Advantages and Disadvantages Flashcards
what type of risk control reduces frequency to 0?
avoidance
what type of risk control may not be possible, has an opportunity cost, and may create another loss exposure?
avoidance
what type of risk financing - retention can help a firm when insurance is too expensive or difficult to obtain?
captive insurance company
what type of risk financing - retention has lower costs since he has no agent or broker commission and interest earned on invested premium?
captive insurance company
what type of risk financing - retention has easier access to reinsurance market?
captive insurance
what type of risk financing - retention has possibility tax advantages and possibility of favorable regulatory environment?
captive insurance company
what type of risk financing helps save on lost costs and expenses?
retention
what type of risk financing encourages loss prevention and increases cash flow?
retention
what type of risk financing creates possible higher losses, expenses, and taxes?
retention
what type of risk financing can transfer some losses that are not insurable?
non insurance transfer
what type of risk financing is less expensive and can transfer loss to someone who is in a better position to control losses?
non insurance transfer
what type of risk financing has ambiguous contract language where the transfer may fail?
non insurance transfer
what type of risk financing has the firm be responsible if the other party fails to pay?
non insurance transfer
what type of risk financing might insurers not give credit for transfers?
non insurance transfer
what type of risk financing lets the firm be indemnified for losses and is able to continue to operate?
commercial insurance
what type of risk financing reduces uncertainty?
commercial insurance
what type of risk financing allows a firm to receive valuable risk management services?
commercial insurance
what type of risk financing has premiums that are income-tax deductible?
commercial insurance
what type of risk financing has more costly premiums?
commercial insurance
what type of risk financing has negotiations that take time and effort?
commercial insurance
what type of risk financing has annual policies?
commercial insurance
what type of risk financing may have a risk manger who becomes more lax in exercising loss control ?
commercial insurance
what enables a firm to attain its pre loss and post loss objectives more easily?
risk management
what allows society to benefit because both direct and indirect losses are reduced?
risk management
what can reduce a firm’s total cost of risk?
risk management
