Exam 23: Managing Risk in the Small Business

Match the term with its definition.Some terms may not be used a.Business interruption insurance b.Business owner's policy c.Combined public liability insurance d.Disability insurance e.Funds transfer fraud f.Key-person life insurance g.Package policy h.Personnel risks i.Proximate cause j.Reasonable standard k.Employers liability insurance -The criminal transfer of funds from a bank account.

Commercial crime insurance is most critical for a small business when:

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

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:

Discuss advantages and disadvantages to a company obtaining a commercial insurance policy.

Match the term with its definition.Some terms may not be used a.Motor insurance b.Coinsurance clause c.Commercial crime insurance d.Design defect e.Manufacturing defect f.Marketing defect g.Non-economic damages h.Partially self-funded programme i.Proximate cause j.Punitive damages k.Workers' compensation legislation -A defect resulting from a problem that occurs during the manufacturing process, causing the product to subsequently not be made according to specifications.

Match the term with its definition.Some terms may not be used 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 network k.Pure risk -The possibility of losses associated with the assets and earnings potential of a business.

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.

After explaining the different types of property and losses, which ones were issues for Sandy Winston, owner of Leidenheimer Baking Company?

Match the term with its definition.Some terms may not be used 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 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 a.Motor insurance b.Coinsurance clause c.Commercial crime insurance d.Design defect e.Manufacturing defect f.Marketing defect g.Non-economic damages h.Partially self-funded programme i.Proximate cause j.Punitive damages k.Workers' compensation legislation -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.

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

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

Match the term with its definition.Some terms may not be used 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 business's per-employee limit on self-funding for medical claims.

Quentin is getting quotes for insurance on his building.His agent recommends he purchase enough to cover the ___________________ even though this amount is more than Quentin paid for it.

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

Martin works as a security personnel 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 Martin to make a claim that the bar has been negligent?

Match the term with its definition.Some terms may not be used a.Business interruption insurance b.Business owner's policy c.Combined public liability insurance d.Disability insurance e.Funds transfer fraud f.Key-person life insurance g.Package policy h.Personnel risks i.Proximate cause j.Reasonable standard k.Employers liability insurance -Coverage for general liability loss exposure

Brenda expects there will be uncertainty regarding the outcome of her business decisions.The final result of those decisions will not be known until she has identified the investment opportunity, developed strategies and __________ to her business.

Monitoring social media is a form of risk transfer.