Certified Professional in Health Care Risk Management (CPHRM) 2025 – 400 Free Practice Questions to Pass the Exam

Risk financing is fundamentally about managing the financial consequences of loss exposures. It entails strategies that organizations employ to secure funding for the potential impacts of risks they face. Utilizing insurance to cover projected losses embodies this concept perfectly. Insurance allows organizations to transfer some of the financial risks associated with potential claims, accidents, or other adverse events to an insurance company. By purchasing insurance, the organization can manage budget constraints and prepare for unforeseen events, creating a financial safety net that mitigates the impact of risk.

The other options focus on different aspects of risk management but do not directly address the financing element. Creating a risk menu for decision-making relates to identifying and evaluating risks, which is important but does not specifically implement a financial strategy. Developing internal protocols for risk analysis is about establishing procedures for assessing risk, which is critical for informed decision-making but not about financing risks. Similarly, training staff on risk attitude adjustments helps in shaping the organizational culture towards risk, which is valuable in overall risk management but does not pertain to the financial strategy of handling risk losses.