Question

Risk management is defined as?

1) Eliminating any possibility of a diving accident.
2) Preventing problems while at the same time having a planned response for any emergency.
3) Having the right kind of insurance.
4) Both the first and third answers are correct.

Answer 1

Risk management involves preventing problems and having an emergency response plan ready, not solely relying on insurance or eliminating all risks.

Step-by-step explanation:

Risk management is defined as preventing problems while at the same time having a planned response for any emergency. This approach acknowledges that while risks cannot always be entirely eliminated, they can be understood and mitigated. A key part of risk management is the use of insurance, which is a method that households and firms utilize to prevent a significant detrimental financial effect from any single event. Insurance involves making regular payments, called premiums, to an insurance entity. This entity compensates members who suffer financial losses from events covered by the policy. Consequently, the correct answer to this question is that risk management involves preventing problems and having an emergency response plan ready, aligning with option 2.