Question 1

Risk is the possibility of suffering harm or pain.

Accepted Answer

A) True 
 B)False

Question 2

Matchteh term with its definition. Some terms may not be used.
-Coverage that designates part of a firm's earnings as a cushion against possible future losses

Accepted Answer

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 
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

Question 3

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

Accepted Answer

A)  What kinds of risk can be covered by insurance? 
B)  What types of coverage should be purchased? 
C)  How much coverage is adequate? 
D)  All of the above will concern employees. 
A)  What kinds of risk can be covered by insurance? 
B)  What types of coverage should be purchased? 
C)  How much coverage is adequate? 
D)  All of the above will concern employees.

Question 4

Business interruption insurance covers

Accepted Answer

A)  debts to suppliers. 
B)  shoplifting. 
C)  lost income. 
D)  defective products. 
A)  debts to suppliers. 
B)  shoplifting. 
C)  lost income. 
D)  defective products.

Question 5

Match the term with its definition. Some terms may not be used.
-Coverage that provides benefits to employees injured at work

Accepted Answer

A) Business interruption insurance 
B) Business owner's policy 
C) Commercial general liability insurance 
D) Disability insurance 
E) Indemnification clause
F)Key-person life insurance
G)Package policy
H)Personnel risks
I)Proximate cause
J)Reasonable standard
K)Workers' compensation insurance 
A) Business interruption insurance 
B) Business owner's policy 
C) Commercial general liability insurance 
D) Disability insurance 
E) Indemnification clause
F)Key-person life insurance
G)Package policy
H)Personnel risks
I)Proximate cause
J)Reasonable standard
K)Workers' compensation insurance

Question 6

Match the term with its definition. Some terms may not be used.
-A defect resulting from a problem that occurs during the manufacturing process, causing the product to subsequently not be made according to specifications

Accepted Answer

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) 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

Question 7

Mistakes that an employee makes in assembling a product for a customer could be a(n)

Accepted Answer

A)  employee liability. 
B)  operations liability. 
C)  premises liability. 
D)  product liability. 
A)  employee liability. 
B)  operations liability. 
C)  premises liability. 
D)  product liability.

Question 8

Matchteh term with its definition. Some terms may not be used.
-Land and anything physically attached to the land, such as buildings

Accepted Answer

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 
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

Question 9

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

Accepted Answer

The five steps required for a program an

Question 10

Crime insurance is most critical for a small business when

Accepted Answer

A)  the business has financial controls. 
B)  the firm is struggling. 
C)  the owner has a personal distraction. 
D)  the owner employs family members. 
A)  the business has financial controls. 
B)  the firm is struggling. 
C)  the owner has a personal distraction. 
D)  the owner employs family members.

Question 11

List the basic principles in evaluating an insurance program. How can an insurance agent assist a small business owner?

Accepted Answer

Basic principles in evaluating an insura

Question 12

A defect resulting from failure to convey to the user that hazards are associated with a product or to provide adequate instructions on safe product use is known as a(n)

Accepted Answer

A)  marketing defect. 
B)  manufacturing defect. 
C)  design defect. 
D)  engineering defect. 
A)  marketing defect. 
B)  manufacturing defect. 
C)  design defect. 
D)  engineering defect.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

A "prudent person" is also known as:

Accepted Answer

A)  a tort. 
B)  the reasonable standard. 
C)  indemnification. 
D)  a personnel risk. 
A)  a tort. 
B)  the reasonable standard. 
C)  indemnification. 
D)  a personnel risk.

