Question 1

Bob and Tom are partners in a business.  Discuss the types of insurance the business should carry if something should happen to one of the partners.

Accepted Answer

*Key person insurance.  The business sho

Question 2

List the basic principles in evaluating an insurance program. How can an insurance agent assist a small business owner?

Accepted Answer

Basic principles in evaluating an insura

Question 3

Monitoring social media is a form of risk transfer.

Accepted Answer

A) True 
 B)False

Question 4

Morton is discussing with his insurance agent the possibility that he might lose his building and equipment in the event of a fire or windstorm.  Should that happen, Morton's company would not be able to earn revenues.  These two people are discussing

Accepted Answer

A)  risk. 
B)  pure risk. 
C)  business risk. 
D)  market risk. 
A)  risk. 
B)  pure risk. 
C)  business risk. 
D)  market risk.

Question 5

Small businesses are particularly vulnerable to employee fraud because of weak financial controls.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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?

Accepted Answer

Jackie has pure risk and market risk wit

Question 8

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

Accepted Answer

A)  worker's compensation clause. 
B)  extra clause. 
C)  indemnification clause. 
D)  tort. 
A)  worker's compensation clause. 
B)  extra clause. 
C)  indemnification clause. 
D)  tort.

Question 9

Real property risks include damage to buildings.

Accepted Answer

A) True 
 B)False

Question 10

A customer's slip and fall injury would be covered by

Accepted Answer

A)  commercial general liability insurance. 
B)  surety bonds. 
C)  business interruption insurance. 
D)  commercial property coverage. 
A)  commercial general liability insurance. 
B)  surety bonds. 
C)  business interruption insurance. 
D)  commercial property coverage.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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:

Accepted Answer

A)  exemplary damages. 
B)  non-economic damages. 
C)  compensatory damages. 
D)  punitive damages. 
A)  exemplary damages. 
B)  non-economic damages. 
C)  compensatory damages. 
D)  punitive damages.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Partially self-funded insurance programs 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.

Accepted Answer

A) True 
 B)False

Question 16

Match between columns
                        Premises: Coverage primarily against employee dishonesty
A defect resulting from a problem that occurs during the manufacturing process, causing the product to subsequently not be made according to specifications
A defect resulting from a dangerous design, even though the product was made according to specifications
A form of punishment beyond compensatory damages that intends to punish wrongdoers for gross negligence or callous disregard and to have a deterrent effect.
A program that designates part of a firm's earnings to fund a portion of employee medical coverage
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
Coverage designed to provide liability and physical damage protection for a vehicle
Laws that obligate an employer to pay employees for injury or illness related to employment, regardless of fault
A provision in a property insurance policy that requires the owner to have insurance for at least 80 percent of what it would cost to rebuild the building or replace the personal property
Compensatory damages for such losses as pain and suffering, mental anguish, and loss of physical abilities

Accepted Answer

The Answer of Marketing defect and Noneconomic damages and Punitive is...

Question 17

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

Accepted Answer

There are two general types of property.

Question 18

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

Accepted Answer

A)  no-risk 
B)  named-peril 
C)  coinsurance 
D)  all-risk 
A)  no-risk 
B)  named-peril 
C)  coinsurance 
D)  all-risk

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Review and evaluate is an important step in the risk management process because

Accepted Answer

A)  conditions change and mistakes may be identified. 
B)  it is nearly impossible to evaluate risk effectively. 
C)  of the challenges in identifying small business risks. 
D)  of the difficulty in selecting effective methods. 
A)  conditions change and mistakes may be identified. 
B)  it is nearly impossible to evaluate risk effectively. 
C)  of the challenges in identifying small business risks. 
D)  of the difficulty in selecting effective methods.

Exam 23: Managing Risk

Bob and Tom are partners in a business. Discuss the types of insurance the business should carry if something should happen to one of the partners.

List the basic principles in evaluating an insurance program. How can an insurance agent assist a small business owner?

Monitoring social media is a form of risk transfer.

Morton is discussing with his insurance agent the possibility that he might lose his building and equipment in the event of a fire or windstorm. Should that happen, Morton's company would not be able to earn revenues. These two people are discussing

Small businesses are particularly vulnerable to employee fraud because of weak financial controls.

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

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?

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

Real property risks include damage to buildings.

A customer's slip and fall injury would be covered by

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

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:

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

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

Partially self-funded insurance programs 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.

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

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

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

Review and evaluate is an important step in the risk management process because

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