MGSC30H3 Chapter Notes - Chapter 1: Liability Insurance, Risk Management, Property Insurance

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Some risks can be reduced to an acceptable level through. E. g bank that lends to co realize that loan may not be paid: risk reduction precautions back if recession, risk shifting. Chapter 1: risk management and sources of law. Goal is not to eliminate risks but manage them response: risk avoidance. Possible to get wild shot -> broken window. Reducing costs by creating large safety net, or shifting risk by buying an insurance policy? sensible approach, is to hope for the best and pay for any windows that are broken: insurance, exclusion and limitation clauses. Contract in which one party agrees, in exchange for a price to pay a certain amount of money. Liability insurance provides a benefit if the purchaser is held liable for doing something wrong. Property insurance provides a benefit if the purchaser"s property is damaged, lost or destroyed.

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