Question

Which of the following statements are true and which are false?
(i) The possibility of loss or damage to goods or human beings is known
as risk.
(ii) Change of fashion is a personnel risk.
(iii) Losses caused by uncertain events of insured goods have to be borne
by businessmen themselves.
(iv) Some risks can be taken care of by precautions such as risk of breakdown
of machinery.
(v) Insurance is the means of shifting risks of loss to a party willing and
qualified to share the loss.
(vi) The amount paid by the insured to the insurer is known as premium.

Answer 1

Answer:

Ans(i) This is true that the possibility of loss or damage to goods or human beings is known  as risk. This is so because risk generally refers to an uncontrollable loss which may happen due to accidents.  

Ans(ii) This is false that a Change of fashion is a personnel risk because personnel risk mainly refers to those such risks which happen to employees of a business. Change of fashion wouldn't have an impact on the employees.  

Ans(iii) This is false that losses caused by uncertain events of insured goods have to be borne  by businessmen themselves. because that is exactly what insurance does. It covers all expenses for accidents happening to goods, or losses for a business. Example: Fire.