Question

what is the primary purpose of insurance?
to prevent accidents from happening
to eliminate all risks in life
to make money for insurance companies
to protect against possible financial loss
question 4
2 pts
what type of risk involves damage from negligence?
personal risk
speculative risk
property risk
liability risk

Explanation:

1. Insurance works by pooling funds to compensate policyholders for covered financial losses from unexpected events; it does not prevent accidents, eliminate all risk, and profit for insurers is a secondary outcome, not the primary purpose.
2. Liability risk specifically arises when an individual or entity is held legally responsible for damages caused to others due to negligence, which matches the description in the question. Personal risk relates to individual harm, speculative risk has potential for gain or loss, and property risk involves damage to one's own property.

Answer:

1. To protect against possible financial loss
2. Liability risk