When purchasing insurance, the first step is to

The correct answer is identifying potential risks, which is the critical first step in the insurance purchasing process. This step involves recognizing and assessing the various risks that could impact an individual or organization's assets, health, or overall financial stability. By identifying these risks, a person or business can better understand what types of insurance are necessary to undertake effective risk management.

Understanding potential risks lays the groundwork for subsequent steps, which include evaluating those risks, selecting appropriate management methods, and implementing a risk management program. Each of these steps relies on having a clear understanding of the risks at hand to tailor insurance coverage effectively. Identifying risks helps in determining exposure levels and conditions specific to the environment or situation, guiding informed decisions about the types of insurance products that should be considered. Properly identifying these risks is essential to ensure that all critical areas are covered and that the insurance purchased provides adequate protection.