Chris and Karen are married and own a three-bedroom home in a large Mid-western city. Their sons, Christian attends college away from home and lives in a fraternity house. Their daughter, Kelly is a senior in high school. Chris is an accountant who works for a local accounting firm. Karen is a marketing analyst and is often away from home for several days at a time. Kelly earns extra cash by babysitting on a regular basis.

The familys home contains household furniture, personal property, a computer that Chris uses to prepare business tax returns on weekends and a laptop computer that Karen uses while travelling. The Swifts also own three (3) cars, Christian drives a 2004 Ford; Chris drives a 2009 Pontiac for both business and personal use; Karen drives a 2011 Toyota and a rental when she is travelling. Although the Swifts have owned their home for several years, they are considering moving because of the recent increase in violent crime in their neighbourhood.

Required:

A. Define the term risk management. (2 marks)

B. Identify the major pure risk and pure loss exposures to which Chris and Karen are exposed

with respect to each of the following;

(i) Personal loss exposures

(ii) Property loss exposures

(iii) Liability loss exposures