AINS 21 Chapter One Practice Exam Questions with Correct Answers
Question 1:
Some loss exposures are not easy to retain, avoid, or control. Which one of the following risk
management techniques is frequently used to treat such exposures?
Answer:
Transfer
Question 2:
A loss exposure is:
Answer:
Any condition that presents the possibility of a loss.
Question 3:
Another name for liability insurance is:
Answer:
Third-Party Insurance
Question 4:
Insurance is not the only risk management transfer technique. When circumstances are
appropriate, transfer can be accomplished through:
Answer:
Noninsurance transfer techniques.
Question 5:
Retention is often used in combination with insurance as a way of treating loss exposures. One
of the major downsides of individuals using retention alone is:
Answer:
The potential for financial ruin.
Question 6:
From a risk management viewpoint, insurance is used to:
Answer:
Transfer the cost of losses
, Question 7:
Liability coverage for loss exposures arising from a business organization's premises and
operations, its products, or its completed work is typically provided by:
Answer:
Commercial general liability insurance
Question 8:
When an employee is injured on the job, coverage for his or her medical care and lost wages
will be provided by the insured's:
Answer:
Workers compensation policy
Question 9:
The type of insurance that provides periodic income payments to an insured who is unable to
work because of sickness or injury is:
Answer:
Disability income insurance
Question 10:
Term life insurance:
Answer:
Provides protection for a specified period with no cash value
Question 11:
A policy that combines property, crime, and liability coverages into one policy is referred to as
a(n):
Answer:
Commercial package policy (CPP)
Question 12:
A homeowners' insurance policy typically includes:
Answer:
Both property and liability coverage
Question 1:
Some loss exposures are not easy to retain, avoid, or control. Which one of the following risk
management techniques is frequently used to treat such exposures?
Answer:
Transfer
Question 2:
A loss exposure is:
Answer:
Any condition that presents the possibility of a loss.
Question 3:
Another name for liability insurance is:
Answer:
Third-Party Insurance
Question 4:
Insurance is not the only risk management transfer technique. When circumstances are
appropriate, transfer can be accomplished through:
Answer:
Noninsurance transfer techniques.
Question 5:
Retention is often used in combination with insurance as a way of treating loss exposures. One
of the major downsides of individuals using retention alone is:
Answer:
The potential for financial ruin.
Question 6:
From a risk management viewpoint, insurance is used to:
Answer:
Transfer the cost of losses
, Question 7:
Liability coverage for loss exposures arising from a business organization's premises and
operations, its products, or its completed work is typically provided by:
Answer:
Commercial general liability insurance
Question 8:
When an employee is injured on the job, coverage for his or her medical care and lost wages
will be provided by the insured's:
Answer:
Workers compensation policy
Question 9:
The type of insurance that provides periodic income payments to an insured who is unable to
work because of sickness or injury is:
Answer:
Disability income insurance
Question 10:
Term life insurance:
Answer:
Provides protection for a specified period with no cash value
Question 11:
A policy that combines property, crime, and liability coverages into one policy is referred to as
a(n):
Answer:
Commercial package policy (CPP)
Question 12:
A homeowners' insurance policy typically includes:
Answer:
Both property and liability coverage
