Podcast
Questions and Answers
Which of the following is a benefit of insurance to individuals and organizations?
Which of the following is a benefit of insurance to individuals and organizations?
- Encouraging an insured's loss control activities (correct)
- Disabling efficient use of resources
- Reducing social burdens by depriving insureds of recovery after a loss
- Increasing cash flow uncertainty
Which of the following types of insurance policies cover personal loss exposures?
Which of the following types of insurance policies cover personal loss exposures?
- Property-casualty insurance policies (correct)
- Life and health policies
- Commercial insurance policies
- Reinsurance policies
What is a primary goal of insurance in terms of risk financing?
What is a primary goal of insurance in terms of risk financing?
- Managing cash flow uncertainty
- Reducing social burdens
- Paying for losses (correct)
- Disabling efficient use of resources
What is a common feature of commercial insurance policies?
What is a common feature of commercial insurance policies?
What is a type of private insurer that provides property and liability coverage to people and businesses?
What is a type of private insurer that provides property and liability coverage to people and businesses?
What is a primary mechanism of insurance in terms of risk management?
What is a primary mechanism of insurance in terms of risk management?
What is a potential drawback of insurance?
What is a potential drawback of insurance?
What type of insurance covers the legal liability of an insured resulting from the ownership, maintenance, or use of an automobile?
What type of insurance covers the legal liability of an insured resulting from the ownership, maintenance, or use of an automobile?
Which type of insurance provides protection for the loss of use of or damage to a vehicle listed on the policy because of a covered cause of loss?
Which type of insurance provides protection for the loss of use of or damage to a vehicle listed on the policy because of a covered cause of loss?
What type of insurance covers damage to buildings and/or their contents resulting from tire, vandalism, and other causes of loss?
What type of insurance covers damage to buildings and/or their contents resulting from tire, vandalism, and other causes of loss?
What is the primary purpose of an insurance contract?
What is the primary purpose of an insurance contract?
Which type of insurance covers ships and their cargo against losses like fire, lightning, and 'perils of the sea'?
Which type of insurance covers ships and their cargo against losses like fire, lightning, and 'perils of the sea'?
What type of insurance offers broad protection against claims alleging that the insured is legally liable for bodily injury or damage to the property of others?
What type of insurance offers broad protection against claims alleging that the insured is legally liable for bodily injury or damage to the property of others?
Which type of insurance protects the insured against theft of job-site contents, such as cash registers, computers, and inventory?
Which type of insurance protects the insured against theft of job-site contents, such as cash registers, computers, and inventory?
What type of insurance covers mobile equipment and property used away from the insured premises by commercial enterprises?
What type of insurance covers mobile equipment and property used away from the insured premises by commercial enterprises?
What type of insurance covers goods in domestic transit and property used in transportation and communication, as well as property used on job sites?
What type of insurance covers goods in domestic transit and property used in transportation and communication, as well as property used on job sites?
What is the primary purpose of life insurance?
What is the primary purpose of life insurance?
Which type of insurance provides periodic income payments to an insured who is unable to work due to sickness or injury?
Which type of insurance provides periodic income payments to an insured who is unable to work due to sickness or injury?
What type of policy combines property, crime, and liability coverages for business owners?
What type of policy combines property, crime, and liability coverages for business owners?
Which of the following is NOT a type of commercial insurance?
Which of the following is NOT a type of commercial insurance?
What is the purpose of a commercial umbrella liability policy?
What is the purpose of a commercial umbrella liability policy?
What is the main advantage of purchasing a commercial package policy (CPP) or a businessowners policy (BOP)?
What is the main advantage of purchasing a commercial package policy (CPP) or a businessowners policy (BOP)?
Which type of insurance provides coverage for nursing-home care and home healthcare?
Which type of insurance provides coverage for nursing-home care and home healthcare?
What is the typical limit range for a personal umbrella policy?
What is the typical limit range for a personal umbrella policy?
Study Notes
Insurance and Risk Management
- Insurance helps individuals and organizations achieve risk financing goals, such as paying for losses, managing cash flow uncertainty, and complying with legal requirements.
- Insurance provides several benefits, including encouraging loss control activities, enabling efficient use of resources, providing support for credit, and reducing social burdens.
Types of Insurance
- Property-casualty insurance policies cover personal loss exposures, including residences, personal vehicles, and owned watercraft.
- Life and health insurance policies protect the health, medical well-being, and lives of families and individuals.
- Commercial insurance policies often combine liability and property coverages into a single policy.
Private Insurers
- Private insurers can be classified as stock insurers, mutual insurers, reciprocal insurance exchanges, Lloyd's, surplus lines insurers, captive insurers, and reinsurance companies.
Commercial Insurance Policies
- Commercial auto insurance covers an insured's legal liability resulting from the ownership, maintenance, or use of an automobile.
- Commercial property insurance covers damage to buildings and/or their contents resulting from various causes of loss.
- Ocean marine insurance covers ships and their cargo against losses like fire, lightning, and "perils of the sea".
- Commercial inland marine insurance covers mobile equipment and property used away from the insured premises by commercial enterprises.
- Commercial crime insurance protects the insured against theft of job-site contents, money, and employer property.
- Commercial general liability (CGL) insurance offers broad protection against claims alleging that the insured is legally liable for bodily injury or damage to the property of others.
Life and Health Insurance
- The main purpose of life insurance is to replace the income-earning potential of a family's primary wage earner who died.
- Life insurance can be categorized into two main types: term life insurance and permanent life insurance.
- Health insurance can be purchased on an individual or a group basis, covering medical expenses, disability income, and long-term care.
Commercial Insurance Policies (Continued)
- Commercial insurance policies can cover various types of loss exposures, including commercial package, business owners, commercial auto, commercial property, commercial inland marine, commercial crime, and commercial general liability.
- Many business organizations purchase a commercial package policy (CPP) or a businessowners policy (BOP), which provide property, crime, and liability coverages.
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Description
Learn about the role of insurance in achieving risk financing goals, its benefits to individuals and organizations, and its impact on society. Discover how insurance can manage cash flow uncertainty, provide support for credit, and encourage loss control activities.