Question 15

Match the term with its definition. Some terms may not be used.
-Coverage for general liability loss exposure

Accepted Answer

A) Business interruption insurance 
B) Business owner's policy 
C) Commercial general liability insurance 
D) Disability insurance 
E) Indemnification clause
F)Key-person life insurance
G)Package policy
H)Personnel risks
I)Proximate cause
J)Reasonable standard
K)Workers' compensation insurance 
A) Business interruption insurance 
B) Business owner's policy 
C) Commercial general liability insurance 
D) Disability insurance 
E) Indemnification clause
F)Key-person life insurance
G)Package policy
H)Personnel risks
I)Proximate cause
J)Reasonable standard
K)Workers' compensation insurance

Question 16

A carton of eggs broke onto the floor in the dairy section, making the floor slippery. Little Johnny slipped, fell, and hit his head on the floor, causing a cut and mild concussion. The grocery store incurs _________________ liability for his injuries.

Accepted Answer

A)  premises 
B)  operational 
C)  professional 
D)  product 
A)  premises 
B)  operational 
C)  professional 
D)  product

Question 17

Match the term with its definition. Some terms may not be used.
-Compensatory damages for such losses as pain and suffering, mental anguish, and loss of physical abilities

Accepted Answer

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) 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

Question 18

Match the term with its definition. Some terms may not be used.
-The uncertainty associated with a situation where only loss or no loss can occur

Accepted Answer

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 
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

Question 19

Dan bought a $500,000 marina two years ago and obtained $400,000 of property insurance. Recently economic improvements on the lake has raised the property's value to $550,000 (the good news). But the general store had a fire causing $100,000 worth of damage (the bad news). How much will the insurance company pay to repair the store since Dan has a coinsurance clause in the marina's policy?

Accepted Answer

Under the coinsurance clause, Dan agreed

Question 20

Match the term with its definition. Some terms may not be used.
-Stating in a property insurance policy that all direct damages are covered except those caused by perils specifically excluded

Accepted Answer

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 
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

Exam 23: A: Managing Risk in the Small Business

Risk is the possibility of suffering harm or pain.

Matchteh term with its definition. Some terms may not be used. -Coverage that designates part of a firm's earnings as a cushion against possible future losses

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

Business interruption insurance covers

Match the term with its definition. Some terms may not be used. -Coverage that provides benefits to employees injured at work

Match the term with its definition. Some terms may not be used. -A defect resulting from a problem that occurs during the manufacturing process, causing the product to subsequently not be made according to specifications

Mistakes that an employee makes in assembling a product for a customer could be a(n)

Matchteh term with its definition. Some terms may not be used. -Land and anything physically attached to the land, such as buildings

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

Crime insurance is most critical for a small business when

List the basic principles in evaluating an insurance program. How can an insurance agent assist a small business owner?

A defect resulting from failure to convey to the user that hazards are associated with a product or to provide adequate instructions on safe product use is known as a(n)

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

A "prudent person" is also known as:

Match the term with its definition. Some terms may not be used. -Coverage for general liability loss exposure

A carton of eggs broke onto the floor in the dairy section, making the floor slippery. Little Johnny slipped, fell, and hit his head on the floor, causing a cut and mild concussion. The grocery store incurs _________________ liability for his injuries.

Match the term with its definition. Some terms may not be used. -Compensatory damages for such losses as pain and suffering, mental anguish, and loss of physical abilities

Match the term with its definition. Some terms may not be used. -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. -Stating in a property insurance policy that all direct damages are covered except those caused by perils specifically excluded

The Entrepreneurial Life

Integrity and Ethics: Foundations for Success in Small Business

Starting a Small Business

Franchises and Buyouts

The Family Business

The Business Plan: Visualizing the Dream

The Marketing Plan

The Organizational Plan: Teams, Legal Structures, Alliances, and Directors

The Location Plan

Understanding a Firms Financial Statements

Forecasting Financial Requirements

A Firms Sources of Financing

Planning for the Harvest

Building Customer Relationships

Product Development and Supply Chain Management

Pricing and Credit Decisions

Promotional Planning

Global Opportunities for Small Business

Professional Management and the Small Business

Managing Human Resources

Managing Operations

Managing the Firms Assets

Managing Risk in the Small Business

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