Spring 2018

Homework Assignment 2 (Answer Key)

25 points

Due on Thursday, Feb 8th at 5:30 PM EST on BlackBoard/SafeAssign

No hard copies will be accepted in class. All homework must be submitted on SafeAssign and time stamped by 5:30 PM EST on the due date.

Carefully follow the Instructions – Homework Guidelines and Submitting Homework to SafeAssign located in the Homework Section of BlackBoard. Hint: Read the questions carefully and be sure that you answer the questions asked. Many times students give correct information in an answer but that information is not the answer to the question.

Also, utilize proper business writing techniques in your answers, i.e. be complete but concise, use proper grammar, sentence structure, spelling and punctuation. Double spaced – please.

1. Refer to the bulk pack article in Topic 3: “ Risks Under the Big Top” . (Hint – review Chapter 2 & 3 of the text and the lecture notes regarding the Types of Loss Exposures and Elements of Loss Exposure, i. Asset Exposed to Loss, ii. Cause of Loss, iii. Financial Consequences of Loss).

a. Consider the first step in the Risk Management Process. Identify and briefly explain two examples of methods that could be used by the Risk Manager of Ringling Bros. and Barnum & Bailey Circus to identify loss exposures. (4 points)

b. Identify and explain a Property Loss Exposure faced by the circus. (4 points)

c. Identify and explain a Liability Loss Exposure faced by the circus. (4 points)

d. Identify and explain a Personnel Loss Exposure faced by the circus. (4 points)

e. Identify and explain a Net Income Loss Exposure faced by the circus. (4 points)

2. Refer to the article in our class Blackboard Homework folder on Topic 3: “GM: Ignorance Left “switch from hell” Unfixed”

a.) What very specific type of liability is this “switch from hell” (hint: class discussion on Tylenol)? Also discuss the problems at GM that increased their liability? (5 points)