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

2. What is insurance?

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

3. What is a deductible in insurance?

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

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

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

5. What does liability insurance cover?

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

6. In risk management, what is mitigation?

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

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

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

8. How is risk typically measured in insurance?

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

9. What is an indemnity in insurance?

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

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

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

11. Which type of insurance covers potential legal expenses?

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

12. What is reinsurance in the insurance industry?

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

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 list of covered perils in the insurance policy.
D) The agreement between the insurance company and policyholder.

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