McGraw-Hill/Irwin 16-1 © 2006 The McGraw-Hill Companies, Inc All rights reserved Chapter 16 Risk Management, Insurance, And Crime Prevention Defining & Coping With Risk Insurance & Risk Choosing An Insurer Reducing Risk Safeguarding Against Theft Protecting Employees 16-2 Types Of Risk Pure- Unpredictable Speculative- Voluntary McGraw-Hill/Irwin 16-3 © 2006 The McGraw-Hill Companies, Inc All rights reserved Coping With Risk Avoidance Prevention/Control Transfer Lawrence Lawry/Getty Images Assumption- Self-Insurance McGraw-Hill/Irwin 16-4 © 2006 The McGraw-Hill Companies, Inc All rights reserved Determine Insurance Need What Will Happen If: I Die Fire Theft/Embezzlement Robbery Settlement Unauthorized Information Steve Cole/Getty Images McGraw-Hill/Irwin 16-5 © 2006 The McGraw-Hill Companies, Inc All rights reserved Coinsurance “…having the business buy insurance equal to a specific percentage of property value.” McGraw-Hill/Irwin 16-6 © 2006 The McGraw-Hill Companies, Inc All rights reserved Types Of Insurance Fire Business Interruption Casualty Product/Service Liability Workers’ Compensation Group Health/Life Business Owner Fidelity/Surety Bonds McGraw-Hill/Irwin PhotoDisc/Getty Images 16-7 © 2006 The McGraw-Hill Companies, Inc All rights reserved Small Business Health Care (Employee Contribution With) McGraw-Hill/Irwin 16-8 © 2006 The McGraw-Hill Companies, Inc All rights reserved Actions To Reduce Premiums Involve Employees Establish Communications Companywide Participation Safety Awards Exciting Program Be Watchful McGraw-Hill/Irwin 16-9 © 2006 The McGraw-Hill Companies, Inc All rights reserved Red Flags On Agent Selection Delayed Responses Delay Tactics Routine Answers Attempts To Delayed Refunds Minimize Damage Hand-Delivered Policy Secret Claim Or Claim More Settlement Expensive Than Replace Old Flawed Deductible Policy McGraw-Hill/Irwin 16-10 © 2006 The McGraw-Hill Companies, Inc All rights reserved Criteria For Insurer Comparison Financial Stability/Safety Specialization Tailor Policy Cost Of Protection PhotoLink/Getty Images McGraw-Hill/Irwin 16-11 © 2006 The McGraw-Hill Companies, Inc All rights reserved Insurance Renewal Agent = Minimize Premium Boost Deductible Shop Several Agents Professional Organization Special-Risk Pools Self-Insurance/Coinsurance PhotoLink/Getty Images McGraw-Hill/Irwin 16-12 © 2006 The McGraw-Hill Companies, Inc All rights reserved Agent’s Services Devote Time To Your Problems Exposure To Loss Recommend Insurance & Loss Prevention Offer Alternatives McGraw-Hill/Irwin 16-13 © 2006 The McGraw-Hill Companies, Inc All rights reserved Crime Prevention For Protection Zero-Tolerance Policy Screen Train Defuse Disputes Check Security Terminate With Care McGraw-Hill/Irwin 16-14 © 2006 The McGraw-Hill Companies, Inc All rights reserved OSHA Guidelines To Prevent Robbery Adequate Lighting Video Cameras Increase Night Staff Alarms Royalty-Free/CORBIS Bulletproof Glass McGraw-Hill/Irwin 16-15 © 2006 The McGraw-Hill Companies, Inc All rights reserved Reducing Chances Of Robbery Modify Store Layout Secure Entrances Use Dogs Control Cash Redesign Surroundings McGraw-Hill/Irwin Don Farrall/Getty Images 16-16 © 2006 The McGraw-Hill Companies, Inc All rights reserved Sources Of Inventory Theft McGraw-Hill/Irwin 16-17 © 2006 The McGraw-Hill Companies, Inc All rights reserved Amount Of Theft- 2002 In $ Billon McGraw-Hill/Irwin 16-18 © 2006 The McGraw-Hill Companies, Inc All rights reserved Preventing Theft Mirrors Cameras/Monitors Noise Activators Employee Honesty Tests Security Guards Security Audits Spot Checks Visible Surveillance Physical Inventory Checks McGraw-Hill/Irwin Ryan McVay/Getty Images 16-19 © 2006 The McGraw-Hill Companies, Inc All rights reserved White Collar Crime “…committed by managerial, professional, and technical employees.” McGraw-Hill/Irwin 16-20 © 2006 The McGraw-Hill Companies, Inc All rights reserved Types Of White Collar Crime Falsification Of Accounts Fraudulent Computer Use Bribing Officials Collusion Sale Of Proprietary Information Sabotage McGraw-Hill/Irwin 16-21 © 2006 The McGraw-Hill Companies, Inc All rights reserved Computer Crimes Intentional Destruction Of Data Fraudulent Use Getty Images McGraw-Hill/Irwin 16-22 © 2006 The McGraw-Hill Companies, Inc All rights reserved Non-Business Computer Use McGraw-Hill/Irwin 16-23 © 2006 The McGraw-Hill Companies, Inc All rights reserved Minimize White Collar Crime Track Cost Increase Budget Ban Criminals Crack Down On Tax Avoidance Restore Rights Democratize McGraw-Hill/Irwin Rein In Pay Regulate Trading Expand Disclosure End Conflicts Of Interest Fix Pensions Foster Discussion 16-24 © 2006 The McGraw-Hill Companies, Inc All rights reserved ... Compensation Group Health/Life Business Owner Fidelity/Surety Bonds McGraw-Hill/Irwin PhotoDisc/Getty Images 16-7 © 2006 The McGraw-Hill Companies, Inc All rights reserved Small Business Health Care... the business buy insurance equal to a specific percentage of property value.” McGraw-Hill/Irwin 16-6 © 2006 The McGraw-Hill Companies, Inc All rights reserved Types Of Insurance Fire Business. ..Chapter 16 Risk Management, Insurance, And Crime Prevention Defining & Coping With Risk Insurance &