Risk Types
There are only two possibilities- loss or no loss
Pure Risk
what type of procedure is implemented to prevent physical injury to employees
Safety
agreements between two people or businesses where one provides a product, and the other pays something in return
Contractual agreements
when a business does not know that an employee is stealing, they are not going to address the issue because they are
unaware of the risk
in a ____ ______________ the owner takes all the business risks alone
sole proprietorship
Possibility of loss, no change, or gain
Speculative Risk
what type of procedure is implemented to prevent theft
Security
the promise to repair or replace a faulty product
warranty
when a business knows about a risk but doesn't evaluate it accurately they
underestimate the risk
in a ___________, the owners share the business risks together
partnership
Property Damage, employee issues, customer issues, crime, natural disasters
Hazard Risk
what is the procedure of effective employee training preventing
employee incompetence
the promise to give customers their money back if something goes wrong
guarantee
if the risk is financially small, businesses often choose to absorb it, the business feels
the risk is small
in a ___________, the owners limit their losses to what they've invested
corporation
Human error, production problems, leadership problems, labor regulations, and insufficient information management
Operational Risks
By keeping informed businesses can better adapt and anticipate _________
change
businesses can protect themselves from breaches of contract by requiring the contracted company to purchase a ______ ____
Surety bond
a business is willing to retain a risk for the potential of making a profit, they
believe there's a chance of return
shareholders are also known as ____________
stockholders
Reputation damage, competition, obsolescence, regulatory and political issues, and changing customer needs/demographics
Strategic Risks
By keeping up with the the forecast, a business can prevent hazard risks involving ________
weather
when you don't want to commit to buying something, you can decide to ____/_____
rent/lease
when a business chooses to invest company money in real estate or stocks, they have hope of making a
return
the tree basic forms of business ownership are
sole proprietorship, partnership, and corporation