Which of the Following Best Describes Self-Insurance

question 12

Multiple Choice

Which of the following best describes self-insurance?

• A)Actively setting aside money to fund any losses should that occur
• B)Using precautionary savings to purchase insurance
• C)Diversifying activities to minimize risk
• D)All of the above are descriptions of self-insurance
• E)None of the above

---

Definitions:

Perfecting

In the context of security interests, it refers to the legal process of making a security interest enforceable against third parties by taking the necessary statutory steps.

Security Interest

A legal claim or lien on collateral that gives the creditor the right to take possession of the asset if the debtor defaults on their obligations.

Article 9

A provision of the Uniform Commercial Code (UCC) that governs secured transactions or agreements involving personal property as collateral.

Collateral

Assets pledged by a borrower to secure a loan or guarantee repayment, which can be seized by the lender if the borrower fails to pay.