Insurance involves the transfer of what to a third party?
a) Safety
b) Risk
c) Cost
d) Time
What does your text say?
This is what the text says
Liability insurance: Every business, large or small, needs to have general liability insurance. This type of insurance policy protects a business if its employees, products, or services cause property damage or bodily injury to a third party.
That doesn't answer the question about transferring to a third party.
Of those 4 choices, which one is directly related to this? ~~> "employees, products, or services cause property damage or bodily injury"
B) risk
Insurance involves the transfer of risk to a third party. The correct answer is (b) Risk.
To arrive at this answer, let's break down the question and the different options:
a) Safety: Insurance does provide a sense of safety and protection, but it does not involve the transfer of safety itself to a third party.
b) Risk: Insurance is specifically designed to transfer the risk of potential losses to an insurance company or a third party.
c) Cost: While insurance does involve costs, such as premiums and deductibles, it is not the primary aspect being transferred to a third party.
d) Time: Time is not transferred to a third party in the insurance process. It is not directly related to the concept of insurance.
Therefore, the correct option is (b) Risk, as insurance involves transferring the potential risks and losses associated with an event to a third party, typically an insurance company.