RMIN 4000 UGA Brown Test 1 Ch 1-4

RMIN 4000 UGA Brown Test 1 Ch 1-4
exposures - -things of value (assets) that could be lost

- perils - -things that could happen to assets

- risk management - -a process that identifies loss exposures faced by an
organization and selects the most appropriate techniques for treating such
exposures

- risk - -a calculated possibility of a negative outcome

- frequency - -probability of a loss over a certain period of time

- severity - -total dollar amount to account for loss

- peril v hazard - -peril: cause of a loss
hazard: condition that create/increase frequency/severity of a loss

- physical hazard - -a physical condition that increases the frequency or
severity of loss

- moral hazard - -the presence of insurance changes the behavior of the
insured (sometimes involves dishonesty, but not always)

- morale (attitudinal) hazard - -carelessness or indifference to a loss
because of the existence of insurance

- legal hazard - -characteristics of the legal system or regulatory
environment that increase the frequency or severity of losses

- pure risk - -loss, no loss

- speculative risk - -loss, no loss, gain

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