FINN 3623 Exam 1 Terms (Nelson Driver) || All Questions & Solutions (Rated A+)

FINN 3623 Exam 1 Terms (Nelson Driver) || All Questions & Solutions (Rated A+) FINN 3623 Exam 1 Terms (Nelson Driver) || All Questions & Solutions (Rated A+) Risk - ANSWER - The uncertainty of an outcome -Can be positive or negative Pure Risk - ANSWER - The chance of having a loss or chance of not having a loss (When insurance companies write a policy, the only policy they take under consideration) Subjective Risk - ANSWER - Attitude toward risk (Also known as your level of risk tolerance) Speculative Risk - ANSWER - When there is a chance of loss, no loss, or potential gain ($ that you can put into your 401K) Peril - ANSWER - A cause of loss - When companies write an insurance policy, this protects us against certain types of loss (fire, lightning, wind, hail) Doctrine of Proximate Cause - ANSWER - States that the first insured peril in an unbroken chain of events, that leads to a loss, will often cause insurance companies to have to pay for losses caused by perils not specifically insured against (fire, lightning, wind, hail) Open Peril Policy - ANSWER - (All risk) You are covered and protected by any peril, unless it is specifically excluded Liability - ANSWER - -Anybody can sue you -A person can sue you for virtually any reason -A person can sue you at any time -A person can sue you for any amount Tort - ANSWER - A civil wrongdoing Prudent Person Principle - ANSWER - We are required to act like any reasonable or prudent person would act under the same or similar circumstance Plaintiff Must Establish - ANSWER - 1. Owed a duty or responsibility 2. Prove that there was a breached responsibility 3. Measurable financial damage was done because of the breach Strict Liability - ANSWER - You are responsible financially regardless of fault Res Ipsa Loquitur - ANSWER - "The thing speaks for itself" -Only used by the plaintiff -Never as defense