6-1 Risk Assessment and Strategies
Risk Transfer
Also called risk shifting, occurs when you buy insurance to shift the risk of financial loss to an insurance company.
Risk Assessment
Is the process of identifying your risks and deciding how serious they are.
Loss
Refers to some type of physical injury, damage to property, or disappearance of property assets.
Premium
The price you pay for insurance coverage
Self-Insure
Which involves setting aside money to be used in the event of injury or loss of assets
Risk Avoidance
You stop the behavior or avoid the situation that leads to the risk
Risk Reduction
involves finding ways to lower your chance in incurring a loss.
Risk Assumption
Is a strategy in which you accept the consequences of risk.
Risk
Is the chance of injury, damage, or economic loss.
Probability
The likelihood of a risk actually resulting in a loss.