Risk management and insurance

1. Risk management involves identifying, assessing, and prioritizing potential risks in order to minimize their impact on an organization. Insurance is a common tool used in risk management, transferring the financial consequences of certain risks to an insurance company in exchange for a premium. By combining risk management practices with appropriate insurance coverage, organizations can protect themselves from unforeseen events that could otherwise have a significant financial impact. Effective risk management and insurance strategies are vital for ensuring the long-term success and sustainability of businesses in today's dynamic and unpredictable environment.

What is risk management?

A) Buying insurance policies.
B) Guessing the likelihood of risks.
C) Process of identifying, assessing, and prioritizing risks.
D) Ignoring potential risks.

2. What is insurance?

A) A government program for free healthcare.
B) A contract that transfers the risk of financial loss from an individual or business to an insurance company.
C) A warranty for all purchases.
D) A bank loan for emergencies.

3. What is a deductible in insurance?

A) The total coverage amount in case of a claim.
B) The percentage of claim covered by the insurance company.
C) The premium paid for the insurance policy.
D) The amount of money the policyholder is responsible for paying before the insurance company begins to cover costs.

4. Which type of insurance covers damage to your own vehicle in an accident?

A) Collision insurance.
B) Home insurance.
C) Life insurance.
D) Health insurance.

5. What does liability insurance cover?

A) Medical expenses for you and your family.
B) Legal responsibility for bodily injury or property damage to others.
C) Repair costs for your own car.
D) Identity theft protection.

6. In risk management, what is mitigation?

A) Taking actions to reduce the probability or impact of a risk.
B) Ignoring the risk.
C) Increasing the risk for higher profits.
D) Transferring all risks to the insurance company.

7. Which risk management technique involves avoiding the risk altogether?

A) Risk avoidance.
B) Risk sharing.
C) Risk transfer.
D) Risk retention.

8. How is risk typically measured in insurance?

A) Using intuitive feelings.
B) Based on the policyholder's occupation.
C) By guessing the likelihood of events.
D) Through actuarial analysis and statistical models.

9. What is an indemnity in insurance?

A) Compensation for a loss or damage sustained.
B) Coverage for future potential losses.
C) Helpdesk support for policyholders.
D) Free insurance policies for a year.

10. What does a claims adjuster do in the insurance industry?

A) Markets insurance products.
B) Creates new insurance policies.
C) Decides on insurance premiums.
D) Investigates, evaluates, and settles insurance claims.

11. Which type of insurance covers potential legal expenses?

A) Life insurance.
B) Liability insurance.
C) Health insurance.
D) Travel insurance.

12. What is reinsurance in the insurance industry?

A) When an insurance company serves multiple countries.
B) When insurance policies are canceled.
C) When an insurance company transfers some of its own risks to another insurer.
D) A type of insurance for retired individuals.

13. What is 'premium' in insurance?

A) The coverage limit for each claim in the insurance policy.
B) The amount paid by the policyholder to the insurance company for coverage.
C) The agreement between the insurance company and policyholder.
D) The list of covered perils in the insurance policy.

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