RMI 4224 QUIZ 1
Insurance - answer the equitable transfer of the risk of loss from one entity to another in
exchange for payment
Risk - answer is the chance or uncertainty of loss
Risk Management - answer is the identification, assessment, and prioritization of risks
followed by coordinated and economical application of resources to minimize, monitor,
and control the probability and or impact of the uncertainty
Loss - answer in property: it is defined as a decrease or reduction in the monetary value
of some property
in liability: refers to the amount of the claim or payment made on behalf of the insured
Exposure - answer is a something or someone subject to loss
ex a building, a person, a product
Hazard - answeris a condition within an exposure that increases the likelihood of loss or
increases the potential amount of loss that occurs
ex:why (what caused a fire)
Peril - answera cause of a loss
ex: how (the fire itself)
Avoidance - answeris one method of assuring no exposures to loss
-includes not engaging in specific activities
Retention - answeracceptance or assumption of the risk of loss, which means the loss is
paid from funds individual or organization has earmarked or is paid out of pocket
Active retention - answeris the conscious and intentional process of identifying the
potential loss and determining how it is to be paid for, should it occur
Passive Retention - answerwhich really is not a conscious form of risk handling or
ignorance
Segregation - answerinvolves designating a certain area of a building for high risk
exposures
Reduction - answeris the use of any one method or a combination of methods to reduce
loss frequency or loss severity
Insurance - answer the equitable transfer of the risk of loss from one entity to another in
exchange for payment
Risk - answer is the chance or uncertainty of loss
Risk Management - answer is the identification, assessment, and prioritization of risks
followed by coordinated and economical application of resources to minimize, monitor,
and control the probability and or impact of the uncertainty
Loss - answer in property: it is defined as a decrease or reduction in the monetary value
of some property
in liability: refers to the amount of the claim or payment made on behalf of the insured
Exposure - answer is a something or someone subject to loss
ex a building, a person, a product
Hazard - answeris a condition within an exposure that increases the likelihood of loss or
increases the potential amount of loss that occurs
ex:why (what caused a fire)
Peril - answera cause of a loss
ex: how (the fire itself)
Avoidance - answeris one method of assuring no exposures to loss
-includes not engaging in specific activities
Retention - answeracceptance or assumption of the risk of loss, which means the loss is
paid from funds individual or organization has earmarked or is paid out of pocket
Active retention - answeris the conscious and intentional process of identifying the
potential loss and determining how it is to be paid for, should it occur
Passive Retention - answerwhich really is not a conscious form of risk handling or
ignorance
Segregation - answerinvolves designating a certain area of a building for high risk
exposures
Reduction - answeris the use of any one method or a combination of methods to reduce
loss frequency or loss severity
