Question

justin mark is planning to use his $900,000 purchase a brand new car and 100 shares from leopard group . he wishes to purchase policies to cover the risk. during the accident another person driving the car was also suffered with major injuries.from investication they came to know that mr.mark was responsible for the accident and he has to bear the loss happened to the other person.this type of risk is called as
1.pure risk
2.liablity risk
3.speculative risk
4.personal risk

Answer 1

The risk mentioned here is (2) Liability Risk

• Liability Risk arises when a person is exposed to a certain type of loss.
• Which can be in the form of physical injury, death, property damage or any other financial losses caused to the third party.
• In such a case, the third party has the right to sue that person causing losses and can claim compensation from him.
• Hence, in this case, Justin Mark has to compensate another person, being his liability, because Mr Mark was found to be responsible for the accident causing physical injury to another person.

Answer 2

Answer: Liability Risk

Explanation:

Personal Risk – includes threats to your life or your physical well-being. Property Risk – includes threats to your personal or business property. Liability Risk – includes threats to your financial well-being at the hands of others claiming injury or death alleging you to be at fault.