Risk Management and Insurance

by Trieschmann, James S.; Hoyt, Robert; Sommer, David

• ISBN13: 9780324183207
• ISBN10: 0324183208
• Edition: 12th
• Format: Hardcover
• Copyright: 2004-07-28
• Publisher: South-Western College Pub

Summary

This proven, market-leading text provides a thorough, current introduction to risk management and insurance. It assists the learner inidentifying, analyzing, and managing risk through insurance and alternative tools/techniques such as loss control, risk retention, and risktransfer. This edition presents an even stronger focus on managing risk and covers insurance within this context. Concepts of riskmanagement are presented as they apply to business and personal situations as well as international situations.

Table of Contents

PART 1 RISK AND THE RISK MANAGEMENT PROCESS	1	(152)
Introduction to Risk	2	(13)
The Burden of Risk	3	(1)
Definitions of Risk	4	(2)
Sources of Risk	6	(2)
Measurement of Risk	8	(3)
Management of Risk	11	(4)
Risk Identification and Evaluation	15	(17)
Risk Identification	16	(2)
Risk Evaluation	18	(8)
Accuracy of Predictions	26	(6)
Property and Liability Loss Exposures	32	(22)
Property Loss Exposures	33	(1)
Liability Exposures	34	(1)
Types of Liability Damages	35	(2)
Criminal and Civil Law	37	(1)
Torts	38	(1)
Basic Law of Negligence	38	(1)
Defenses Against Negligence Claims	39	(1)
Factors Leading to Higher Standards of Care	40	(3)
Types of Liability Exposures	43	(9)
Miscellaneous Liability	52	(2)
Life, Health, and Loss of Income Exposures	54	(21)
Exposures Due to Premature Death	55	(8)
Exposures Due to Loss of Health	63	(6)
Other Income Loss Exposures	69	(6)
Risk Management Techniques: Noninsurance Methods	75	(14)
Risk Avoidance	76	(1)
Loss Control	76	(4)
Risk Retention	80	(3)
Risk Transfer	83	(2)
The Value of Risk Management	85	(4)
Insurance as a Risk Management Technique: Principles	89	(23)
The Nature of Insurance	90	(1)
Principle of Indemnity	90	(1)
Principle of Insurable Interest	91	(2)
Principle of Subrogation	93	(1)
Principle of Utmost Good Faith	94	(3)
Requisites of Insurable Risks	97	(4)
Requirements of an Insurance Contract	101	(1)
Distinguishing Characteristics of Insurance Contracts	102	(1)
Role of Agents and Brokers	103	(2)
Principles of Social Insurance	105	(2)
Social and Economic Values and Costs of Insurance	107	(5)
Insurance as a Risk Management Technique: Policy Provisions	112	(21)
Declarations	113	(1)
The Insuring Agreement	113	(1)
Exclusions	114	(2)
Common Policy Conditions	116	(5)
Definitions	121	(1)
Basis of Recovery	121	(1)
Clauses Limiting Amounts Payable	122	(11)
Selecting and Implementing Risk Management Techniques	133	(20)
Avoid Risks If Possible	134	(1)
Implement Appropriate Loss Control Measures	134	(4)
Select the Optimal Mix of Risk Retention and Risk Transfer	138	(5)
Implementing Decisions	143	(4)
Subjective Risk Management	147	(1)
Enterprise Risk Management and Alternative Risk Transfer	147	(6)
PART 2 COMMERCIAL RISK MANAGEMENT APPLICATIONS: Property--Liability	153	(86)
Risk Management and Commercial Property---Part I	154	(19)
The Commercial Package Policy (CPP)	155	(6)
Business Owners Policy	161	(1)
Other Commercial Property Forms	161	(2)
Reporting Forms	163	(1)
Consequential Loss Coverage	163	(10)
Risk Management and Commercial Property---Part II	173	(24)
Transportation Insurance	174	(3)
Ocean Transportation Insurance	177	(6)
Land Transportation Insurance	183	(1)
Floater Contracts	184	(1)
Credit Insurance	185	(2)
Title Insurance	187	(1)
Glass Coverage Form	188	(1)
Crime	188	(5)
Disaster Risk Management: A Case Study	193	(4)
Risk Management and Commercial Liability Risk	197	(19)
Common Liability Contract Provisions	198	(6)
Commercial Liability Insurance	204	(12)
Workers' Compensation and Alternative Risk Financing	216	(23)
