Entrepreneurship/International Marketing Chapter 34 Vocabulary Terms by Gwen Davidson

Economic Risks

The kind of risk results from changes in overall business conditions.

Risk

The possibility of financial loss.

Shoplifting

The stealing of merchandise from a business.

Business Risk

There are three kinds: economic, natural, and human.

Performance bonds

These insure against losses that might occur when work or a contract is not finished on time or as agreed.

Insurance policy

This is a contract between a business and an insurance company to cover a certain business risk.

Insurance

This policy is a contract between a business and an insurance company to cover a certain business risk.

Human Risks

This type of risk is often caused by employees or customers.

Risk retention

When it is impossible to prevent or transfer risks, business must assume responsibility for them.

Natural Risks

Floods, tornadoes and hurricanes are examples of this type of risk.

Risk Management

Is the systematic process of managing an organization's risks to achieve objectives in a manner consistent with public interest, human safety, environmental needs, and the law.

Fidelity bonds

A type of bond that protects a business from employee dishonesty.

Workers compensation

A type of insurance paid by employers to cover employees who suffer job-related injuries and illness and to protect employers from being sued by an employee who is injured on the job.

Obsolescence

Another type of economic risk for businesses that depend on product fashion or the latest trends to market goods and services.

Warranties

One way to transfer risk is through limiting what your company will cover in writing.

Extended coverage

Optional coverage on a basic insurance policy.