What is the role of insurance in risk management?
Insurance provides financial protection against potential risks, helping organizations manage the financial impact of losses.
Which of the following is a common type of insurance for businesses?
General liability insurance and property insurance are common types of coverage for businesses.
Why is it important to evaluate insurance policies regularly?
Regular evaluations ensure that the coverage remains adequate and that the business is protected from emerging risks.
What should be considered when analyzing insurance coverage for a business?
Key considerations include the types of risks covered, the policy limits, premiums, exclusions, and deductibles.
What is the difference between general liability insurance and property insurance?
General liability insurance covers third-party claims for injury or damage, while property insurance covers damage to company-owned property.
How can risk exposure impact the choice of insurance?
Risk exposure, such as the likelihood of certain events occurring, influences the level and type of insurance coverage needed.
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What is a deductible in insurance coverage?
A deductible is the amount the insured party must pay out-of-pocket before the insurance company pays for a claim.
Why is it important to read insurance policy exclusions?
Exclusions specify situations or risks that are not covered by the insurance, so understanding them is crucial to avoid surprises during claims.
How does risk analysis influence insurance coverage decisions?
Risk analysis helps determine the types of coverage required based on the identified risks, ensuring appropriate protection.