GENERAL KNOWLEDGE

GK

MARKETING MANAGEMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Buying insurance for a business in case of theft or fire is which of the following ways to manage risk?
A
Avoid
B
Shift
C
Retain
D
Reduce
Explanation: 

Detailed explanation-1: -The purchase of insurance is also referred to as a risk transfer since the policy actually shifts the financial risk of loss, contractually, from the insured entity to the insurance company. Insurance should be the last option and used only after all other techniques have been evaluated.

Detailed explanation-2: -Insurance is another example of risk prevention that is outsourced to a third party by contract. Loss reduction accepts the risk and seeks to limit losses when a threat occurs.

Detailed explanation-3: -Risk transfer is a risk management and control strategy that involves the contractual shifting of a pure risk from one party to another. One example is the purchase of an insurance policy, by which a specified risk of loss is passed from the policyholder to the insurer.

Detailed explanation-4: -Financial and reporting risk, e.g., market, tax, credit. Compliance and governance risk, e.g., ethical, regulatory, international commerce, privacy. Operational risks, e.g., information and technology security and privacy, supply chain, labor issues, natural disasters. More items •29-Sept-2022

There is 1 question to complete.