This book is a basic text for students who will take only one course in risk and

insurance. Its purpose is to provide general knowledge and understanding while

giving special attention to those areas which will be most useful to the student

throughout his career. No attempt is made to include all topics nor can those

included be given exhaustive treatment. That is the province of advanced courses

and specialized texts.

Risk is viewed as an aspect of the environment which is significant for both

family and firm. While the book is not intended to be a risk management text,

it is written from that point of view. The principles and practices of risk manage-

ment are discussed at length, with major attention directed to insurance because

of its importance as an institution for risk-bearing. Insurance coverages are dis-

cussed only to the extent required to assure understanding of their nature, func-

tion, and the principles involved. Specimen policies are included in the appendixes

for easy reference when they are discussed.

Organization of this edition is similar to previous editions, although some

changes have been made to reflect recent developments as well as suggestions

by those who have used the book. For example, a chapter devoted to social

security now precedes the one on programming life and health insurance. Part

One introduces the fundamental concepts of risk and insurance and the risk man-

agement approach. Part Two deals with family risk management, placing em-

phasis on life, health, liability, automobile, and home risks. Part Three is devoted

to risk management for the firm, with special attention to liability, workers com-

pensation, property insurance, business uses of life and health insurance, and

employee benefits. Part Four is concerned with the institutional arrangements for

providing insurance, including the nature of insuring organizations, marketing and

loss payment functions. Part Five is devoted to insurance regulation.