What is the difference between liability and risk?
The main difference between general liability and professional liability is in the types of risks they each cover. General liability covers physical risks, such as bodily injuries and property damage. Professional liability covers more abstract risks, such as errors and omissions in the services your business provides.
Types of Risks
Widely, risks can be classified into three types: Business Risk, Non-Business Risk, and Financial Risk.
|Basis for Comparison||Business Risk||Financial Risk|
|Connected with||Economic environment||Use of debt capital|
- strategic risk - eg a competitor coming on to the market.
- compliance and regulatory risk - eg introduction of new rules or legislation.
- financial risk - eg interest rate rise on your business loan or a non-paying customer.
- operational risk - eg the breakdown or theft of key equipment.
liability risk means a risk where an insured is liable to a third party as a result of or caused by any act, error, omission, representation or statement by the insured; Sample 1Sample 2Sample 3.
There are three basic types of liability risks: product liability, general liability and contractual liability.
For example: the risk of developing cancer from smoking cigarettes could be expressed as: "cigarette smokers are 12 times (for example) more likely to die of lung cancer than non-smokers", or.
In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environment), often focusing on negative, undesirable consequences.
Types of Risk
Broadly speaking, there are two main categories of risk: systematic and unsystematic.
Personal risks directly affect an individual and may involve the loss of earnings and assets or an increase in expenses. For example, unemployment may create financial burdens from the loss of income and employment benefits.
What is a property risk?
The term “property risk” refers to risk events that specifically impact an organization's facilities and other physical infrastructure. Risk events such as fires, adverse weather conditions, and terrorist attacks all fall into the category of property risk.
Liability risks can act as a mechanism to transmit climate-related risks and direct costs from individual market actors, with secondary impacts at portfolio (sectoral) levels and, potentially, tertiary impacts on financial systems.
- Transfer Risk through Management of Suppliers. ...
- Managing Supplies and Imported Goods. ...
- Build Safety into Design. ...
- Keep Essential Records. ...
- Enable and Review Customer Feedback. ...
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