CRM PRINCIPLES OF RISK MANAGEMENT
PRACTICE EXAM 2026 QUESTIONS AND
VERIFIED ANSWERS GUARANTEED PASS
⩥ Adverse Selection. Answer: Tendency of higher-risk individuals to
seek more insurance coverage.
⩥ Avoidance. Answer: Risk control technique: eliminating an exposure
entirely.
⩥ Captive Insurer. Answer: Insurance company owned by the insured to
cover their own risks.
⩥ Deductible. Answer: Portion of loss paid by insured before insurer
pays.
⩥ Diversification. Answer: Risk control method of spreading exposures
to reduce impact.
⩥ Enterprise Risk Management (ERM). Answer: Organization-wide
process considering all risk types.
, ⩥ Exposure. Answer: Condition or situation that presents a possibility of
loss.
⩥ Frequency. Answer: How often losses occur.
⩥ Hazard. Answer: Condition that increases chance of loss (physical,
moral, morale).
⩥ Indemnity. Answer: Restoring the insured to the same financial
condition as before loss.
⩥ Loss Control. Answer: Actions to reduce frequency and/or severity of
losses.
⩥ Peril. Answer: Cause of loss (fire, theft, flood).
⩥ Retention. Answer: Assumption of risk by an organization rather than
transfer.
⩥ Risk. Answer: Uncertainty of outcome, especially the possibility of
adverse results.
⩥ Risk Appetite. Answer: The amount and type of risk an organization is
willing to accept.
PRACTICE EXAM 2026 QUESTIONS AND
VERIFIED ANSWERS GUARANTEED PASS
⩥ Adverse Selection. Answer: Tendency of higher-risk individuals to
seek more insurance coverage.
⩥ Avoidance. Answer: Risk control technique: eliminating an exposure
entirely.
⩥ Captive Insurer. Answer: Insurance company owned by the insured to
cover their own risks.
⩥ Deductible. Answer: Portion of loss paid by insured before insurer
pays.
⩥ Diversification. Answer: Risk control method of spreading exposures
to reduce impact.
⩥ Enterprise Risk Management (ERM). Answer: Organization-wide
process considering all risk types.
, ⩥ Exposure. Answer: Condition or situation that presents a possibility of
loss.
⩥ Frequency. Answer: How often losses occur.
⩥ Hazard. Answer: Condition that increases chance of loss (physical,
moral, morale).
⩥ Indemnity. Answer: Restoring the insured to the same financial
condition as before loss.
⩥ Loss Control. Answer: Actions to reduce frequency and/or severity of
losses.
⩥ Peril. Answer: Cause of loss (fire, theft, flood).
⩥ Retention. Answer: Assumption of risk by an organization rather than
transfer.
⩥ Risk. Answer: Uncertainty of outcome, especially the possibility of
adverse results.
⩥ Risk Appetite. Answer: The amount and type of risk an organization is
willing to accept.
