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Risk management and Insurance_Session 1 Assignment

Risk management and Insurance_Session 1 Assignment

Q (a) Physical damage to the 2003 Ford because of a collision with another terrorist(b) Liability lawsuit against Michael arising out of the negligent operation of his car (c) Total loss of clothes, television, stereo, and personal property because of a grease fire in the kitchen of his rented apartment (d) Disappearance of one contact lens(e) Waterbed leak that causes property damage to the apartment(f) Physical assault on Michael by gang members who are dealing drugs in the park where he runs (g) Loss of tuition assistance from Michael’s father who is killed by a drunk driver in an auto accident (a) A new television is guaranteed by the manufacturer against defects for 90 days

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Retention of risk (active) is the kind of technique of management of risk which has to be used by Michael in this condition where the accident risk is known to Michael (Rejda, 2011). Plan is made by him to retain portion or all of the risk through buying an insurance of auto. The damages that physical damages caused can be claimed by Michael if he possesses auto insurance.