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Which of the following best describes 'pure risk' as taught in the CISR Elements of Risk Management course?

A risk that involves the possibility of either loss or gain

A risk that involves only the possibility of loss or no loss

A risk that has been transferred entirely to an insurer

A risk that has been retained on the balance sheet

to track

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Practice Pages

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2026 Statistics

Key Facts: CISR Risk Management Exam

100

Exam Questions

CISR Elements of Risk Management end-of-course exam

70%

Passing Score

Risk & Insurance Education Alliance

2 hours

Time Limit

End-of-course exam

$295

Course Fee

National Alliance CISR session pricing

5 of 9

Courses for CISR

National Alliance designation rule

5 steps

RM Process

Identify, Analyze, Examine, Implement, Monitor

CISR Elements of Risk Management is a 7-hour National Alliance course with a 100-question end-of-course exam requiring 70% to pass. It teaches the five-step risk management process, exposure analysis, frequency/severity matrix, treatment selection, and contractual risk transfer.

Sample CISR Risk Management Practice Questions

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1Which of the following best describes 'pure risk' as taught in the CISR Elements of Risk Management course?

A.A risk that involves the possibility of either loss or gain

B.A risk that involves only the possibility of loss or no loss

C.A risk that has been transferred entirely to an insurer

D.A risk that has been retained on the balance sheet

Explanation: Pure risk is defined as a situation involving only the possibility of loss or no loss, with no chance of gain. Insurance is generally available only for pure risks because insurers cannot price an exposure that includes the chance of profit.

2Which of the following is an example of speculative risk?

A.A homeowner exposed to fire damage

B.A driver exposed to a collision

C.An investor purchasing common stock

D.A factory exposed to a tornado

Explanation: Speculative risk involves the possibility of loss or gain, such as investing in stocks, gambling, or starting a business. Only pure risk is generally insurable; speculative risk is not.

3What is the correct order of the five steps in the risk management process?

A.Analyze, Identify, Implement, Examine alternatives, Monitor

B.Identify, Analyze, Examine alternatives, Implement, Monitor and improve

C.Identify, Implement, Analyze, Monitor, Improve

D.Examine, Identify, Implement, Analyze, Monitor

Explanation: The CISR Elements of Risk Management course teaches the five-step process: (1) Identify exposures, (2) Analyze exposures, (3) Examine alternatives (treatment options), (4) Implement the chosen technique, and (5) Monitor and improve the program.

4A hazard is best defined as:

A.The cause of a loss, such as fire or windstorm

B.A condition that increases the chance of loss

C.The financial cost paid for insurance

D.The dollar amount payable on a claim

Explanation: A hazard is a condition that creates or increases the chance of loss. The cause of loss itself is the peril (e.g., fire), not the hazard.

5An oily rag left next to a heater is BEST described as which type of hazard?

A.Moral hazard

B.Morale hazard

C.Physical hazard

D.Speculative hazard

Explanation: A physical hazard is a tangible condition that increases the chance of loss, such as faulty wiring or oily rags near a heat source. Moral hazards involve dishonesty, and morale hazards involve carelessness or indifference.

6A homeowner who deliberately sets fire to insured property to collect proceeds is illustrating which type of hazard?

A.Physical hazard

B.Morale hazard

C.Moral hazard

D.Fundamental hazard

Explanation: Moral hazard involves dishonesty, fraud, or deliberate acts intended to cause a loss for personal gain. Morale hazard, by contrast, refers to carelessness or indifference, not intentional misconduct.

7A driver who leaves the keys in a running car at a gas station because 'it is insured anyway' is exhibiting which type of hazard?

A.Physical hazard

B.Morale hazard

C.Moral hazard

D.Legal hazard

Explanation: Morale hazard is the carelessness or indifference toward loss that arises because insurance exists. The driver is not committing fraud (which would be moral hazard); they are simply being careless.

8In risk management terminology, the cause of a loss (such as fire, lightning, or theft) is called a:

A.Hazard

B.Peril

C.Exposure

D.Treatment

Explanation: A peril is the immediate cause of a loss. Examples include fire, windstorm, theft, lightning, hail, and collision. Hazards are conditions that increase the chance a peril will cause a loss.

9Which best describes the difference between 'risk' and 'uncertainty' as discussed in the CISR Elements of Risk Management course?

