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  • ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All
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* * * * * * * * * Chapter 17 Chapter 17 Risk Risk Management, Management, Insurance, and Insurance, and Crime Crime Prevention Prevention McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved .

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Page 1: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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Chapter 17Chapter 17

Risk Management, Risk Management, Insurance, and Insurance, and

Crime PreventionCrime Prevention

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Page 2: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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Risk Management, Insurance,And Crime Prevention

Defining & Coping With Defining & Coping With RiskRisk

Insurance & RiskInsurance & Risk Choosing An InsurerChoosing An Insurer Reducing RiskReducing Risk Safeguarding Against TheftSafeguarding Against Theft Protecting EmployeesProtecting Employees

17 - 2

Page 3: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 3McGraw-Hill/Irwin

Types Of RiskTypes Of RiskPure- UnpredictablePure- Unpredictable

Speculative- VoluntarySpeculative- Voluntary

Page 4: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 4

Coping With RiskCoping With Risk

AvoidanceAvoidance

Prevention/ControlPrevention/Control

TransferTransfer

Assumption- Self-InsuranceAssumption- Self-InsuranceLawrence Lawry/Getty Images

Page 5: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 5

Determine Insurance NeedDetermine Insurance Need

What Will Happen If:What Will Happen If:I DieI DieFireFireTheft/EmbezzlementTheft/EmbezzlementRobberyRobberySettlementSettlementUnauthorized InformationUnauthorized Information

Steve Cole/Getty Images

Page 6: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 6

Types Of InsuranceTypes Of Insurance FireFire Business InterruptionBusiness Interruption CasualtyCasualty Product/Service LiabilityProduct/Service Liability Workers’ CompensationWorkers’ Compensation Group Health/LifeGroup Health/Life Business OwnerBusiness Owner Fidelity/Surety BondsFidelity/Surety Bonds

PhotoDisc/Getty Images

Page 7: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 7

CoinsuranceCoinsurance

“…“…having the having the business buy business buy

insurance equal to a insurance equal to a specific percentage specific percentage of property value.”of property value.”

Page 8: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 8

Actions To Improve Safety Actions To Improve Safety and Reduce Premiumsand Reduce Premiums

Involve EmployeesInvolve EmployeesEstablish Establish

CommunicationsCommunicationsCompanywide Companywide

ParticipationParticipationSafety AwardsSafety AwardsExciting ProgramExciting ProgramBe WatchfulBe Watchful

Page 9: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 9

Small Business Health CareSmall Business Health Care(Employee Contribution With)(Employee Contribution With)

$0

$50

$100

$150

$200

$250

Self

Spouse/DomesticPartner

Spouse/DomesticPartner & Children

Page 10: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 10

Red Flags OnRed Flags OnAgent SelectionAgent Selection

Delayed Delayed ResponsesResponses

Routine AnswersRoutine Answers Delayed RefundsDelayed Refunds Hand-Delivered Hand-Delivered

PolicyPolicy Claim More Claim More

Expensive Than Expensive Than DeductibleDeductible

Delay TacticsDelay Tactics

Attempts To Attempts To

Minimize DamageMinimize Damage

Secret Claim Or Secret Claim Or

SettlementSettlement

Replace Old Replace Old

Flawed PolicyFlawed Policy

Page 11: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 11

Criteria ForCriteria ForInsurer ComparisonInsurer Comparison

Financial Stability & Financial Stability &

SafetySafety

SpecializationSpecialization

Tailor PolicyTailor Policy

Cost Of ProtectionCost Of ProtectionPhotoLink/Getty Images

Page 12: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 12

Insurance RenewalInsurance Renewal

Agent = Minimize PremiumAgent = Minimize PremiumBoost DeductibleBoost DeductibleShop Several AgentsShop Several AgentsProfessional Professional

OrganizationOrganizationSpecial-Risk PoolsSpecial-Risk PoolsSelf-Insurance/CoinsuranceSelf-Insurance/Coinsurance

PhotoLink/Getty Images

Page 13: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 13

Agent’s ServicesAgent’s Services

Devote Time To Your Devote Time To Your

ProblemsProblems

Exposure To LossExposure To Loss

Recommend Insurance Recommend Insurance

& Loss Prevention & Loss Prevention

Offer AlternativesOffer Alternatives

Page 14: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 14

CrimeCrimePrevention For ProtectionPrevention For Protection

Zero-Tolerance PolicyZero-Tolerance Policy ScreenScreen TrainTrain Defuse DisputesDefuse Disputes Check SecurityCheck Security Terminate With CareTerminate With Care

Page 15: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 15

OSHA GuidelinesOSHA GuidelinesTo Prevent RobberyTo Prevent Robbery

Adequate LightingAdequate Lighting

Video CamerasVideo Cameras

Increase Night StaffIncrease Night Staff

AlarmsAlarms

Bulletproof GlassBulletproof GlassRoyalty-Free/CORBIS

Page 16: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 16

Reducing Reducing Chances Of RobberyChances Of Robbery

Modify Store LayoutModify Store Layout

Secure EntrancesSecure Entrances

Use DogsUse Dogs

Control CashControl Cash

Redesign SurroundingsRedesign SurroundingsDon Farrall/Getty Images

Page 17: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 17

Sources OfSources OfInventory TheftInventory Theft

Vendor Fraud

6%Shoplifting

32%Employee Theft47%

Admin. Error15%

Page 18: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 18

Amount Of Theft- 2003Amount Of Theft- 2003

$15

$10

$5

$2

$0 $5 $10 $15Employee Theft

Shoplifting

Admin. ErrorVendor Fraud In $ BillonIn $ Billon

Page 19: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 19

Preventing TheftPreventing TheftMirrorsMirrorsCameras/MonitorsCameras/MonitorsNoise ActivatorsNoise ActivatorsEmployee Honesty TestsEmployee Honesty TestsSecurity GuardsSecurity GuardsSecurity AuditsSecurity AuditsSpot ChecksSpot ChecksVisible SurveillanceVisible SurveillancePhysical Inventory ChecksPhysical Inventory ChecksRyan McVay/Getty Images

