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(iv) Legal liability losses - liability or legal liability is "
any legally enforceable liability". Within the context
of insurance, the obligation to pay a monetary award
for injury or damage caused by one's negligence or
statutorily prohibited action.

Individuals too has liability exposures, e.g, if a guest
slips and falls in one's home, and automobile liability
if one causes an automobile accident that injures
another person, or damages his property. Entities
have many liability exposures, viz, general liability,
automobile liability, workers 'compensation and
products liability.

Q8. Explain the Risk Management process.

Ans. The risk management process encompasses the following
steps :
(i) Identify the exposures to possible loss.

(ii) Measure the exposures, usually involving subjective
risks, or risk theory to possible loss including the
probability that they could occur and the impact the
losses could have on the financial affairs of the
person, or the entity.

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