Exam 23: Managing Risk in the Small Business

A contractual clause that requires one party to assume the financial consequences of another party's legal liabilities is called:

Self-insurance requires:

Business interruption insurance covers:

Perry's business is not in the safest neighborhood.He is concerned about robbery and vandalism, two types of:

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 -An insurance term that refers to the depreciated value of property.

Risk is:

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 negligent act that is the clear cause of damages sustained.

Which term describes land and anything physically attached to the land, such as buildings?

Concern about the employees is considered in which principle of a sound insurance programme?

Philip leases retail space in a building owned by Roger.The lease agreement contains a(n) _____________ excusing Roger from responsibility for any financial consequences of Philip's actions.

Flood insurance can be purchased for only real property.

As a general rule, only ______ is insurable.

Identifying in an insurance policy the specific perils covered is a(n) __________ approach.

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 -Compensatory damages for such losses as pain and suffering, mental anguish and loss of physical abilities.

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 -Laws that obligate an employer to pay employees for injury or illness related to employment, regardless of fault.

Which action is part of the second step of a risk management programme analysis?

Dan bought a R5000 000 marina two years ago and obtained R4 000 000 of property insurance.Recently economic improvements on the lake has raised the property's value to R5 500 000 (the good news).But the general store had a fire causing R1 000 000 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?

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 is known as a(n):

Risk is the possibility of suffering harm or pain.

Specific and aggregate stop loss limits would be the best insurance plans of small businesses which have at least 80 employees.