Question

James is a college senior who is majoring in Risk Management and Insurance. He owns a high-mileage 1998 Honda Civic that has a market value of $2,800. The current replacement value of his clothes, television sets, stereo set, cell phone, and other property in a rented apartment totals $9,000. He has a waterbed in his rented apartment that has leaked in the past. An avid runner, James runs 5 miles daily in a nearby public park that has the reputation of being very dangerous because of drug dealers, numerous assaults and muggings, and drive-by shootings. For each of the following risks or loss exposures, identify an appropriate risk management technique that could have been used to deal with the exposure. Explain your answer. (3 questions)

1. Liability lawsuit against James arising out of negligent operation of his car

2. Waterbed leak that causes property damage to the apartment

3. Physical assault on James by gang members who are dealing drugs in the park where he runs

Answer 1

According to the situation given, the risk management techniques could be:

1. liability lawsuit against James arising out of negligent operation of his car : due to negligence in taking the proper care while operate car , there could be harsh outcome, and to safeguard from that James must purchase liability insurance to meet the loss in future.

2. Waterbed leak that causes property damage to the apartment : to overcome the loss of waterbed, there must be thorougly check of waterbed to overcome or reduce the possibility of leakage.Also James can seek the acceptance of waterbed in the apartment rent contract from the owner side to have less loss.

3.Physical assault on James by gang members who are dealing drugs in the park where he runs : to this problem one best saying could be remember, prevention is better than cure.

so the best solution is avoidance.He must take another route or area for walk to be safeguard from the gang members and other threat.