Chapter 1 Flashcards

1
Q

Risk Source

A

Element which alone or in combination has the intrinsic potential to give rise to risk

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2
Q

Loss Exposure

A

Any condition or situation that presents a possibility of loss, whether or not an actual loss occurs

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3
Q

Personal Property

A

All tangible or intangible property that is not real property

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4
Q

Pure Risk

A

A chance of loss or no loss, but no chance of gain

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5
Q

Property Loss Exposure

A

A condition that presents the possibility that a person or organization will sustain a loss resulting from damage (including destruction, taking, or loss of use) to property in which that person or organization has a financial interest

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6
Q

Objective Risk

A

The measurable variation in uncertain outcomes based on facts and data

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7
Q

Liability Loss Exposure

A

Any conditon or situation that presents the possibility of a claim alleging legal responsibility of a person or business for injury or damage suffered by another party

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8
Q

Physical Hazard

A

A tangible characteristic of property, persons, or operations that tends to increase the frequency or severity of loss

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9
Q

Personal loss exposure

A

Any condition or situation that presents the possibility of a financial loss to an individual or a family by such causes as death, sickness, injury, or unemployment

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10
Q

Pre-loss goals

A

Goals to be accomplished before a loss, involving social responsibility, externally imposed goals, reduction of anxiety, and economy

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11
Q

Post-loss goals

A

Risk management program goals that should be in place in the event of a significant loss

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12
Q

Risk Management

A

The process of making and implementing decisions that will minimize the adverse effects of accidental losses on an organization

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13
Q

Liquidity Risk

A

The risk that an asset cannot be sold on short notice without incurring a loss

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14
Q

Net Income Loss exposure

A

A condition that results in a decrease of revenue, an increase in expenses, or both

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15
Q

Subjective Risk

A

The perceived amount of risk based on an individual’s or organization’s opinion.

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16
Q

Tangible Property

A

Property that has a physical form.

17
Q

Personnel loss exposure

A

A condition that presents the possibility of loss caused by a person’s death, disability, retirement, or resignation that deprives an organization of that person’s knowledge that cannot be readily replaced

18
Q

Speculative Risk

A

A chance or loss, no loss, or gain

19
Q

Probability

A

The likelihood that an outcome or event will occur

20
Q

Market Risk

A

Uncertainty about an investment’s future value due to changes in the market

21
Q

Hazard

A

A condition that increases the frequency or severity of a loss

22
Q

Intangible Property

A

Property that does not have a physical form

23
Q

Legal Hazard

A

A condition of the legal environment that increases loss frequency or severity

24
Q

Real Property (realty)

A

Tangible property consisting of land, all structures permanently attached to the land, and whatever is growing on the land

25
Q

Credit Risk

A

The risk that customers or other creditors will fail to make promised payments as they come due

26
Q

Systemic Risk

A

The potential for a major disruption in the function of an entire market or financial system

27
Q

Diversifiable Risk

A

A risk that affects only some individuals, businesses, or small groups

28
Q

Morale Hazard (attitudinal hazard)

A

A condition of carelessness or indifference that increases the frequency or severity of a loss

29
Q

Moral Hazard

A

A condition that increases the likelihood that a person will intentionally cause or exaggerate a loss