Page 20: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 20

White Collar CrimeWhite Collar Crime

“…“…committed by committed by managerial, managerial,

professional, and professional, and technical technical

employees.”employees.”

Page 21: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 21

Types OfTypes OfWhite Collar CrimeWhite Collar CrimeFalsification Of AccountsFalsification Of Accounts

Fraudulent Computer UseFraudulent Computer Use

Bribing OfficialsBribing Officials

CollusionCollusion

Sale Of Proprietary Sale Of Proprietary InformationInformation

SabotageSabotage

Page 22: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 22

Computer CrimesComputer CrimesIntentional Intentional

Destruction Of DataDestruction Of Data

Fraudulent UseFraudulent Use

Getty Images

Page 23: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 23

MinimizeMinimizeWhite Collar CrimeWhite Collar Crime

Track CostTrack Cost

Increase BudgetIncrease Budget

Ban CriminalsBan Criminals

Crack Down On Crack Down On

Tax AvoidanceTax Avoidance

Restore RightsRestore Rights

DemocratizeDemocratize

Rein In PayRein In Pay

Regulate TradingRegulate Trading

Expand Expand DisclosureDisclosure

End Conflicts Of End Conflicts Of InterestInterest

Fix PensionsFix Pensions

Foster DiscussionFoster Discussion

Page 24: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 24

Document SecurityDocument Security

List of Authorized List of Authorized PersonnelPersonnel

No Permission to No Permission to Remove Sensitive Remove Sensitive Document from Document from PremisesPremises

Page 25: ****************** Chapter 17 Risk Management, Insurance, and Crime Prevention McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All

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17 - 25

Workplace SafeguardsWorkplace Safeguards

Guards Over Moving ToolsGuards Over Moving ToolsDevices to Protect Hands Devices to Protect Hands

from Machinesfrom MachinesProtective GearProtective GearWarningsWarningsMedical TreatmentMedical Treatment


Chapter 02 Professional Standards McGraw-Hill/IrwinCopyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved

Chapter 15 McGraw-Hill/IrwinCopyright © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Chapter 4 Risk Assessment McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved

Chapter © 2008The McGraw-Hill Companies, Inc. All rights reserved. Foundations of Motivation 8 McGraw-Hill/IrwinCopyright © 2008 by The McGraw-Hill Companies,

Chapter The Stock Market McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. 5

Chapter 20 Legal Liability McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved

Economic Growth 8 McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved

Elasticity 6 McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved

Chapter 12. LABOUR McGraw-Hill/IrwinCopyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 12

12 Cost Analysis McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved

11 Salesperson Compensation and Incentives McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved

Chapter 7 McGraw-Hill/IrwinCopyright © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Chapter 8 Costs McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved

Computer Hardware Chapter 3 McGraw-Hill/IrwinCopyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved

Chapter Mutual Funds McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. 4

McGraw-Hill/IrwinCopyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved

Chapter 03 Professional Ethics McGraw-Hill/IrwinCopyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved

26 McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. An Introduction to Macroeconomics

CHAPTER 11. PERFECT COMPETITION McGraw-Hill/IrwinCopyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved

Chapter 10 McGraw-Hill/IrwinCopyright © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Computer Hardware Chapter 3 McGraw-Hill/IrwinCopyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved

McGraw-Hill/Irwin © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. Chapter 8 Property Dispositions McGraw-Hill/IrwinCopyright © 2009 by The

Consumer Behavior 9 McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved

Chapter 5 McGraw-Hill/IrwinCopyright © 2010 The McGraw-Hill Companies, Inc. All rights reserved

CHAPTER 12. MONOPOLY McGraw-Hill/IrwinCopyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved

Chapter © 2008The McGraw-Hill Companies, Inc. All rights reserved. Creating Effective Organizations 17 McGraw-Hill/IrwinCopyright © 2008 by The McGraw-Hill

Chapter 4 McGraw-Hill/IrwinCopyright © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Computer Software Chapter 4 McGraw-Hill/IrwinCopyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved

34 McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Money, Banking, and Financial Institutions McGraw-Hill/IrwinCopyright

McGraw-Hill/IrwinCopyright ©2008 The McGraw-Hill Companies, Inc. All rights reserved. Fundamentals of Variance Analysis Chapter 16

Chapter 3 McGraw-Hill/IrwinCopyright © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Chapter 12 Government Imperfections McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved

Strategy, Ethics, and Social Responsibility McGraw-Hill/IrwinCopyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved

Chapter 16 McGraw-Hill/IrwinCopyright © 2010 The McGraw-Hill Companies, Inc. All rights reserved

Chapter 17 Auditors’ Reports McGraw-Hill/IrwinCopyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved