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Chapter 16 PM PPT - Chapter 16 Risk and Environmental...

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Chapter 16 Risk and Environmental Issues
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Learning Objectives Identify four methods of risk management Identify five types of insurance policies for the owner Identify three types of insurance policies for the property manager Summarize air quality and building systems issues Differentiate between a Phase I environmental audit and an environmental impact statement List environmental laws Describe the efforts of government agencies concerned with workers and the environment Name environmental hazards and how to deal with them
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Risk Management and Insurance Risk Manager is concerned with both the financial and humanitarian consequences of unforeseen events Risk Management Theories Identifying and Measuring the Risk Surveys/Inspections Review contractor’s insurance certificates Determine replacement costs & actual depreciated values Avoiding the Risk Determine which risks can be avoided and which can not
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Risk Management and Insurance Risk Management Theories Controlling the Risk Warn people of hazards on the premises Emergency preparedness and crisis response plans should be updated Loss control/prevention can contribute to direct savings on insurance premiums Well managed risk is more desirable Retaining the Risk Reasonably expected losses can be paid for Increasing the deductible can lower premiums
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Risk Management and Insurance Risk Management Theories Transferring the Risk To vendors Contractually using indemnities (rarely completely transfers risk) To insurers Monitoring Decisions Manager must continually monitor areas of risk and make adjustments where needed Constant vigilance of insurance certificates
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Risk Management and Insurance Risk Management Theories Property Manager as Claim Adjuster Usually responsible for arranging preservation of the property Before disaster Property Manager should have: Easily available name of insurance company and account number for each property Know number of agent and have claims department phone number
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Types of Insurance Basic purpose is to reduce loss caused by unforeseen misfortunes Insurable Interest – can not buy insurance unless you are involved with that entity Owners’ Hazard Insurance Policies Owner should make decisions based on recommendations from their insurance broker Home must be owner occupied to qualify for homeowners policy Landlord policy offers less protection Requirements should include: Property Insurance, including fire, lightening, windstorm, vandalism and malicious mischief Flood Insurance, Loss of Income, Rental Value, Workers Compensation, Commercial auto liability and Commercial general liability
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Types of Insurance Standard Fire Insurance – policy contains four parts: Insurance Agreement – describes locations and named insureds, period of coverage, premium charged, hazards and
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