Risk Managers Are Concerned with Policy Limits and Deductible Size

question 21

Multiple Choice

Risk managers are concerned with policy limits and deductible size contained in insurance contracts because:

• A) an increased deductible amount increases the policy's premium
• B) the policy limit and the deductible are the only determinants of whether the policy will pay the claim
• C) they determine how much of the exposure the insured retains and transfers
• D) premiums set by policy limit and deductible are not tax deductible whereas uninsured losses are deductible

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Definitions:

Dissent

The act of expressing or holding opinions that are at variance with those previously, commonly, or officially held.

Alliance System

A system of agreements and treaties between countries that provides mutual defense and support in case of a conflict, often considered a cause of World War I.

Contraband

Goods that are illegal to be imported or exported.

Doughboys

were the U.S. infantrymen during World War I, known for their role in the European theater of the war.