Exam 23: Managing Risk

A coinsurance provision requires that a property be insured for at least ____ percent of its value.

Self-insurance requires

The striking dock workers on the west coast refused to unload the ships carrying merchandise for retail stores.These stores suffered loss of revenue during the Christmas season,their highest earnings period of the year.This revenue reduction is ________________ that ___________ covered by insurance.

Mistakes that an employee makes in assembling a product for a customer could be a(n)

Assume that the physical property of a business is valued at $50,000.The company's commercial property policy contains a coinsurance clause with a stated percentage of 80 percent.The company insures the property for $30,000 (75 percent of the specified minimum).The company incurs a fire loss of $20,000.How much of the loss will the insurance company pay for?

Philip leases retail space in a building owned by Roger.The lease agreement contains a(n)_____________ excusing Roger from responsibility for any financial consequences of Philip's actions.

An insurance agent should provide information in designing an insurance plan;the small business owner will only need to determine the price the company can afford.

Barney places his new extension ladder on a slippery surface when he leans it against the wall.He climbs up;the ladder slips out from under him and he falls.Which type of product liability may exist in this situation?

Match the term with its definition.Some terms may not be used. a.Business interruption insurance b.Business owner's policy c.Commercial general liability insurance d.Disability insurance e.Funds transfer fraud f.Key-person life insurance g.Package policy h.Personnel risks i.Proximate cause j.Reasonable standard k.Workers' compensation insurance -Coverage that provides benefits to employees injured at work

A customer's slip and fall injury would be covered by

Small businesses are particularly vulnerable to employee fraud because of weak financial controls.

Match the term with its definition.Some terms may not be used. a.Business interruption insurance b.Business owner's policy c.Commercial general liability insurance d.Disability insurance e.Funds transfer fraud f.Key-person life insurance g.Package policy h.Personnel risks i.Proximate cause j.Reasonable standard k.Workers' compensation insurance -A business version of a homeowner's policy designed to meet the property and general liability insurance needs of some small business owners

Matchteh term with its definition.Some terms may not be used. a.Disability insurance b.Personal property c.Proximate cause d.Real property e.Risk control f.Risk financing g.Risk management h.Risk retention i.Risk transfer j.Self-insurance k.Torts -Any property other than land and anything physically attached to the land,such as buildings

Monitoring social media is a form of risk transfer.

Match the term with its definition.Some terms may not be used. a.Actual cash value b.Aggregate stop loss limit c.Direct loss d.Disability buyout insurance e.Disability insurance f.Indirect loss g.Loss avoidance h.Loss prevention i.Loss reduction j.Replacement value of property k.Specific stop loss limit -Choosing not to engage in hazardous activities

Concern about the replacement value is considered in which principle of a sound insurance program?

Matchteh term with its definition.Some terms may not be used. a.Disability insurance b.Personal property c.Proximate cause d.Real property e.Risk control f.Risk financing g.Risk management h.Risk retention i.Risk transfer j.Self-insurance k.Torts -Minimizing potential losses by preventing,avoiding,and/or reducing risk

Which action is part of the second step of a risk management program analysis?

Bob and Tom are partners in a business.Discuss the types of insurance the business should carry if something should happen to one of the partners.

Matchteh term with its definition.Some terms may not be used. a.Disability insurance b.Personal property c.Proximate cause d.Real property e.Risk control f.Risk financing g.Risk management h.Risk retention i.Risk transfer j.Self-insurance k.Torts -Wrongful acts or omissions for which an injured party can take legal action against the wrongdoer for monetary damages