Morale Hazard
It can be described as one's indifference to loss or increased carelessness due to the presence of insurance.
Which of the following is an example of a commercial risk?
All businesses are at risk of being thrust into survival mode. This could be because of accidents, financial loss, reputational damage, criminal activity, lawsuits, and so on. These are all examples of commercial risk.
Which of the following is an example of non insurance risk transfer?
financial consequences are transferred to another party. Examples of non-insurance transfers include contracts, leases and hold-harmless agreements.
What kind of risk is based on person's mental condition or state of mind?
Subjective Risk. The subjective risk is defined as uncertainty- based on a person's mental condition or state of mind.
What is an objective risk?
Objective risk is the relative variation of actual loss from expected loss, while subjective risk is the uncertainty based on a person's mental condition or state of mind (Rejda and McNamara 2021).