CPHRM EXAM PREP - RISK FINANCING (A+ GRADED)

Risk Financing correct answers Includes risk management techniques that encompass all the ways of generating funds to pay for losses that risk control techniques do not entirely stop from happening; techniques include risk retention and risk transfer. Deals with managing financial aspects AFTER it occurs. Risk Transfer correct answers Transmission of an organization's risks to an outside party. Risk Retention correct answers Method an organization employs for financing of loss through the retention of the risk. Actuary correct answers A person who uses statistics to compute loss probabilities to establish premiums for insurance companies and self-insurance trusts. Boiler and Machinery Coverage correct answers Provides protection for explosion of boilers and other pressure vessels and accidental damage to equipment, Business Interruption Insurance Coverage correct answers Insurance coverage typically provided as a part of a property insurance policy covering the lost revenues and extra operating expenses associated with a covered loss such as fire; attempts to replace revenues lost due to covered loss Captive correct answers An insurance company established to provide coverage to a sponsoring entity as opposed to marketing and selling policies commercially to insureds. The sponsoring entity may be a parent corporation and its related subsidiaries a professional association or other group. Certificate of Insurance correct answers A standardized form - usually produced by the insurance agent or broker who arranges the coverage that officially outlines the specific type of insurance in place, the insurance carrier, policy period, policy number, etc. Claims-Made-Coverage correct answers Provides coverage for a claim that occurred after the inception or retroactive coverage date of the policy and is reported to the insurance company while the policy or any replacement policy is still in effect. Cost of Risk correct answers Value of all risks, internal and external, faced by an organization in fulfilling its mission. Deductible correct answers Amount required to be paid by the insured before the insurer will make payment for the eligible loss as stipulated under the insurance contract; typically erodes the maximum benefit provided. Direct Insurance correct answers A contractual arrangement involving the purchase of insurance by an insured from an insurer.