CAIB 1 - CHAPTER 1-4 questions with correct answers

Provide 1 reason why persons should not rely on control of risk as a total solution in eliminating financial loss - Answer -Equipment will not work 100% of the time -certain types of losses such as wind, hail and lightning cannot be effectively controlled People can choose to deal with risk in a variety of ways identify four possible options and provide a brief explanation of each - Answer Avoid the risk - rent rather than buy Control the risk - loss control measures Retain the risk - self insurance Transfer the risk - purchase insurance Which of the four RISKS is the most practical for most people? - Answer Transfer of Risk What are the five elements required to be present in all types of contracts? - Answer Agreement, consideration, legality of object, legal capacity of parties to contract, and genuine intention Are individuals permitted to enter into a contract? - Answer Individuals can contract if they are competent to do so Are trade names permitted to enter into a contract? - Answer Trade names have no legal status and are not entitled to contract Are corporations permitted to enter into a contract? - Answ