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) Process of identifying, assessing, and prioritizing risks.
C) Ignoring potential risks.
D) Guessing the likelihood of risks.

2. What is insurance?

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

3. What is a deductible in insurance?

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

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

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

5. What does liability insurance cover?

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

6. In risk management, what is mitigation?

A) Ignoring the risk.
B) Taking actions to reduce the probability or impact of a 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 sharing.
B) Risk transfer.
C) Risk retention.
D) Risk avoidance.

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) Helpdesk support for policyholders.
B) Coverage for future potential losses.
C) Compensation for a loss or damage sustained.
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) Investigates, evaluates, and settles insurance claims.
D) Decides on insurance premiums.

11. Which type of insurance covers potential legal expenses?

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

12. What is reinsurance in the insurance industry?

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

13. What is 'premium' in insurance?

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

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