Exam 23: Managing Risk

Match the term with its definition.Some terms may not be used. a.Automobile insurance b.Coinsurance clause c.Crime insurance d.Design defect e.Manufacturing defect f.Marketing defect g.Noneconomic damages h.Partially self-funded program i.Proximate cause j.Punitive damages k.Workers' compensation legislation -A defect resulting from a problem that occurs during the manufacturing process,causing the product to subsequently not be made according to specifications

Self-insurance requires designating part of a firm's insurance proceeds to provide life insurance on key employees.

Market risk is the possibility of losses associated with the assets and earnings potential of a company,including the firm's reputation.

Since the small business owner needs to rely heavily on an insurance agent for advice,risk management and insurance management are synonymous.

Securing insurance coverage for all major potential losses would involve making certain that insurance covers the full replacement value of the firm's real and personal property.

Pure risk refers to a situation where only loss or no loss can occur-there is no potential gain.

Which insurance coverage is required by law in most states?

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 -Financing loss intentionally through a firm's cash flows

Match the term with its definition.Some terms may not be used. a.All-risk approach b.Business risk c.Compensatory damages d.Disability insurance e.Economic damages f.Health maintenance organization g.Market risk h.Named-peril approach i.Peril j.Preferred provider organization k.Pure risk -Compensatory damages that relate to economic loss,such as medical expenses and loss of income

Typically,insurance premiums to cover employee lawsuits start at

For the most part,the dollar value of employment practice claims ranges from $50,000 to $150,000,with insurance premiums ranging from $12,500 to $17,500.

Identifying in an insurance policy the specific perils covered is a(n)__________ approach.

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 -The cost of replacing personal property and rebuilding real property at today's prices

A policy for small businesses that do not qualify for a BOP that combines property insurance and commercial general liability insurance is called a

Disability buyout insurance

Market risk is uncertainty associated with a situation where only loss or no loss can occur.

Match the term with its definition.Some terms may not be used. a.All-risk approach b.Business risk c.Compensatory damages d.Disability insurance e.Economic damages f.Health maintenance organization g.Market risk h.Named-peril approach i.Peril j.Preferred provider organization k.Pure risk -The uncertainty associated with a situation where only loss or no loss can occur

Match the term with its definition.Some terms may not be used. a.All-risk approach b.Business risk c.Compensatory damages d.Disability insurance e.Economic damages f.Health maintenance organization g.Market risk h.Named-peril approach i.Peril j.Preferred provider organization k.Pure risk -Stating in a property insurance policy that all direct damages are covered except those caused by perils specifically excluded

Risk is the possibility of suffering harm or pain.

Compensatory damages include ________ damages.