Question

There are several techniques available for managing risk. For each of the following risks, identify an appropriate technique or combination of techniques, that would be appropriate for dealing with risks.

a. A family head may die prematurely because of a heart attack.

b. An individual’s home may be totally destroyed in a hurricane.

c. A new car may be severely damaged in an auto accident

d. A negligent motorist may be ordered to pay a substantial liability judgment to someone who is injured in an auto accident.

e. A surgeon may be sued for medical malpractice.

Answer 1

1. A family head may die prematurely because of a heart attack - The best way to manage risk is to buy a life insurance. Also, a medical insurance can cover hospitalisation costs.

2. An individual’s home may be totally destroyed in a hurricane - The individual should buy a property insurance.

3. A new car may be severely damaged in an auto accident - Buy a Car Insurance

4. A negligent motorist may be ordered to pay a substantial liability judgment to someone who is injured in an auto accident - The injured can have an uninsured motorist insurance clause included in his automobile policy.

5. A surgeon may be sued for medical malpractice - The surgeon needs to take Professional Indemnity Insurance