Risk Management Quiz

Risk Management

• Risk is the possibility of loss or injury.
• Risk Management is the systematic process of managing risks to achieve objectives.
• Insurable Risk is risk that meets the criteria of an insurance company for coverage.
• Insurance is paid protection against loss from injury or property damage.
• Uninsurable Risk is risk that is not coverable by insurance.
• Controllable Risk is risk that can be controlled.
• Uncontrollable Risk is risk that cannot be controlled.
• Pure Risk is a threat of loss with no chance of a gain.
• Economic Risk is risk of harm that may result in financial loss.
• Human Risk is risk from mistakes, dishonesty, or other human factors.
• Natural Risk is risk of harm from natural disasters (floods, tornadoes, earthquakes, droughts).
• Premium is the price paid for insurance coverage.
• Peril is anything that may cause loss.
• Hazard is a factor that increases the likelihood of loss.
• Policy is a contract between a person and an insurance company.

Actual Cash Value

• The value of an automobile when it was new minus depreciation.

Depreciation

• The decline in value of an asset over time.

Financial Responsibility Law

• A law that requires drivers to compensate for injuries in an accident.

Compulsory Insurance Law

• A law mandating minimum car insurance.

No-Fault Insurance

• A mandatory insurance coverage where drivers can claim from their own coverage regardless of fault.

Claim

• A request for payment from an insurer.

Deductible

• The amount of damages a policyholder pays before insurance coverage is triggered.

Real Property

• Property attached to the land (houses, buildings).

Personal Property

• Movable assets (furniture, jewelry, electronics).

Renters Insurance

• Covers damage to personal belongings for renters.

Standard Fire Policy

• Covers damage from a fire.

Extended Coverage

• Additional insurance coverage (beyond basic coverage).

Homeowners Policy

• Covers damage to property and personal belongings. Includes liability coverage.

Rider

• An addition to an insurance policy that covers specific property or damages.

Replacement Value

• The full cost to repair or replace damaged property, disregarding depreciation.

Life Insurance

• Insurance paid to designated beneficiaries upon the insured's death.

Proceeds

• The face value of a life insurance policy (amount paid).

Beneficiary

• The person or entity receiving the insurance policy funds.

Cash Value Insurance

• Permanent insurance, combines savings and death benefits.

Term Insurance

• Temporary insurance coverage for a specified period.

Coinsurance

• The percentage of medical expenses a policyholder pays beyond the deductible.

Copayment

• The fee for each service use.

Pre-Existing Condition

• A health issue diagnosed before coverage is acquired.

Health Maintenance Organization (HMO)

• A health care organization that provides care at its own centers for fixed fees.

Preferred Provider Organization (PPO)

• A group of doctors and/or hospitals agreeing to provide specific medical services at pre-arranged fees.

Medicare

• A federal government health insurance program for seniors.

Medicaid

• A federal government health insurance program for low-income people and children.

Risk Management (Domain 3)

• Risk is a measurement of probability and severity of adverse effects.
• Risk assessments are methods of determining risk.
• Hazard Analysis involves categorizing risks (environmental, inherent property/material risks, people/material failures).
• Primary methods to reduce costs include prevention (loss control) and financial (cost reduction).
• Behavioral based safety programs use antecedent-behavior-consequence analysis to identify root causes of an incident and adjust subsequent actions.
• Hazard Analysis is the systematic examination of a planned or existing process/operation to identify hazards to personnel or equipment.
• USTs must be a percentage underground.
• Management Oversight and Risk Tree assesses oversight omissions and risk analysis strengths.
• Define Project Scope is used to break down project deliverables into more manageable pieces.
• Define Work Breakdown Structure divides an entire project into smaller parts to assess risk more clearly.
• PERT is Program Evaluation and Review Technique to calculate predicted time to complete projects.
• Pure risk is a chance of loss with no opportunity of gain.

Other Risk Management Terminology (Domain 3)

• Qualitative vs Quantitative: Qualitative risk assessments use descriptions, while quantitative risk assessments use numerical measurements.
• Generic vs. Specific: Generic assessments apply to broad categories, while specific assessments are tailored to a specific incident.
• Dynamic Risk Assessment: Ongoing and constantly changing risk assessments.
• Hierarchy of Controls: A ranking system for controlling incidents, starting with complete elimination (best), substitution, engineering controls, warnings, and personal protective equipment (PPE).
• Hazard Analysis Categories: Categories of potential hazards (environmental issues, inherent properties that create hazards, failures of people and materials).
• Layers of Protection Analysis (LOPA): A methodology used for evaluating risk from major accidents in processes and industries.
• Fault Tree Analysis (FTA): A deductive method to evaluate how potential events can lead to a negative outcome or undesired event.
• Failure Modes & Effects Analysis (FMEA): A bottom-up technique used to evaluate potential problems in a product/process to prevent possible failures.
• Common Cause Failure Analysis: an analysis technique used to evaluate multiple failures resulting from a single cause.
• Event Tree Analysis (ETA): An inductive technique that evaluates different outcomes related to a problem or undesired event.
• Naked Man: Primitive, unprotected system that is a visual aid for problem-solving to identify controls and address hazards.
• THERP (Technique for Human Error Rate Prediction): A 6-step technique to predict and analyze human errors.
• Change Analysis: A structured method for formally documenting and providing feedback on changes in processes.
• Sneak Circuit Analysis: A technique for determining unintended energy routes that can lead to undesirable occurrences.
• Monte Carlo Method: A mathematical simulation technique using random numbers to evaluate the probability of events or relationships in complex processes.
• Critical Incident Technique: Analysis of incident reports to gain insights into errors, risky behaviors, and unsafe conditions to identify issues within a specific population.
• SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis: Broad evaluation tool for identifying risk factors in a general business context.
• Job Safety Analysis (JSA): Analysis of work tasks and processes to assign risk factors to specific parts of a work task.

General Risk Management Concepts (Domain 3)

• Cost-Benefit Analysis: Evaluating actions/processes to determine if the benefits outweigh the costs or expenses.
• Safety Benchmarking: Measuring a company's safety program success against that of similar or better-performing organizations.
• Risk Matrix: A table/matrix tool used in risk assessment; different levels of risk are identified and categorized based on likelihood/severity.
• Tangible Costs: Directly measurable costs.
• Intangible Costs: Costs that are difficult to quantify (emotional or quality of life costs).
• Risk: Measurement of combined probability and severity of potential harms or adverse effects (to resources).
• Risk Homeostasis: Human behavior to maintain a level of risk.
• Safety and Health Benchmarking: Comparing safety & health performance to similar organizations.
• Causal Analysis: Technique focused on identifying root causes of problems rather than evaluating symptoms.

Test your knowledge of key concepts in risk management with this engaging quiz. Answer questions about liability loss exposure, personnel loss exposure, and the risk management process. Perfect for students and professionals looking to reinforce their understanding of risk principles.