Chapter 4 Life, Health, and Loss of Income Exposures

2. Give two examples of business-related premature death exposures. (P58)

① The death of a key employee who performs services that would be especially hard to replace.

This death may cause the delay（延期）or abandonment（放弃）of some of the firm’s projects. The death of a key employee may also cause extra costs for replacement and training and might result in the loss of customers.

② The death of a person with an ownership interest（所有权权益）in the business.

This death could cause ownership to pass to undesirable（不良的）beneficiaries（受益人）who could harm the value of the ownership interests of the surviving（健在的）owners and the estate（财产）of the deceased owner（死者业主）.

Chapter 5 Risk Management Techniques: Noninsurance Methods

2. Suppose that XYZ Corporation owns 25 warehouse（仓库）. Explain how XYZ can use frequency-reduction（减少频数）and severity-reduction（降低严重程度）techniques to control fire losses with respect to（对于、关于）its warehouses. (P77)

Frequency reduction involves an attempt to reduce the probability that a loss will occur. For instance, XYZ Corporation could institute a fire safety program designed to educate warehouse employees to be on the alert for fire hazards within the warehouses.

Severity reduction involves methods of reducing the magnitude of a loss. XYZ Corporation could install fire extinguishers（灭火器）at various locations within the warehouses in an attempt to ensure that small fires are extinguished（熄灭）before they spread. Separation involves making certain that needed goods are not all stored in the same location so that all of the goods will not be destroyed in one occurrence（事件）. XYZ Corporation could make certain that needed supplies（物资）are not all stored in the same warehouse.

4. What are the general categories of costs and benefits that firms might consider in analyzing potential investments in loss control? (P78)

Some categories are (1) repair or replacement（替换）of damaged property, (2) income losses due to destruction of property, (3) extra costs to maintain operations（运营）following a loss, (4) adverse liability judgments（不良责任判断）, (5) medical costs to treat injuries, and (6) income losses due to deaths or disabilities.

Costs: Installation（安装）and maintenance（维护）expenses; Ongoing expenses（日常开支）.

19. The Great Lakes Recreational Area（北美五大湖休闲区）encompasses（包围，环绕）several waterfront activities（滨水活动）, including swimming, boating, and fishing. It has a history of numerous（许多的）injuries to its employees as well as to its patrons（老顾客）. Explain how the Heinrich domino theory（海因里希多米诺理论）can be used to analyze potential loss control measures（损失控制措施）that might be useful for Great Lakes to consider. (P77)

The Heinrich theory states that employee accidents can be viewed as a five-step process: (1) heredity（遗传）and social environment, which causes persons to behave in a particular manner（以特定的方式）; (2) personal fault, which is the failure of individuals to respond appropriately（恰当地）in a given situation; (3) an unsafe act or the existence of a physical hazard; (4) the accident; and (5) the injury that results. Great Lakes can take action in the first step by keeping records or reviewing industry averages on which type of employees seem to cause the most accidents and instituting（开始，制定）training for all employees. This training will hopefully have an effect on the second step as well. Most of the focus should be on step

three by removing or reducing unsafe conditions or acts. If there are a number of slips（滑坡）and falls, Great Lakes can put down non-slip flooring（防滑地板）in critical areas（临界区域）. If there are a number of boating accidents, drug testing（药物检测）and safe boating procedures（规程）could be implemented（执行、贯彻）. Training on the care of injured persons would follow from the last step.

Chapter 6 Insurance as a Risk Management Technique: Principles

11. Name the requisites of insurable risk（可保风险的必要条件）from the standpoint of (a) the insurer（保险公司）and (b) the insured（投保人）. (P97-101、P110.6、7)

(a) Large number of similar objects;（大量同质的保险对象）

Accidental（意外的）and unintentional（非故意的）loss;

Determinable（可决定的）and measurable（可测定的）loss;

Loss not subject to catastrophic（灾害性的）hazard.

(b) Large Loss——Sufficiently（充足地）severe（严重）so as to cause financial hardship（经济困难）; Probability of loss must not be too high.

18. It has been suggested that the following risks are uninsurable（不可予以保险的）. For each risk, indicate（指出）whether you agree or disagree and why. (P97-101)

a. Risk of punitive damages（惩罚性赔偿）awarded to punish and to deter the wrongdoer（违法者）from

repeating actions that cause a loss.

b. Risk of loss through an economic depression.（经济萧条）

c. Risk that trade secrets of a firm might be stolen, thus causing the firm the loss of potential profits there

from.

d. Risk from loss of market that is captured（被占领）by a competitor with a better product.

e. Risk that a rezoning（再分区规划）or a shift（转移、变化）of population will reduce the value of a

location owned by a firm for marketing purposes.

a. Disagree. In many cases, punitive damages stem from（起源于）an accidental occurrence（意外事件）that was unintended by the insured, and hence（因此）, should be covered by liability insurance.

b. Not insurable privately（私人地）because it is subject to（属于）catastrophic（灾难性的）loss, lack of agreement on how to measure, and unpredictability（不可预测的）. But, alleviative measures（缓和措施）by government, unemployment insurance payments（失业保险赔偿）, diversification（分散投资）of industry, and other measures have been used to combat（对抗）losses caused by economic depression. c. Probably not insurable, at least directly. Theft（盗窃）coverage（覆盖）for definable property is available, of course, but the loss by trade secret theft would be hard to define, estimate（估计）, and predict（预测）.

d. Similar comment to part c.

e. Similar comment to part c.

In parts c, d, and e, the loss would have to be handled（处理）through methods other than insurance. Loss control, risk transfer, and diversification are all possible to mitigate（减缓）or prevent the possible loss.