Exam 23: Managing Risk in the Small Business

Partially self-funded insurance programs that limit the self-insured portion of an employee's medical coverage to a specific amount is commonly referred to as an aggregate stop loss limit.

A unique, attractive feature of a BOP is that both real and personal property are valued on

A property loss that arises from an inability to carry on normal business operations as a result of a direct loss is called an indirect loss.

List the two basic ways to cope with risk in a small business and identify tools associated with each of these. Which method involves an insurance program?

Traditionally, commercial property insurance has valued all property loss at

Business interruption insurance covers

Personal property includes any property other than real property, including buildings, machinery, equipment, furniture, fixtures, stock, and vehicles.

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

List the basic principles in evaluating an insurance program.

Fortunately for the entrepreneur, many property-oriented risks are insurable.

Nothing can be done to prevent losses from natural disasters.

Damage to a building due to a tornado is a ____ loss.

Most entrepreneurs do not realize the value of which of the following types of insurance?

Which of the following is one of the three groups into which risk can be classified?

Under a coinsurance provision requiring the building insured for at least 80 percent of its value, the recovery on an insured loss of $100,000 on the building with a replacement value of $500,000 that was insured for only $300,000 would be limited to ____.

The following are elements that must be present for someone to be found guilty of a negligent act in a tort claim except

Flood damage to movable property is insurable.

Risk, as stated in the textbook, is

One of the advantages of a Business Owners Policy (BOP) is the automatic inclusion of business interruption coverage.

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