences
- Property Value Exposures
o Historical Cost the original purchase price
o Book Value the historical cost less accumulated accounting depreciation
o Market Value the amount a buyer would give a seller
find more resources at oneclass.com
find more resources at oneclass.com
You're Reading a Preview

Unlock to view full version

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

o Replacement Cost the amount to replace a damaged or destroyed piece of
property with new material of like kind
o Actual Cash Value the replacement cost less a reduction for insurance
depreciation or obsolescence
- Business Income Exposures
o Business Interruption
Net income = revenues expenses
“Net income loss” vs. “business income loss”
o Continuing Expenses
Payroll, lease, or rent, interest expense, taxes
o Non-Continuing Expenses
Postage, phone, utilities, advertising, insurance, maintenance
- Net Income
o Exposures loss of property, loss of productivity, reduction of income/assets,
speculative risk
o Perils property, human resources, liability, loss of primary supplier/customer,
weather, market fluctuations, government action
o Hazards poor product positioning, overextension of credit, excessive
borrowing, inadequate investment in research and development
- Liability Exposures
o Involves a third party
o Loss difficult to measure
o Legal landscape hard to navigate
o “Long-tail” on lawsuits
o Non-insurance transfers
Hold-harmless clauses, indemnity provisions
o Contract
- Liability
o Exposures
Types premises and operations, personal injury, products, statutory
Basis tort law, contract law, statutory law
o Perils
Slip and fall premises, product malfunction, work-related injury
o Hazards
Poor housekeeping, poor quality control, lack of safety training and
equipment
o Losses
Legal damages, statutory damages
- Human Resources Exposures
o Government regulations
o Economic conditions
o Technological advances
o Workforce demographics
o Employment practices
find more resources at oneclass.com
find more resources at oneclass.com
You're Reading a Preview

Unlock to view full version