Situation: ABC Pharmaceuticals, Inc. is a mid-sized (500 employees) drug manufacturer located in Richardson, Texas. ABC has several drugs on the market that are widely used and are primarily designed for pain management. ABCs offices occupy several floors of an office building located on Hwy 75.

The formulas for ABCs medications are patented, i.e., no one else can manufacture ABCs drugs without their permission. Dr. Arek Skuza is ABCs chief chemist. He is responsible for the research and development of new drugs. ABCs labs are located on one floor of the leased space. The manufacturing equipment that actually fabricates the drugs is located on another floor.

ABC has just decided to hire a Risk Manager. You have been hired.

1. Identify two (2) Loss Exposures for ABC.
2. Indicate what sources of information you used to identify the 2 Loss Exposures identified in (1), above.
3. Which, if any, of the Risk Control Techniques discussed thus far would you recommend be employed in dealing with each of the (2) Loss Exposures, and why?
4. Which, if any, of the Risk Financing Techniques discussed thus far would you recommend be employed in dealing with each of the (2) Loss Exposures, and why?