CRM CRM Insurance and Financial Risk 1

Question 1

What is the primary purpose of commercial property insurance for a business?

Accepted Answer

To cover physical assets against loss or damage

Answer

Commercial property insurance protects a business's physical assets, including buildings and equipment, from covered perils.

Question 2

What does 'subrogation' mean in insurance?

Accepted Answer

The insurer's right to pursue a third party that caused an insurance loss

Answer

Subrogation allows an insurer who has paid a claim to pursue recovery from the responsible third party.

Question 3

Which liability coverage protects a business against claims arising from its products after they leave the premises?

Accepted Answer

Products liability

Answer

Products liability coverage protects manufacturers and sellers against claims arising from harm caused by their products.

Question 4

What is a 'deductible' in an insurance policy?

Accepted Answer

The amount the insured must pay before insurance coverage applies

Answer

A deductible is the portion of a loss that the insured must pay out-of-pocket before the insurance policy begins paying.

Question 5

Workers' compensation insurance provides coverage for:

Accepted Answer

Employee injuries or illnesses arising from employment

Answer

Workers' compensation covers medical expenses and lost wages for employees injured or made ill in the course of their employment.

CRM - Certified Risk Manager Practice Test