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