Question 1

Match the term with its definition. Some terms may not be used.
-A loss arising from an inability to carry on normal operations due to a direct loss of property

Accepted Answer

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

Question 2

Match the term with its definition. Some terms may not be used.
-A comprehensive limit on annual expenses should a number of employees reach the firm's per-employee limit on self-funding for medical claims

Accepted Answer

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

Question 3

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

Accepted Answer

A)  Real property 
B)  Personal property 
C)  Replacement value of property 
D)  Actual cash value

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Matchteh term with its definition. Some terms may not be used.
-Ways of coping with risk that are designed to preserve the assets and earning power of a firm

Accepted Answer

A) Disability insurance 
B) Personal property 
C) Proximate cause 
D) Real property 
E) Risk control
F)Risk financing
G)Risk management
H)Risk retention
I)Risk transfer
J)Self-insurance
K)Torts

Question 6

Matchteh term with its definition. Some terms may not be used.
-Minimizing potential losses by preventing, avoiding, and/or reducing risk

Accepted Answer

A) Disability insurance 
B) Personal property 
C) Proximate cause 
D) Real property 
E) Risk control
F)Risk financing
G)Risk management
H)Risk retention
I)Risk transfer
J)Self-insurance
K)Torts

Question 7

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.

Accepted Answer

A) True 
 B)False

Question 8

Match the term with its definition. Some terms may not be used.
-A defect resulting from a dangerous design, even though the product was made according to specifications

Accepted Answer

A) Automobile insurance 
B) Coinsurance clause 
C) Crime insurance 
D) Design defect 
E) Manufacturing defect
F)Marketing defect
G)Noneconomic damages
H)Partially self-funded program
I)Proximate cause
J)Punitive damages
K)Workers' compensation legislation

Question 9

Loss prevention is defined as lessening the frequency, severity, or unpredictability of losses.

Accepted Answer

A) True 
 B)False

Question 10

A small company can protect itself against the death of important personnel by carrying CGL insurance.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A)  Classification of risks 
B)  Deciding on an action 
C)  Determining risk control methods 
D)  Systematic risk analysis

Question 12

Which risk type directly affects the employee but indirectly impact the business?

Accepted Answer

A)  Liability 
B)  Personnel 
C)  Property 
D)  Pure

Question 13

Damage to a building by fire is an example of

Accepted Answer

A)  a benign neglect loss. 
B)  a direct loss. 
C)  a tort-based liability claim. 
D)  a depreciated cash value loss.

Question 14

Match the term with its definition. Some terms may not be used.
-A policy for small businesses that do not qualify for a BOP that combines property insurance, commercial general liability insurance, and crime insurance

Accepted Answer

A) Business interruption insurance 
B) Business owner's policy 
C) Commercial general liability insurance 
D) Disability insurance 
E) Indemnification clause
F)Key-person life insurance
G)Package policy
H)Personnel risks
I)Proximate cause
J)Reasonable standard
K)Workers' compensation insurance

Question 15

Match the term with its definition. Some terms may not be used.
-A loss in which physical damage to property reduces its value to the property owner

Accepted Answer

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

Question 16

Driving as safely as possible is an example of loss

Accepted Answer

A)  avoidance. 
B)  control. 
C)  prevention. 
D)  reduction.

Question 17

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

Accepted Answer

A)  60 
B)  70 
C)  80 
D)  90

Question 18

Match the term with its definition. Some terms may not be used.
-Risks that directly affect individual employees but may have an indirect impact on a business as well

Accepted Answer

A) Business interruption insurance 
B) Business owner's policy 
C) Commercial general liability insurance 
D) Disability insurance 
E) Indemnification clause
F)Key-person life insurance
G)Package policy
H)Personnel risks
I)Proximate cause
J)Reasonable standard
K)Workers' compensation insurance

Question 19

Match the term with its definition. Some terms may not be used.
-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

Accepted Answer

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 organization
K)Pure risk

Question 20

ACV refers to the depreciated value of a property.

Accepted Answer

A) True 
 B)False

Exam 23: A: Managing Risk in the Small Business

Match the term with its definition. Some terms may not be used. -A loss arising from an inability to carry on normal operations due to a direct loss of property

Match the term with its definition. Some terms may not be used. -A comprehensive limit on annual expenses should a number of employees reach the firm's per-employee limit on self-funding for medical claims

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

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

Matchteh term with its definition. Some terms may not be used. -Ways of coping with risk that are designed to preserve the assets and earning power of a firm

Matchteh term with its definition. Some terms may not be used. -Minimizing potential losses by preventing, avoiding, and/or reducing risk

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 defect resulting from a dangerous design, even though the product was made according to specifications

Loss prevention is defined as lessening the frequency, severity, or unpredictability of losses.

A small company can protect itself against the death of important personnel by carrying CGL insurance.

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

Which risk type directly affects the employee but indirectly impact the business?

Damage to a building by fire is an example of

Match the term with its definition. Some terms may not be used. -A policy for small businesses that do not qualify for a BOP that combines property insurance, commercial general liability insurance, and crime insurance

Match the term with its definition. Some terms may not be used. -A loss in which physical damage to property reduces its value to the property owner

Driving as safely as possible is an example of loss

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

Match the term with its definition. Some terms may not be used. -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. -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

ACV refers to the depreciated value of a property.