Exam 23: Managing Risk in the Small Business

A lease on a real property structure will relieve the lessee of any damage or loss to the leased premises.

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 -Stating in a property insurance policy that all direct damages are covered except those caused by perils specifically excluded.

For the most part, the rand value of employment practice claims ranges from R50 000 to R150 000, with insurance premiums ranging from R12 500 to R17 500.

Partially self-funded insurance programmes 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.

Barney places his new extension ladder on a slippery surface when he leans it against the wall.He climbs up; the ladder slips out from under him and he falls.Which type of product liability may exist in this situation?

Risk financing is the action of making funds available to cover losses that could not be eliminated by risk control.

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

Since the small business owner needs to rely heavily on an insurance agent for advice, risk management and insurance management are synonymous.

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 -Economic or non-economic damages intended to make the claimant whole by compensating the claimant for any injuries or loss arising from the negligent action.

Harold's ownership of a moving van for use in his business represents which form of risk?

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 typical standard of care, based on what a reasonable or prudent person would have done under similar circumstances.

Real property risks include damage to buildings.

A delivery truck owned by Martin's Lumber backed into a car owned by Bonnie.Bonnie asked Martin's Lumber to pay for the repairs to her car.Bonnie is asking for:

ACV refers to the depreciated value of a property.

The cost to replace or replicate property at today's prices is described by________.

Damage to a building by flooding is an example of:

A unique, attractive feature of a commercial insurance policy is that both real and personal property are valued on:

Requiring all servers in a restaurant to know how to properly lift heavy objects is an example of loss:

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

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