risk management
Question 1
S & L Equipment manufactures and sells scaffolds and ladders that are used by construction firms. The products are sold directly to the independent retailers in Bhutan. The company’s risk manager knows that the company could be sued if a scaffold or ladder is defective, and someone is injured. Because the cost of products liability insurance has increased, the risk manager is considering other techniques to treat the company’s loss exposures.
a) For each of the following risk management techniques, describe a specific action using that technique that may be helpful in dealing with the company’s products liability exposure.
1) Avoidance
2) Loss prevention
3) Loss reduction
4) Noninsurance transfers
Question 2
The Druk Corporation has 5000 sales representatives and employees in Bhutan who drive company cars. The company’s risk manager has recommended to the firms management that the company should implement a partial retention program for collision losses to company cars.
a. Explain the advantages and disadvantages of a partial retention program to the Druk Corporation.
b. Identify two risk control measures that could be used in the company’s partial retention program for collision loses.
Question 3
City Bus Corporation provides school bus transportation to private and public schools in Thimphu. City bus owns 50 buses that are garaged in three different cities within the country. The firm faces competition from two larger bus companies that operate in the same area. Public schools and private schools generally award contracts to the lowest bidder, but the level of service and overall performance are also considered.
a. Briefly describe the steps in the risk management process that should be followed by the risk manager of the city bus.
b. Identify the major loss exposures faced by city bus.
c. For each the loss exposures identified in (b), identify risk management techniques that could be used to handled the exposures with reasons.
d.
S & L Equipment manufactures and sells scaffolds and ladders that are used by construction firms. The products are sold directly to the independent retailers in Bhutan. The company’s risk manager knows that the company could be sued if a scaffold or ladder is defective, and someone is injured. Because the cost of products liability insurance has increased, the risk manager is considering other techniques to treat the company’s loss exposures.
a) For each of the following risk management techniques, describe a specific action using that technique that may be helpful in dealing with the company’s products liability exposure.
1) Avoidance
2) Loss prevention
3) Loss reduction
4) Noninsurance transfers
Question 2
The Druk Corporation has 5000 sales representatives and employees in Bhutan who drive company cars. The company’s risk manager has recommended to the firms management that the company should implement a partial retention program for collision losses to company cars.
a. Explain the advantages and disadvantages of a partial retention program to the Druk Corporation.
b. Identify two risk control measures that could be used in the company’s partial retention program for collision loses.
Question 3
City Bus Corporation provides school bus transportation to private and public schools in Thimphu. City bus owns 50 buses that are garaged in three different cities within the country. The firm faces competition from two larger bus companies that operate in the same area. Public schools and private schools generally award contracts to the lowest bidder, but the level of service and overall performance are also considered.
a. Briefly describe the steps in the risk management process that should be followed by the risk manager of the city bus.
b. Identify the major loss exposures faced by city bus.
c. For each the loss exposures identified in (b), identify risk management techniques that could be used to handled the exposures with reasons.
d.