Exam 23: Managing Risk in the Small Business

Doug's BOP on his fishing guide business excludes property losses due to the wakes of other fishing boats. This is an example of the ____ approach to property insurance.

Which of the following describe the cost to replace or replicate property at today's prices?

Which of the following is not defined as personal property?

A business owner's policy is unique in that

Actual cash value (ACV) refers to the purchased value of a property.

Harold's ownership of a moving van for use in his business represents which form of risk?

Because of close management, small business owners are less vulnerable to business swindles than are their large firm counterparts.

Studies have shown that almost all small business managers carry sufficient insurance protection.

Mistakes that an employee makes made in assembling a product for a customer could be a source of ____.

You Make the Call-Situation 3 H. Abbe International, owned by Herb Abbe, is a travel agency and freight forwarder located in downtown Minneapolis. When the building that housed the firm's offices suffered damage as a result of arson, the firm was forced to relocate its 2 computers and 11 employees. Moving into the offices of a client, Abbe worked from this temporary location for a month before returning to his regular offices. The disruption cost him about $70,000 in lost business and moving expenses. In addition, he had to lay off four employees.

Real property excludes anything physically attached to land, such as buildings.

Loss prevention is defined as lessening the frequency, severity, or unpredictability of losses.

What are the five steps required to implement risk management and its goal of preserving a firm's assets and earning power?

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

The negligent act is the ____ of the loss in a tort liability claim.

Which of the following is an insurance coverage that is required by law in most states?

Regarding partners in a small business, statistics reveal that the risk of disability is ____ the risk of death.

Applied to a business, risk relates to the possibility of losses associated with the firm's reputation.

In its general form, a self-insurance program

Pure risk, as stated in the textbook, is