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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) Process of identifying, assessing, and prioritizing risks.
D) Buying insurance policies.
  • 2. What is insurance?
A) A bank loan for emergencies.
B) A government program for free healthcare.
C) A warranty for all purchases.
D) A contract that transfers the risk of financial loss from an individual or business to an insurance company.
  • 3. What is a deductible in insurance?
A) The premium paid for the insurance policy.
B) The total coverage amount in case of a claim.
C) The percentage of claim covered by the insurance company.
D) The amount of money the policyholder is responsible for paying before the insurance company begins to cover costs.
  • 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) Repair costs for your own car.
B) Legal responsibility for bodily injury or property damage to others.
C) Identity theft protection.
D) Medical expenses for you and your family.
  • 6. In risk management, what is mitigation?
A) Ignoring the risk.
B) Taking actions to reduce the probability or impact of a risk.
C) Transferring all risks to the insurance company.
D) Increasing the risk for higher profits.
  • 7. Which risk management technique involves avoiding the risk altogether?
A) Risk avoidance.
B) Risk retention.
C) Risk sharing.
D) Risk transfer.
  • 8. How is risk typically measured in insurance?
A) Using intuitive feelings.
B) Based on the policyholder's occupation.
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) 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) 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) Life insurance.
B) Health insurance.
C) Liability 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 coverage limit for each claim in the insurance policy.
B) The list of covered perils in the insurance policy.
C) The amount paid by the policyholder to the insurance company for coverage.
D) The agreement between the insurance company and policyholder.
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