MKT 4300 CH. 17
managing risk to computers and data
1. A firewall: Firewalls are programs or pieces of equipment called routers which serve as a barrier between your PC and the Internet. 2. An antivirus program: Viruses are malicious programs designed to damage PCs. 3. Antispyware programs: Spyware are programs designed to report on your keystrokes or data, or give remote control of your PC to others.
risk associated with specific business operations
1. Events related to the property of the business 2. Events related to personnel 3. Events related to customers and others
internal control
A set of rules and procedures that work to limit the opportunity for employee theft or malfeasance.
separation of duties
A type of internal control that separates the physical control of an asset from the person accounting for that asset.
joint venture
An agreement between two or more entities to pool resources in order to complete a project
deductible
An amount of loss that will not be paid by an insurance company.
handling ada (American disabilities association) requirements
Determine if you are subject to any of the provisions of the ADA Obtain the services of experts on the ADA to evaluate the level of your compliance Work diligently to meet the requirements to which you are subject.
key employees
Employees whose experience and skills are critical to the success of a business -Loss of key employees is a particularly acute risk for small businesses
managing risk from employee violation of government regulations
Have a written policy provided to each employee Conduct training of managers and employees concerning those policies, Immediately and consistently act upon receipt of any complaint.
developing a comprehensive insurance program
Identifying risk is the first task Determine which risks are to be covered: -Vehicle liability -Worker's compensation -General liability -Various types of malpractice coverage
events related to customers
Injuries suffered while upon business property Injury or damage that is caused during the use of the business's products.
product liability
Payment for injury or damage that occurs during the use of the business's products
The cost of property insurance is determined:
Property's insurable value Amount of deductible loss Amount of co-insurance required Loss limits of the policy
insurable value
The amount of an asset for which a company will write an insurance policy.
business risk
The level of probability that the future economic state of the business will be worse than expected.
personal insurance
available to protect both you and your employees from specific risks Life, Disability, Medical coverage
credit insurance
covers abnormal losses from credit customers not paying their bills
sources of theft
employee theft shoplifting administrative error vendor fraud
independent internal audits will give you:
evaluation of business risk and risk control structure systematic analysis of your business processes and controls. Information on irregularities compliance with regulations. value of the assets of your business. operational and financial performance. Recommendations for more effective and efficient use of resources.
Business interruption insurance:
funds to pay the ordinary operating expenses of your business should it be forced to close temporarily
managing risks
Best strategy is to develop a business environment that minimizes: -Probability of the event occurring -Amount of loss that can be experienced if the event does occur You create this strategy by: -Making specific plans for, and arrangements to deal with, foreseeable events -Creating and enforcing an appropriate code of conduct for yourself and all employees -Ensuring that valuable assets are physically secure -Actively working to get rid of any physical hazards in your workplace
fidelity bonds
Bonds that repay employers for losses caused by dishonest or negligent employees also called dishonesty bonds
coverages
Contractual provisions of insurance policies that specify what risks the insurance company is assuming.
buyout insurance
Insurance that provides money to owners of a business to buy the shares of any deceased owner from that owner's heirs.
managing risk to intangible property
Intellectual property rights comprise the legal rights to use unique features of products or services that provide competitive advantage. If the holder of the intellectual property rights promptly reacts to infringement by making written objections to any and all infractions, can the legal rights be maintained.
managing risk from violations of tax regulations
Keep complete, accurate accounting records Establish a relationship with both an accountant and a lawyer who are expert in tax issues Make paying your taxes your first financial priority
tax codes
Laws and regulations that specify the requirements of taxation include franchise or corporation taxes, income taxes, employee taxes, sales and use taxes, and property taxes
risk of nonpayment
Must balance: giving credit to customers will increase your sales offering credit guarantees sooner or later some customer will not pay as promised.
medical
most highly desired form of insurance for most employees
theft insurance
normally included in insurance on physical assets
key person
protects you in the event that a key employee dies or is disabled and cannot work
life insurance
provided to employees to provide security for their families