Corporations can purchase insurance as a means of reducing their risks. What are the primary limitations on the extent to which insurance can reduce the risks faced by a corporation?
Solution Preview
Insurance is generally utilized as a hedge against unforeseeable consequences, such as fire, accidents, disasters, etc. Corporations, depending upon their line of business, can invest in a number of insurance vehicles to mitigate various risks - this includes standard disaster and government-mandated insurance, such as commercial automobile liability and workers' compensation insurance, but also extends to voluntary coverage such as commercial multi-peril, ocean marine coverage (if engaged in shipping), medical malpractice (if in the health services industry), product liability insurance, professional liability insurance (including extending to ...
Solution Summary
Insurance is generally utilized as a hedge against unforeseeable consequences, such as fire, accidents, disasters, etc. Corporations, depending upon their line of business, can invest in a number of insurance vehicles to mitigate various risks. This response details many of these ways.
... now must undergo mandatory safety training on reducing injuries. ... The main way to reduce risk in this case is ... 1) go without insurance and take your risks, or 2 ...
... internal control system, it reduces liability ... a certain dollar amount, which would substantially reduce risk. ... the company will drastically reduce potential risks...
... public efforts to both reduce those risks, reduce those impacts ... the burden and incidence of risk from private individuals to public insurance systems. ...
... smoke detectors would be a way of reducing that risk... Those unknown risks cannot be reduced at all, for example ... of time; the PM cannot plan to reduce them upfront ...
... to the re-insurer with an aim of reducing the rate of ... has a goal of ensuring that the existing level of risk exposure to scenario such as losses is reduced. ...
... history, prophylactic mastectomy can significantly reduce the incidence ... is very effective at reducing the chances ... is extremely effective and reduces the risk...
... implemented in the market by reducing equity prices ... Wealth effect: lower price levels reduce wealth, which ... traders to sell even at substantially reduced prices. ...
... the risk to another party, avoiding the risk, reducing the negative ... Even in personal life, we use risk management strategies to reduce the risks due ...
... is a well-known method for reducing market risk... By decreasing its debt, a business can reduce its level ... maintain high cash flow, which in turn reduces its need ...
