Insurance for Business (Law)(Intro)

Which of the following is NOT a type of risk discussed in the segment?

• Threat

• Hazard

• Negligence

• Peril

Which of the following is the term used to describe anything which increases the likelihood of loss through some peril?

• Threat

• Hazard

• Speculative risk

• Pure risk

If a business owner knows about defective wiring and fails to fix it, it is considered which of the following?

• Pure risk

• Speculative risk

• Threat

• Negligence

Which of the following is true of pure risks?

• They are intentional

• They are predictable

• They provide no chance of gain

• They are not insurable

Which of the following is an example of a speculative risk?

• Leaving a business unlocked

• A tornado

• Failing to clear ice from the business entrance

• Investing in stocks

Which of the following is NOT a possible consequence of inadequate insurance coverage?

• Bankruptcy

• Increased credibility

• Decreased probability of longevity of the business

• Increased legal issues

Which is the most common method of risk management?

• Risk transfer

• Risk reduction

• Risk retention

• Risk avoidance

When a risk cannot be insured or the known loss of a risk will be extremely small, which type of risk management is generally used?

• Risk transfer

• Risk reduction

• Risk retention

• Risk avoidance

Which type of risk management is used when a business takes steps to prevent a risk from occurring?

• Risk transfer

• Risk reduction

• Risk avoidance

• Risk retention

Which of the following is an example of risk avoidance?

• Paying for damages risk causes

• Running background checks on employees

• Installing security devices

• Buying insurance