A new hire asks whether risk management only covers insurance buying. Which response is most accurate?
Select an answer to reveal the explanation.
Short Explanation
Buying insurance is like putting a spare tire in the trunk — useful, but not the whole trip plan. Real risk work still means spotting what can go wrong, judging how bad it could be, putting controls in place, and planning how to keep going. Insurance is one tool, not the whole toolbox.
Full Explanation
Corporate risk management includes identifying exposures, evaluating likelihood and consequence, selecting and implementing controls, and supporting continuity — with insurance as one possible transfer mechanism among others. Treating the function as finished once a policy is purchased, or as only broker shopping or claim filing, understates the scope. Explaining that the discipline spans identification through continuity correctly sets expectations for the new hire.