Exam 23: Managing Risk in the Small Business

Pain, suffering, mental anguish and loss of physical abilities are included in which type of damages in a tort case?

When considering the feasibility and affordability of insuring small potential losses, which company programme will impact this decision?

One risk that small businesses normally cover is loss due to the disability of a partner or other key employee of the 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 -Keeping a loss from happening.

A managed-care network providing health insurance that is approved by a medical aid scheme called a:

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 programme that designates part of a business's earnings to fund a portion of employee medical coverage.

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 managed-care network providing health insurance that is less expensive but more limiting in choices of medical providers.

Wrongful acts or omissions for which an injured party can take legal action against the wrongdoer to seek monetary damages are called statutory liability.

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 an investment decision.

Funds transfer fraud provides coverage primarily against employee dishonesty.

Jackie owns a building in a downtown area.Her building is used for office space and is rented to a current business tenant.What kind of risk is associated with this property and is this type of risk insurable?

Beth has started an elder care service.Employees work with persons who are not ready to leave their home but have some disability that prevents them from being fully mobile.What should Beth consider in managing the associated 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 -Risks that directly affect individual employees but may have an indirect impact on a business as well.

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 -Lessening the frequency, severity or unpredictability of potential losses.

Securing insurance coverage for all major potential losses would involve making certain that insurance covers the full replacement value of the business's real and personal property.

A coinsurance provision requires that a property be insured for at least ____ per cent of its value.

An insurance agent should provide information in designing an insurance plan; the small business owner will only need to determine the price the company can afford.

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 provision in a property insurance policy that requires the owner to have insurance for at least 80 per cent of what it would cost to rebuild the building or replace the personal property.

Pure risk refers to a situation where only loss or no loss can occur - there is no potential gain.

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 in which physical damage to property reduces its value to the property owner.