Marketing Essentials Chapter 34

Risk avoidance

A business refuses to engage in particularly hazardous activity

Insurance policy

A contract between a business and an insurance company to cover a specific risk

Risk retention

Companies retain or assume financial responsibility for the sequence of loss

Worker's compensation insurance

Covers employees who suffer job-related injuries and illness and protects employers from lawsuits filed by am employee injured on the job

shoplifting

External theft that involves stealing merchandise from a business

Sole proprietor

Individual business owner who is usually required to have life insurance in order to borrow money

Fidelity bonds

Protect a business from employee dishonesty

Business liability insurance

Protects a business against damages for which it may be held legally liable, such as an injury to a customer or damage to a property of others

Credit insurance

Protects a business from losses on credit extended to customers

Product liability insurance

Protects against business losses resulting from personal injury or property damage caused by products manufactured or sold by a business

Performance bonds

Provide financial protection for losses that might occur whem a construction project is not finished due to the contractor's impaired financial condition

Extended coverage

Provides protection against types of loss that may not be covered under a basic property insurance policy

Life insurance

Purchased to protect the owners or managers of a business

Replacements cost coverage

Reimburses the business owner for the replacement costs of buildings and other personal property

Human risks

Risks caused by human mistakes, dishonesty, or other risks that can be controlled by humans

Natural risks

Risks that are caused by natural occurrences

Economic risks

Risks that result from changes on overall business conditions

Business risk

Situations that can lead to financial gain, loss, or failure

Risk management

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

Liability

The state of being repsonsible for something

Computer worms

Viruses that can be downloaded inadvertently by employees and can wreak havoc on internal computer networks and communication systems

POS

computer reports that mentor void transfers, cash discrepancies, sales reports, refund by employees, employees' discounts, and cash register transactions