A.Risk and uncertainty are identical concepts

B.Risk is measurable; uncertainty is the psychological doubt about an outcome

C.Risk is always insurable; uncertainty never is

D.Risk applies only to property; uncertainty only to liability

Explanation: The course distinguishes risk (the measurable possibility of loss based on objective data) from uncertainty (the subjective state of doubt about the outcome). The risk management process aims to reduce uncertainty by quantifying and treating risk.

10The first step of the risk management process is:

A.Selecting an insurance carrier

B.Identifying loss exposures

C.Implementing the chosen technique

D.Monitoring loss results

Explanation: Identification of loss exposures is always the first step. You cannot analyze, treat, or monitor an exposure that has not been identified.

About the CISR Risk Management Exam

CISR Elements of Risk Management is one of the nine CISR courses from the National Alliance and serves as the introductory risk management primer that bridges service-level CISR work with the advanced CRM and CIC designations. The course covers the full risk management process, exposure identification, frequency-severity analysis, treatment selection, and insurance vs. non-insurance transfer.

Questions

100 scored questions

Time Limit

2 hours

Passing Score

70%

Exam Fee

$295 per course (Risk & Insurance Education Alliance)

CISR Risk Management Exam Content Outline

20%

Risk Management Process & Definitions

Pure vs. speculative risk, hazards (physical, moral, morale), perils, exposures, risk vs. uncertainty, and the five-step process: Identify, Analyze, Examine alternatives, Implement, Monitor/improve.

20%

Risk Identification & Exposure Analysis

Property, liability, net income/business interruption, personnel, and key-person exposures; identification tools (checklists, financial-statement analysis, flowcharts, contract review, on-site inspection).

15%

Risk Analysis (Frequency x Severity)

Quantifying loss data and applying the frequency-severity matrix: high-frequency/low-severity = retain or reduce; low-frequency/high-severity = transfer; high-both = avoid; low-both = retain.

25%

Risk Treatment Techniques

Avoidance (eliminate exposure), reduction/control (loss prevention before, loss reduction after), transfer (insurance + contractual), and retention (active vs. passive, deductibles, SIR, captives).

10%

Insurance vs. Non-Insurance Risk Transfer

Insurance as the non-substitutable transfer for catastrophic exposures, hold-harmless agreements (broad/intermediate/limited form), indemnification, additional insureds, waivers of subrogation, anti-indemnity statutes.

Risk Management Implementation & Monitoring

Putting the chosen treatment into action, documenting decisions, monitoring loss results, and continuously improving the program.

Producer Conduct

Ethics, fiduciary duties, COPE underwriting awareness, and E&O exposure for producers performing risk management work for clients.

How to Pass the CISR Risk Management Exam

What You Need to Know

Passing score: 70%
Exam length: 100 questions
Time limit: 2 hours
Exam fee: $295 per course

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

CISR Risk Management Study Tips from Top Performers

1Memorize the five-step risk management process in order: Identify, Analyze, Examine alternatives, Implement, Monitor/improve.

2Drill the frequency-severity matrix until you can map any scenario to avoid, transfer, reduce, or retain in seconds.

3Distinguish loss prevention (before the loss) from loss reduction (after the loss) and active vs. passive retention.

4Memorize the three hold-harmless forms (broad, intermediate, limited) and how anti-indemnity statutes restrict them in construction states.

5Practice exposure checklists across property, liability, net income, personnel, and key-person categories so identification becomes reflexive.

Frequently Asked Questions

What is the CISR Elements of Risk Management course?

It is one of the nine CISR courses from the Risk & Insurance Education Alliance and serves as the introductory risk management primer leading into the CRM and CIC programs.

How long is the CISR Risk Management exam?

The end-of-course exam is approximately 2 hours and uses multiple-choice questions; you must score at least 70% to pass.

What does the frequency-severity matrix tell me?

It pairs each exposure's frequency and severity to suggest treatment: retain/reduce for high-freq/low-sev, transfer for low-freq/high-sev, avoid for high-both, and retain for low-both.

What are the main risk treatment techniques?

Avoidance, reduction/control (loss prevention and loss reduction), transfer (insurance and non-insurance contractual), and retention (active or passive, including deductibles, SIR, and captives).

What is a hold-harmless agreement?

A non-insurance contractual transfer where one party assumes another party's liability. Common forms are broad, intermediate, and limited; many construction states limit them via anti-indemnity statutes.

Does this course count toward the CISR designation?

Yes. CISR Elements of Risk Management is one of the five courses you can pick from the nine CISR options to earn the full CISR designation within three calendar years.