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

2. What is insurance?

A) A government program for free healthcare.
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 warranty for all purchases.

3. What is a deductible in insurance?

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

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

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

5. What does liability insurance cover?

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

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

8. How is risk typically measured in insurance?

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

9. What is an indemnity in insurance?

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

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

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

11. Which type of insurance covers potential legal expenses?

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

12. What is reinsurance in the insurance industry?

A) A type of insurance for retired individuals.
B) When insurance policies are canceled.
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 amount paid by the policyholder to the insurance company for coverage.
C) The agreement between the insurance company and policyholder.
D) The coverage limit for each claim in the insurance policy.

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