Insurance & Risk Management Exam

What is the first step in the risk management model?

• Assess risks

• Identify hazards

• Implement controls

• Monitor results

In the Enterprise Risk Management (ERM) model, what follows evaluating risks?

• State goal

• Treat risks

• Identify risks

• Communicate results

How can risk management models be adapted to an organization’s needs?

• By ignoring certain steps

• By tailoring steps to specific goals and risks

• By using a generic template only

• By eliminating monitoring

How does risk create value?

• By increasing losses

• By managing uncertainty to protect assets

• By avoiding all risks

• By raising premiums

What is a key component of creating a risk program?

• Ignoring potential hazards

• Assessing and prioritizing risks

• Raising costs unnecessarily

• Skipping reviews

What is the purpose of risk mapping?

• To create a financial plan

• To visually identify and prioritize risks

• To calculate premiums

• To file claims

What does the "cost of risk" include?

• Only insurance premiums

• Losses, insurance costs, and risk control expenses

Which tactic is an example of risk control?

• Ignoring hazards

• Installing safety equipment

• Raising deductibles

• Avoiding insurance

What is a key element of a business continuity plan?

• Shutting down operations

• Ensuring operations resume after a disruption

• Increasing risks

• Eliminating employees

What is risk retention?

• Transferring all risks to an insurer

• Accepting some risks without insurance

• Avoiding all risks

• Raising premiums