Exam 23: Managing Risk

Risk financing is the action of making funds available to cover losses that could not be eliminated by risk control.

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 -Coverage that designates part of a firm's earnings as a cushion against possible future losses

Specific and aggregate stop loss limits would be the best insurance plans of small businesses which have at least 80 employees.

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 provision in a property insurance policy that requires the owner to have insurance for at least 80 percent of what it would cost to rebuild the building or replace the personal property

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 -Ways of coping with risk that are designed to preserve the assets and earning power of a firm

After discussing the risk management process,list specific areas of concern for each step.

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 -Making funds available to cover losses that cannot be eliminated by risk control

Brenda expects there will be uncertainty regarding the outcome of her business decisions.The final result of those decisions will not be known until she has identified the investment opportunity,developed strategies,and __________ to her business.

A contractual clause that requires one party to assume the financial consequences of another party's legal liabilities is called a

One risk that small businesses normally cover is loss due to the disability of a partner or other key employee of the company.

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 -A comprehensive limit on annual expenses should a number of employees reach the firm's per-employee limit on self-funding for medical claims

Richard must carry workers' compensation insurance to fulfill his ________________ obligation.

The company's ability to absorb losses will determine what smaller potential losses will be insured.

Beth has started an elder care service.Employees work with persons who are not ready to leave their home but have some disability that prevents them from being fully mobile.What should Beth consider in managing the associated risk?

Review and evaluate is an important step in the risk management process because

Indemnification clauses should be reviewed by an insurance agent or broker to limit liabilities to a small business.

Commercial general liability insurance covers

Risk is

Discuss advantages and disadvantages to a company obtaining a BOP policy.

Wrongful acts or omissions for which an injured party can take legal action against the wrongdoer to seek monetary damages are called statutory liability.