C11 - Chapter 1 Exam | Questions & 100% CorreC11 - Chapter 1 Exam | Questions & 100% Correct Answers (Verified) | Latest Update | Grade A+ct Answers (Verified) | Latest Update | Grade A+

Which type of risk can be insured? : Pure risk - Pure risk entails a chance of loss but no chance of profit. Insurance is concerned only with pure risk. Paul opens up a new barber shop on a busy downtown street and expects to earn a big profit. What is this an example of? : Speculative risk - Speculative risk exists where there is either a chance of loss or a chance of profit. Identify an example of peril. · Explosion resulting in fire · Loose carpet on stairs · Obsolete machinery at a factory · Poorly maintained heating system : Explosion resulting in fire - The explosion is the event that caused the fire to start, which then caused the damage. 2 | P a g e Which of the following is a proximate cause of loss? · A cigarette that was tossed from an upper balcony lands on a lower balcony and causes a fire that damages the apartment unit; fire is the proximate cause. · A person trips on loose carpet on stairs and falls down the stairs; the person's footwear is the proximate cause. · A negligent property owner doesn't clear snow from sidewalks in winter, and a visitor slips and falls; the fall is the proximate cause. · The sudden malfunction of a heating system causes smoke to enter the heating ducts and spread throughout the home, causing damage; the malfunction of the heating system is the proximate cause. : The sudden malfunction of a heating system causes smoke to enter the heating ducts and spread throughout the home, causing damage; the malfunction of the heating system is the proximate cause. The proximate cause is the immediate and effective cause of the loss, which in a chain of circumstances leads naturally and directly to the loss. Which of the following is both a pre-loss and a post-loss objective of risk management? · Sustained growth · Survival · Social responsibilit