The purchase of insurance is a common form of _____ by the insured.
A) loss prevention
B) risk transfer
C) risk assumption
D) risk avoidance
E) loss control

Question

Quizplus · Accepted Answer

The purchase of insurance is a form of risk transfer, where the insured transfers the risk of a potential loss to the insurance company in exchange for paying a premium. The insured is still assuming some level of risk, but it is reduced through the insurance contract. Loss prevention, risk assumption, risk avoidance, and loss control are all different risk management techniques, but they do not directly apply to the purchase of insurance.

The Purchase of Insurance Is a Common Form of _____