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Risk management and insurance
Contributed by: Stokes
  • 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) Ignoring potential risks.
B) Guessing the likelihood of risks.
C) Buying insurance policies.
D) Process of identifying, assessing, and prioritizing risks.
  • 2. What is insurance?
A) A bank loan for emergencies.
B) A warranty for all purchases.
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) Life insurance.
C) Home insurance.
D) Health insurance.
  • 5. What does liability insurance cover?
A) Repair costs for your own car.
B) Medical expenses for you and your family.
C) Legal responsibility for bodily injury or property damage to others.
D) Identity theft protection.
  • 6. In risk management, what is mitigation?
A) Transferring all risks to the insurance company.
B) Ignoring the risk.
C) Increasing the risk for higher profits.
D) Taking actions to reduce the probability or impact of a risk.
  • 7. Which risk management technique involves avoiding the risk altogether?
A) Risk sharing.
B) Risk avoidance.
C) Risk retention.
D) Risk transfer.
  • 8. How is risk typically measured in insurance?
A) Based on the policyholder's occupation.
B) Using intuitive feelings.
C) By guessing the likelihood of events.
D) Through actuarial analysis and statistical models.
  • 9. What is an indemnity in insurance?
A) Free insurance policies for a year.
B) Compensation for a loss or damage sustained.
C) Coverage for future potential losses.
D) Helpdesk support for policyholders.
  • 10. What does a claims adjuster do in the insurance industry?
A) Decides on insurance premiums.
B) Investigates, evaluates, and settles insurance claims.
C) Markets insurance products.
D) Creates new insurance policies.
  • 11. Which type of insurance covers potential legal expenses?
A) Liability insurance.
B) Life insurance.
C) Health insurance.
D) Travel insurance.
  • 12. What is reinsurance in the insurance industry?
A) When an insurance company transfers some of its own risks to another insurer.
B) When an insurance company serves multiple countries.
C) A type of insurance for retired individuals.
D) When insurance policies are canceled.
  • 13. What is 'premium' in insurance?
A) The agreement between the insurance company and policyholder.
B) The amount paid by the policyholder to the insurance company for coverage.
C) The coverage limit for each claim in the insurance policy.
D) The list of covered perils in the insurance policy.
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