Principles of Insurance and Risk Management Quiz

Principle of restoring the insured to the same financial position as before the loss.

Process of recognizing, analyzing, and minimizing potential threats.

Covers financial losses due to property damage or loss.

Initial amount the policyholder must cover before insurance kicks in.

Fee paid by the insured to maintain coverage.

Coverage for losses related to physical property, not life.

Hazard is the condition leading to loss, peril is the actual event.

Covers costs associated with medical treatment and lost income.

Insurer assumes the right to pursue damages on behalf of the insured.

Coverage for medical expenses, not property.

Risks with only potential for loss, not gain, can be insured.

Mandates full disclosure of all relevant information by both parties.

Shifting the burden of potential losses to a third party.

When those with higher risks are more likely to purchase coverage.

Evaluating the risk level of potential policyholders.

Company bears the financial burden of potential losses.

Evaluating the likelihood and impact of potential threats.

Document listing identified risks and their characteristics.

Moving the financial burden of potential losses to another entity.

Visual tool for assessing and prioritizing risks.

Increased risk-taking behavior by insured parties due to coverage.

Insurer offloads some of its risk to another insurer.

Document outlining strategies for managing potential risks.

Avoidance seeks to eliminate, reduction seeks to mitigate.

Holistic strategy for addressing all potential organizational risks.