Risk Management Multiple Choice Questions and Answers

61. Indemnity also means ...............according to the Collins Thesaurus

1. Guarantee, security, compensation, protection
2. Reimbursement, payment, repayment, safety
3. Safety, payment, guarantee, security
4. None of above

62. Which type of insurance protects the policyholder against loss or damage to a ship or its cargo on the high seas?

1. hazards
2. inland
3. transportation
4. marine

63. ...............is a corollary of the indemnity principle. It is ...............concept that legally differentiates insurance from gambling

1. indemnity, subrogartion
2. endorsement, binders
3. subrogation, indemnity
4. binders, endorsement

64. according to ...............principle , life insurance can be affected on the lives of third parties provided the proposer has insurable interest in the third party

1. insurable interest in own life
2. insurable interest in property insurance
3. insurable interest in others life
4. none of above

65. The doctrine of subrogation is the supplementary principle of ...............

1. insurance
2. surety
3. Bailment
4. Indemnity

66. Which statement is not true about a mutual insurance company?

1. It is a cooperative
2. It has stockholders and operates to earn a profit
3. It is owned by its policyholders
4. Surplus of income is distributed to policyholders as a reduction in premium

67. ...............insurance is the one where the loss is not due to physical damage but the result of dishonesty of employees as a result of physical damage

1. Liability
2. Pecuniary
3. Motor
4. Personal

68. Which one of the following is not a condition for an insurable loss?

1. Losses must be under the control of the insured
2. The insured hazard must be geographically widespread
3. The probability of a loss should be predictable
4. Losses must result from an intentional action by the insured person

69. The ...............principle states that the business and individual should insure potentially serious losses before relatively minor losses

1. measurable loss
2. determinable loss
3. catatrophic hazards
4. large loss

70. Life insurance and general insurance are divided on the basis of

1. nature of insurance
2. risk point of view
3. business point of view
4. none of above