Name :
Part 1: Multiple Choice
1. What does "risk" refer to?
A. The likelihood of loss or injury
B. A financial product used to protect against potential losses
C. A type of insurance policy
D. The total amount of claims filed
2. Which type of risk arises from natural phenomena?
A. Economic Risk
B. Market Risk
C. Natural Risk
D. Human Risk
3. What does "economic risk" mean?
A. Risks that arise from individual behavior
B. Potential for loss due to changes in the economy
C. Risks associated with natural disasters
D. A type of insurance policy
4. What is "risk management"?
A. The likelihood of loss or injury
B. The process of identifying, assessing, and prioritizing risks
C. A financial product for protecting against losses
D. The maximum payout for an insurance policy
5. What are "controllable risks"?
A. Risks that arise from natural disasters
B. Risks that can be managed and mitigated by an organization
C. Risks that cannot be controlled
D. A type of insurance policy
6. What defines "uncontrollable risks"?
A. Risks that can be influenced by an organization
B. Risks that stem from external factors beyond the organization's control
C. Risks related to employee behavior
D. A financial product for protecting against losses
7. What is "pure risk"?
A. A type of risk involving the possibility of gain
B. A type of risk that involves only the possibility of loss
C. Risks that can be controlled
D. Risks associated with investments
8. What does "speculative risk" involve?
A. Only the possibility of loss
B. The possibility of both gain and loss
C. Risks that cannot be insured
D. Risks that arise from natural events
9. What is "insurance"?
A. A document detailing company policies
B. A financial product used to protect against potential losses
C. A type of business plan
D. A list of employees in a business
10. What does "uninsurable" mean?
A. Risks that can be easily insured
B. Risks that cannot be covered by insurance
C. Risks that are low in likelihood
D. A type of business risk
Part 2: Insurance Terminology
1. What is an insurance policy?
A. A type of business plan
B. A written agreement between an insurer and the insured
C. A document detailing company policies
D. A list of employees in a business
2. What does the term "premium" refer to in insurance?
A. The amount paid to an insurance company for coverage
B. The total amount of claims filed
C. The deductible amount
D. The maximum payout for a claim
3. What is a "claim"?
A. A request for payment under an insurance policy
B. A report of a workplace incident
C. A policy renewal notice
D. A form of advertisement
4. What does "deductible" mean?
A. The total amount of insurance coverage
B. The amount the insured must pay before coverage kicks in
C. A type of premium
D. The maximum payout for a policy
5. What is general liability insurance designed to cover?
A. Loss of income due to business interruption
B. Damages related to accidents and injuries on business property
C. Professional mistakes in services
D. Product defects
6. What does product liability insurance protect against?
A. Loss from employee theft
B. Claims arising from injuries caused by products sold
C. Errors in financial reporting
D. Damage to the business property
7. Which type of insurance protects professionals against claims of negligence?
A. General liability insurance
B. Product liability insurance
C. Professional liability insurance
D. Commercial insurance
8. What is commercial insurance?
A. Insurance for personal vehicles
B. Coverage for business-related risks
C. Insurance specifically for home-based businesses
D. Life insurance for business owners
9. What is the primary purpose of liability insurance?
A. To cover employee wages
B. To protect against legal claims from injuries or damages
C. To cover the cost of inventory
D. To insure physical assets
10. What does business interruption insurance cover?
A. Costs incurred from employee turnover
B. Loss of income due to unforeseen disruptions in business operations
C. Property damage from natural disasters
D. Liability claims from customers
Part 3: Fill in the Blanks (True or False)
1. ____ Risk refers to the likelihood of loss or injury that can arise from various sources.
2. _______ Natural risks are associated with human behavior and actions.
3. ________ Economic risk is the potential for loss due to changes in the economy.
4. _____ Risk management is the process of identifying, assessing, and prioritizing risks.
5. ________Controllable risks can be influenced and managed by an organization.
6. _______Uncontrollable risks stem from internal factors within an organization.
7. ______Pure risk involves only the possibility of loss without any chance of gain.
8. _______ Speculative risk involves the possibility of both gain and loss.
9. _______Insurance is a financial product used to protect against potential losses.
10. _______Uninsurable risks are those that can be covered by insurance policies.
Part 3: Open Response
1. Why is risk management important for businesses?
(Answer in 1-2 sentences.)
2. How do uncontrollable risks differ from controllable risks?
(Answer in 1-2 sentences.)
