Tag: business risks and insurance

Questions Related to business risks and insurance

State the following statement is True or False:
Insurance is one of the important ancillary services. 

organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

  1. True

  2. False

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Correct Option: A
Explanation:

A. TRUE

Life is full of uncertainties and thus the chances of occurrence of an event causing losses are quite uncertain. There are risks of death and disability for human life; fire and burglary risk for property; perils of the sea for shipment of goods, etc. These causes a great loss to the people. Insurance thus spreads this risk over a number of persons who are exposed to it and compensates the people suffering from these losses. Thus, it is an important ancillary service.

State the following statement is True or False:
At the event of loss, insurance policy holders submit a claim.

organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

  1. True

  2. False

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Correct Option: A
Explanation:

The policy issued to the policyholder is a promise of assistance at the time of the uncertain incident(s) for which the policy has been issued. Once the event occurs, policyholder lodges a claim to activate the insurer’s response. If the claim is accepted, the insurer will fulfill the promise by reimbursing the money assured. 

The abbreviation "AAR' stands for ______________.

organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

  1. Annual Average Risk

  2. Annual All Return

  3. Against All Risks

  4. Against Average Risk

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Correct Option: C
Explanation:

The abbreviation "AAR' stands for Against All Risk. AAR is related with insurance companies. AAR insurance is primarily referred to a health insurance company of Kenya which started its operations in the year of 1984.

State the following statement is True or False:
A policy which covers all types of risks is comprehensive policy.

organization of commerce and management business risks and insurance marine insurance kinds of insurance re-insurance and double insurance

  1. True

  2. False

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Correct Option: A
Explanation:

Comprehensive policy covers losses arising from various kinds of risks arising from uncertain events such as, fire, theft, burglary. It is also known as an all-in-one-policy.

State the following statement is True or False:
A policy under which all assets (fixed and current) are insured is called blanket policy of Fire Insurance.

organization of commerce and management business risks and insurance marine insurance kinds of insurance re-insurance and double insurance

  1. True

  2. False

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Correct Option: A
Explanation:

Blanket policy is issued to cover more than one property or the assets in the property. Under such a policy, the fixed and current assets of a manufacturer or a trader available in different buildings can be covered with a single policy.

Select a word, term or a phase which can substitute the statements:
An insurance policy, covering goods of different types of lying at different places.

organization of commerce and management business risks and insurance marine insurance kinds of insurance re-insurance and double insurance

  1. Comprehensive policy

  2. Floating policy

  3. Fire policy

  4. None of these

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Correct Option: B
Explanation:

An insurance policy, covering goods of different types of lying at different places is known as floating policy. Payment for insuring the goods under floating policy can change from one period to another as the value of the insured goods cannot be calculated.