Insurance Basics

The reason businesses purchase insurance is to

• Make a profit

• provide financial protection

• reduce taxes

• increase sales

Insurance that provides coverage for claims by others based on damages suffered as a result of business operations, employees, or products is

• Health Insurance

• Property Insurance

• Vehicle Insurance

• Liability Insurance

Premium

• a policyholder's request for payment for a loss

• the amount the policyholder must pay for insurance coverage

• the possibility of incurring a loss

• the profit made from insurance

Which of the following is not a type of economic risk

• Personal Risk

• Property Risk

• Liability Risk

• All are economic risk

Using another business to complete a risky is known as ____?______ the risk

• Assuming

• Avoiding

• Transferring

• Insuring

True or False. Every risk you face results in a loss

• True

• False

True or False. To be insurable, the same type of risk must be shared by a large number of businesses or individuals.

• True

• False

A policyholder is

• Another term for an insurance company

• The person or company buying the insurance policy

• The amount paid for insurance coverage

Insurance that provides payment to employees who are not able to work for a long time due to serious illness or injury

• Disability Insurance

• Health Insurance

• Life Insurance

• Property Insurance

Insurance that provides compensation for ongoing business expenses that occur if a business temporarily shuts down due to a covered hazard.

• Liability Insurance

• Vehicle Insurance

• Health Insurance

• Business Interruption Insurance