Hector had been asked to serve on the board of a major pharmaceutical firm. He reluctantly declined, citing the firm's lack of liability coverage for outside members of the board of directors. Hector's decision indicates that he:

The explanation is provided below.

Explanation:

Your question is incomplete. Here is the complete question.

Hector had been asked to serve on the board of a major pharmaceutical firm. He reluctantly declined, citing the firm's lack of liability coverage for outside members of the board of directors. Hector's decision indicates that he:

A. will self-insure against a loss from legal action taken against the pharmaceutical firm.

B. feels that the potential loss from legal action against this firm is an uninsurable risk.

C. insists that the firm follow the rule of indemnity.

D. will manage his risk by avoiding the potential loss from a liability suit directed at the board of directors.

A recent occurrence of organizations is that liability insurance are offered for external members who are not part of their board of directors. Offering liability insurance to external members who aren't their board of director members was due to losses made by directors of some companies because of legal actions taken against them.

Hector used the risk avoidance method because the pharmaceutical firm doesn't have liability coverage for outside members.