Exam 23: Managing Risk in the Small Business

Combined public liability insurance covers:

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 form of punishment beyond compensatory damages that intends to punish wrongdoers for gross negligence or callous disregard and to have a deterrent effect.

Indemnification clauses should be reviewed by an insurance agent or broker to limit liabilities to a small business.

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.

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 that provides benefits to a business upon the death of key personnel.

Richard must carry employers' liability insurance to fulfill his ________________ obligation.

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

Self-insurance requires designating part of a business's insurance proceeds to provide life insurance on key employees.

For a person to be found guilty of a negligent act, the negligent act must be the ____ cause of the loss in a tort liability claim.

A "prudent person" is also known as:

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

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 -Coverage designed to provide liability and physical damage protection for a vehicle.

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 -A policy for small businesses that do not qualify for a commercial insurance policy that combines property insurance, public liability insurance and commercial crime insurance.

Market risk is uncertainty associated with a situation where only loss or no loss can occur.

Disability buyout insurance:

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 dangerous design, even though the product was made according to specifications.

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 -Coverage primarily against employee dishonesty.

Loss reduction is defined as preventing losses from ever happening.

Business risks can be classified into two broad categories - asset risk and pure risk.

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