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

2. What is insurance?

A) A bank loan for emergencies.
B) A government program for free healthcare.
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 amount of money the policyholder is responsible for paying before the insurance company begins to cover costs.
B) The premium paid for the insurance policy.
C) The total coverage amount in case of a claim.
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) Home insurance.
B) Life insurance.
C) Collision insurance.
D) Health 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) Increasing the risk for higher profits.
B) Taking actions to reduce the probability or impact of a risk.
C) Ignoring the 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 transfer.
D) Risk retention.

8. How is risk typically measured in insurance?

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

9. What is an indemnity in insurance?

A) Helpdesk support for policyholders.
B) Free insurance policies for a year.
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) Creates new insurance policies.
C) Decides on insurance premiums.
D) Markets insurance products.

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

13. What is 'premium' in insurance?

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

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