.Which of the following risk management techniques is the purchase of insurance a common form of?
A) Risk retention
B) Risk transfer
C) Risk assumption
D) Risk avoidance
E) Loss control

Question

Quizplus · Accepted Answer

The purchase of insurance is a common form of risk transfer. The risk of loss is transferred from the insured to the insurer in exchange for paying premiums. The insurer assumes the financial risk of loss in the event of a covered claim. Risk retention involves accepting the risk and setting aside funds to cover potential losses. Risk assumption involves accepting the risk without setting aside funds or transferring the risk to another party. Risk avoidance involves preventing the occurrence of the risk altogether. Loss control involves taking measures to reduce the frequency or severity of losses.

Which of the Following Risk Management Techniques Is the Purchase