Final answer:
To assume agreed-upon maximum levels of liability in the event of a loss or damage is known as underwriting.
Step-by-step explanation:
To assume agreed-upon maximum levels of liability in the event of a loss or damage is known as underwriting. Underwriting is the process where an insurance company assesses the risks involved and determines the terms and conditions of the insurance policy. It involves evaluating the applicant's risk profile and setting suitable premiums and coverage limits. For example, if you have a car insurance policy with a maximum liability limit of $50,000, the insurance company has underwritten that amount as the agreed-upon maximum they will pay in case of an accident or damage.