6. Decide which of the following statements are right and which are wrong. Give the correct variants.

1. Some systematic failures by businesses to spot the warning signs or the weakest link can add up to enormous aggregate or social costs.

2. More complex organisation of company makes easier the defining of risk.

3. The first and oldest cost of risk management lay with passing the risk on to others.

4. Risk management is an endless extra cost for large companies, because they needn’t it.

5. In large companies senior managers operate further away from the ground, thus creating an absolute need for thorough communication.

6. 15 per cent of risk management costs are attached to data procurement and reporting.

7. Risk management costs depend on the size and complexity of the issues of the firm.

8. Costs don’t play a role in determining the extent and quality of the remedial action.

7. Make up your own sentences using the words and word combinations given below.

To pass the risk on to others, to provide solutions, to minimise risk through daily practice, to create an absolute need for, to exacerbate, to keep information flowing between employees, to enhance control, to identify risks, to guard against, to invest heavily in risk management, to deliver results, to be extra cost for, to transfer risk to others, to expose the firm to added risk, to spot the warning signs, to act as a permanent sinker, to avert crises, remedial actions, to prioritise costs, remote risks, to dot the i’s and cross the t’s, to embrace new risks.

8. Imagine you are involved in an automobile accident. You suffer some miner injuries, but feel pretty good after a couple of days. Meanwhile, you meet a lawyer at a party who suggests that this is a great way to finance part of your college education. “All you have to do,” he says, “is to claim that your back hurts and you have recurring headaches. Go to the doctor and get physical therapy treatments (a back rub). I can arrange for you to get thousands of dollars from the insurance company.”

When you mention the event to a friend, she says that she has heard of many people doing that very thing. In fact, one of her best friends did something similar a year ago. In checking around, you find that such practices are not uncommon. You certainly could use some extra money for college and your friends feel that insurance companies are “ripping students off ” for outrageous car insurance bills anyhow. Why not take advantage of a bad situation? What are the ethical and social dimensions of your decision? What are the consequences of faking and not faking injuries? What will you do?

9. Match the following kinds of automobile insurance with their explanations.

Comprehensive coverage	provides limited life insurance protection from death in auto accident that is not intentional.
Auto death indemnity	provides weekly benefits in the event of total disability from an auto accident
Auto disability income	pays for medical expenses (in “no-fault” states), loss of income, death and/or disability, and a loss of services.
Bodily injury insurance	covers accidental damage or destruction of property of another person.
Collision insurance	covers bodily injury to others resulting from the ownership, maintenance, or use of a car.
Personal injury protection	pays for damage to the insured’s car as the result of collision with another car or object. The worth of the car sets a limit for the insurance.
Property damage insurance	covers losses from theft or damage from causes other than collision, including fire , glass breakage, vandalism, falling objects, hail, windstorm, flood, or collision with an animal.
Uninsured motorist insurance	covers unpaid losses because the at-fault party’s was not sufficient.
Medical payments insurance	pays the reasonable and necessary medical expenses incurred by the insured, resident family members, and guests in the insured’s car. It also covers medical expenses for injuries caused by vehicle while the insured is walking, riding in another car, or riding a bicycle.
Underinsured motorist insurance	pays the insured and any passengers for losses resulting from injury, sickness, disease, or death caused by the owner or operator of an uninsured car or a hit-and-run driver.

FINANCIAL TIMES OCTOBER 27 2004