Question 1

Compensatory damages include ________ damages.

Accepted Answer

A)  economic 
B)  breach 
C)  tort 
D)  punitive 
A)  economic 
B)  breach 
C)  tort 
D)  punitive

Question 2

Match the term with its definition. Some terms may not be used.
-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

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 3

Match the term with its definition. Some terms may not be used.
-A comprehensive limit on annual expenses should a number of employees reach the firm's per-employee limit on self-funding for medical claims

Accepted Answer

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) 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

Question 4

Match the term with its definition. Some terms may not be used.
-Choosing not to engage in hazardous activities

Accepted Answer

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) 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

Question 5

Match the term with its definition. Some terms may not be used.
-A program that designates part of a firm's earnings to fund a portion of employee medical coverage

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 6

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 7

Match the term with its definition. Some terms may not be used.
-A loss arising from an inability to carry on normal operations due to a direct loss of property

Accepted Answer

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) 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

Question 8

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 9

As a general rule, only ______ is insurable.

Accepted Answer

A)  business risk 
B)  market risk 
C)  pure risk 
D)  risk 
A)  business risk 
B)  market risk 
C)  pure risk 
D)  risk

Question 10

Risk is the possibility of suffering harm or pain.

Accepted Answer

A) True 
 B)False

Question 11

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

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 12

Bob and Tom are partners in a business. Discuss the types of insurance the business should carry if something should happen to one of the partners.

Accepted Answer

*Key person insurance. The business shou

Question 13

The striking dock workers on the west coast refused to unload the ships carrying merchandise for retail stores. These stores suffered loss of revenue during the Christmas season, their highest earnings period of the year. This revenue reduction is ________________ that ___________ covered by insurance.

Accepted Answer

A)  a direct loss, can be 
B)  indirect loss, can be 
C)  direct loss, cannot be 
D)  indirect loss, cannot be 
A)  a direct loss, can be 
B)  indirect loss, can be 
C)  direct loss, cannot be 
D)  indirect loss, cannot be

Question 14

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 15

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:

Accepted Answer

A)  risk 
B)  pure risk 
C)  business risk 
D)  market risk 
A)  risk 
B)  pure risk 
C)  business risk 
D)  market risk

Question 16

Match the term with its definition. Some terms may not be used.
-Risks that directly affect individual employees but may have an indirect impact on a business as well

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 17

Doug works security at a bar and was recently hurt by a patron who was being forcibly removed from the premises. He believes he has been wrongfully treated by the bar. What four elements must be in place for Doug to make a claim that the bistro has been negligent?

Accepted Answer

-Existence of a legal duty between the p

Question 18

Match the term with its definition. Some terms may not be used.
-A cause of loss, either through natural events or through the actions of people

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

Match the term with its definition. Some terms may not be used.
-A policy for small businesses that do not qualify for a BOP that combines property insurance, commercial general liability insurance, and crime insurance

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 20

Risk is

Accepted Answer

A)  a chance all entrepreneurs take. 
B)  a probability that adverse conditions will result. 
C)  a possibility of suffering harm or loss. 
D)  usually avoidable. 
A)  a chance all entrepreneurs take. 
B)  a probability that adverse conditions will result. 
C)  a possibility of suffering harm or loss. 
D)  usually avoidable.

Exam 23: Managing Risk in the Small Business

Compensatory damages include ________ damages.

Match the term with its definition. Some terms may not be used. -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

Match the term with its definition. Some terms may not be used. -A comprehensive limit on annual expenses should a number of employees reach the firm's per-employee limit on self-funding for medical claims

Match the term with its definition. Some terms may not be used. -Choosing not to engage in hazardous activities

Match the term with its definition. Some terms may not be used. -A program that designates part of a firm's earnings to fund a portion of employee medical coverage

Match the term with its definition. Some terms may not be used. -A loss arising from an inability to carry on normal operations due to a direct loss of property

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

As a general rule, only ______ is insurable.

Risk is the possibility of suffering harm or pain.

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

Bob and Tom are partners in a business. Discuss the types of insurance the business should carry if something should happen to one of the partners.

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.

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. -Risks that directly affect individual employees but may have an indirect impact on a business as well

Doug works security at a bar and was recently hurt by a patron who was being forcibly removed from the premises. He believes he has been wrongfully treated by the bar. What four elements must be in place for Doug to make a claim that the bistro has been negligent?

Match the term with its definition. Some terms may not be used. -A cause of loss, either through natural events or through the actions of people

Match the term with its definition. Some terms may not be used. -A policy for small businesses that do not qualify for a BOP that combines property insurance, commercial general liability insurance, and crime insurance

Risk is

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

A: Managing Risk in the Small Business

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