FIN 502 Chapter Notes - Chapter 9: Moral Hazard, Ex-Ante, Liability Insurance
Document Summary
Pure risk- possibility of loss only: eg early death, disability, theft of your car, ones that happen to us without is having mode a conscious choice to seek them out. General categories personal, life and health; property; liability. Most canadians think risk of liability means 3rd party liability insurance on a car. If you cause harm to another person with your car. Other liabilities could be just as material required to ensure that your property does not pose a danger to a reasonable person. Limited companies also liable for their actions. Limited liabilities- investors are not responsible beyond the amount of money paid for investment. Incorporated businesses and professionals are personally liable without limits for all loses they cause losses to customers, creditors, 3rd party. Unlimited liability most important reason why most small businesses incorporate: otherwise the owners put not only their direct investment at risk but also. Evaluating the risk virtually everything else they own.