Workers' Compensation Insurance	217	(1)
Major Reform	217	(8)
Risk Management and Workers' Compensation	225	(9)
Captive Insurance Companies	234	(2)
Conclusions	236	(3)
PART 3 PERSONAL RISK MANAGEMENT APPLICATIONS: Property---Liability	239	(80)
Risk Management for Auto Owners---Part I	240	(24)
The High Cost of Automobile Losses	241	(1)
Insurance Claims	241	(1)
The Need for Insurance	242	(1)
Personal Automobile Policy	243	(2)
Personal Auto Policy Components	245	(11)
Automobile Insurance and the Law	256	(2)
Risk Management and Personal Automobile Rating	258	(6)
Risk Management for Auto Owners---Part II	264	(14)
Where Does the Auto Insurance Premium Go?	265	(1)
Auto Death Rates	266	(1)
Car Theft	267	(1)
Cost Containment	268	(2)
No-Fault	270	(3)
Alcohol and Driving	273	(1)
Advances in Driver and Auto Safety	274	(1)
Airbags, Auto Property Damage, and Teenage Drivers	275	(3)
Risk Management for Homeowners	278	(41)
Homeowners' Program: Development	280	(1)
Outline of Homeowners' Coverages	281	(1)
Analysis of Homeowners' Policy	282	(7)
Perils Covered in Homeowners' Insurance	289	(6)
Optional Property Endorsements to Homeowners' Policies	295	(3)
Flood Insurance	298	(1)
Personal Articles Floater (PAF)	298	(1)
Mobile Home Endorsement to Homeowners' Policy	299	(1)
Shopping Tips for Homeowners	299	(1)
Personal Liability and Medical Payments Insurance	300	(6)
Dwelling Program (Not Homeowners')	306	(2)
Farmowners'-Ranchowners' Policy	308	(1)
Risk Management---Personal Lines	308	(2)
Personal Risk Management	310	(9)
PART 4 RISK MANAGEMENT APPLICATIONS: Life, Health, and Income Exposures	319	(132)
Loss of Life	320	(25)
Types of Life Insurance	321	(9)
Income Tax Treatment of Life Insurance	330	(1)
Life Insurance Contract Provisions	331	(14)
Loss of Health	345	(24)
Health Insurance Providers	346	(3)
Mechanics of Cost Sharing	349	(2)
Health Expense Insurance	351	(6)
Disability Income Insurance	357	(2)
Health Insurance Policy Provisions	359	(2)
Health Care Reform	361	(8)
Retirement Planning and Annuities	369	(13)
Structure of Annuities	370	(1)
Annuity Characteristics	371	(5)
Annuity Taxation	376	(6)
Employee Benefits: Life and Health Benefits	382	(22)
Reasons for Employee Benefits	383	(1)
Premature Death Benefits	384	(6)
Health Expense Benefits	390	(9)
Disability Income Benefits	399	(5)
Employee Benefits: Retirement Plans	404	(23)
Social Security Retirement Benefits	405	(3)
Pension Plans	408	(2)
Plan Qualification	410	(8)
Deferred Profit-Sharing Plans	418	(1)
Employee Savings Plans	419	(2)
Individual Retirement Accounts	421	(1)
Simple Plans	422	(1)
Keogh Plans	423	(1)
Section 403(b) Plans	423	(4)
Financial and Estate Planning	427	(24)
Financial Planning	428	(1)
Estate Planning	428	(8)
A Case Study: The Johnson Family	436	(8)
Considerations in Buying Life and Health Insurance	444	(7)
PART 5 THE RISK MANAGEMENT ENVIRONMENT	451	(1)
Risk Management and the Insurance Industry	452	(20)
The Field of Insurance	453	(3)
Types of Insurers	456	(5)
Channels of Distribution in Insurance	461	(5)
Globalization of Risk Management and the Insurance Industry	466	(6)
Functions and Organization of Insurers	472	(22)
Functions of Insurers	473	(15)
Reinsurance	488	(6)
Government Regulation of Risk Management and Insurance	494	(1)
Why Insurance Is Regulated	495	(1)
The Legal Background of Regulation	496	(1)
The McCarran-Ferguson Act	497	(2)
Federal Versus State Regulation	499	(2)
Responsibilities of the Insurance Regulators	501	(5)
Miscellaneous Insurance Laws	506	(2)
Tort Reform	508	(1)
Taxation of Insurance	508
APPENDIXES
A Present Value and Annuity Tables	1	(1)
B Personal Automobile Policy	1	(1)
C Homeowners 3---Special Form	1	(1)
D Sample Whole Life Insurance Policy with Riders	1	(1)
E Disability Income Insurance Policy	1	(1)
Glossary	1	(1)
Index	1