Exam 23: A: Managing Risk in the Small Business

Match the term with its definition. Some terms may not be used. -Coverage that reimburses a business for the loss of anticipated income following the interruption of business operations

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 consulting firm that typically does not have clients visit its business location would have minimal premises liability exposure.

Match the term with its definition. Some terms may not be used. -Identifying the specific perils covered in a property insurance policy

Property insurance that covers all direct damage to property except damage caused by perils specifically excluded is called CGL.

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

Match the term with its definition. Some terms may not be used. -Coverage designed to provide liability and physical damage protection for a vehicle

Business interruption insurance pays for lost income following the interruption of business operations.

Morton is discussing with his insurance agent the possibility that he might lose his building and equipment in the event of a fire or windstorm. Should that happen, Morton's company would not be able to earn revenues. These two people are discussing:

Match the term with its definition. Some terms may not be used. -The cost of replacing personal property and rebuilding real property at today's prices

Perry's business is not in the safest neighborhood. He is concerned about robbery and vandalism, two types of:

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

A small business customer slips on a wet floor (due to a slow water leak), falls and breaks an arm. Damages that could potentially be awarded to the customer might include:

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

Match the term with its definition. Some terms may not be used. -A business version of a homeowner's policy designed to meet the property and general liability insurance needs of some small business owners

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 managed-care network providing health insurance that is less expensive but more limiting in choices of medical providers

For the most part, the dollar value of employment practice claims ranges from $100,000 to $250,000, with insurance premiums ranging from $12,500 to $17,500.

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

Match the term with its definition. Some terms may not be used. -A contractual clause that requires one party to assume the financial consequences of another party's legal liabilities