Canadian Accredited Insurance Broker (CAIB) One Practice Exam

Which category of risk involves potential harm to individuals?

1. Property risk

2. Personal risk

3. Liability risk

4. Financial risk

The correct answer is: Personal risk

The category of risk that involves potential harm to individuals is personal risk. Personal risk encompasses threats that can directly affect an individual’s physical well-being, including health issues, accidents, and death. It relates to the potential for loss or injury to a person's life or health, which may result from various incidents or conditions. This might include risks arising from lifestyle choices, environmental factors, or unforeseen events that could impact an individual's ability to maintain their quality of life. In contrast, property risk pertains to the potential for loss or damage to tangible assets, such as homes, vehicles, or personal belongings. Liability risk involves the risk of being held legally liable for causing harm to others or their property, which does not inherently affect the individual experiencing the risk themselves. Financial risk generally refers to the possibility of financial loss in investments or business operations, rather than direct harm to individuals. Thus, personal risk is distinctly focused on the potential negative outcomes that may impact an individual directly.