Question 1

Match the term with its definition. Some terms may not be used.
-Coverage primarily against employee dishonesty

Accepted Answer

Crime insurance provides coverage primarily against employee dishonesty.

Answer: D 
 A design defect is a flaw in a product that makes it unreasonably dangerous.

Answer: E 
 A manufacturing defect is a mistake made during the production process that results in a product that is different from others in the same line and is unsafe.

Answer: F 
 A marketing defect is an error in advertising or labeling that misleads consumers about a product's proper use or risks.

Answer: G 
 Noneconomic damages are compensation for losses that are difficult to quantify monetarily, such as pain and suffering.

Answer: H 
 A partially self-funded program is a group insurance plan in which an employer assumes some of the financial risk.

Answer: I 
 Proximate cause refers to the direct cause of a loss or injury, rather than an indirect or remote cause.

Answer: J 
 Punitive damages are monetary awards intended to punish a defendant for egregious behavior.

Answer: K 
 Workers' compensation legislation provides benefits and medical care to employees who are injured on the job.

Answers not used: A, B.

Question 2

Doug works security at a bar and was recently hurt by a patron who was being forcibly removed from the premises. He believes he has been wrongfully treated by the bar. What four elements must be in place for Doug to make a claim that the bistro has been negligent?

Accepted Answer

The answer of Doug works security at a bar and...

Question 3

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

Accepted Answer

The definition matches the coinsurance clause provision in a property insurance policy.

Question 4

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

Accepted Answer

A marketing defect is 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.

Note: The other terms do not match the given definition.

Question 5

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 design defect is a flaw in the design of the product that makes it dangerous, even if the product was made according to specifications.

Answer: E 
 A manufacturing defect results from an error in the manufacturing process that makes the product dangerous.

Answer: F 
 A marketing defect refers to a failure to provide adequate warnings or instructions about how to safely use the product.

Answer: G 
 Noneconomic damages refer to compensation for losses that aren't financial, such as pain and suffering.

Answer: I 
 Proximate cause is a legal term that refers to the link between an action or event and the resulting injury or damage.

Answer: J 
 Punitive damages are awarded to punish the defendant rather than to compensate the plaintiff.

Answer: K 
 Workers' compensation legislation provides benefits to employees who are injured on the job, regardless of who was at fault.

Answer: A, B, H 
 Automobile insurance provides coverage for damage to a vehicle, while coinsurance clauses stipulate that the insured must bear a percentage of the loss. Partially self-funded programs allow employers to assume some of the risk of providing health insurance to their employees. Crime insurance provides coverage for losses resulting from criminal activity.

Question 6

Match the term with its definition. Some terms may not be used.
-Laws that obligate an employer to pay employees for injury or illness related to employment, regardless of fault

Accepted Answer

Workers' compensation legislation obligates an employer to pay employees for injury or illness related to employment, regardless of fault.

Question 7

Since Melissa is starting a day care center in her home, what business risks should be insured? How can an insurance agent assist in the insurance evaluation process?

Accepted Answer

The answer of Since Melissa is starting a day care...

Question 8

Match the term with its definition. Some terms may not be used.
-A form of punishment beyond compensatory damages that intends to punish wrongdoers for gross negligence or callous disregard and to have a deterrent effect.

Accepted Answer

Punitive damages are a form of punishment beyond compensatory damages that are intended to punish wrongdoers for gross negligence or callous disregard and have a deterrent effect.

Question 9

Match the term with its definition. Some terms may not be used.
-A program that designates part of a firm's earnings to fund a portion of employee medical coverage

Accepted Answer

A partially self-funded program designates part of a firm's earnings to fund a portion of employee medical coverage. None of the other terms relate to this definition.

Question 10

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

The answer of Jackie owns a building in a downtown...

Question 11

Discuss the differences between pure risk, business risk and market risk.

Accepted Answer

The answer of Discuss the differences between pure risk, business...

Question 12

After discussing the risk management process, list specific areas of concern for each step.

Accepted Answer

The answer of After discussing the risk management process, list...

Question 13

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?

Accepted Answer

The answer of Beth has started an elder care service....

Question 14

Match the term with its definition. Some terms may not be used.
-Coverage that provides benefits to employees injured at work

Accepted Answer

Workers' compensation insurance provides benefits to employees who are injured at work.

Question 15

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

Accepted Answer

The answer of List the basic principles in evaluating an...

Question 16

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

Accepted Answer

The answer of After explaining the different types of property...

Question 17

Dan bought a $500,000 marina two years ago and obtained $400,000 of property insurance. Recently economic improvements on the lake has raised the property's value to $550,000 (the good news). But the general store had a fire causing $100,000 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?

Accepted Answer

The answer of Dan bought a $500,000 marina two years...

Question 18

Match the term with its definition. Some terms may not be used.
-Compensatory damages for such losses as pain and suffering, mental anguish, and loss of physical abilities

Accepted Answer

Noneconomic damages refer to compensatory damages for losses that cannot be easily quantified, such as pain and suffering or mental anguish.

Answer: I
 Proximate cause refers to the direct cause of an event, rather than a remote or indirect cause.

Answer: J
 Punitive damages are awarded as punishment to the defendant, in addition to compensatory damages, for actions that are deemed malicious or especially negligent.

Answer: D, E, F 
 Design defects, manufacturing defects, and marketing defects are all types of product liability claims.

Answer: K
 Workers' compensation legislation refers to laws that require employers to provide insurance to employees for work-related injuries or illnesses.

Answer: A, H 
 Automobile insurance and partially self-funded programs are both types of insurance programs. A coinsurance clause is a provision in an insurance policy where the insured and insurer share the cost of a claim up to a certain percentage. Crime insurance refers to coverage specifically for losses due to criminal acts.

Question 19

Match the term with its definition. Some terms may not be used.
-A defect resulting from a problem that occurs during the manufacturing process, causing the product to subsequently not be made according to specifications

Accepted Answer

A manufacturing defect is a type of product defect that results from an error in the manufacturing process. As a result, the product does not meet the specifications that were intended by the manufacturer.

Question 20

Match the term with its definition. Some terms may not be used.
-Coverage designed to provide liability and physical damage protection for a vehicle

Accepted Answer

The term "automobile insurance" refers to coverage designed to provide liability and physical damage protection for a vehicle. The other terms listed do not match this definition.

Quiz 23: A: Managing Risk in the Small Business

Match the term with its definition. Some terms may not be used. -Coverage primarily against employee dishonesty

Doug works security at a bar and was recently hurt by a patron who was being forcibly removed from the premises. He believes he has been wrongfully treated by the bar. What four elements must be in place for Doug to make a claim that the bistro has been negligent?

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

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

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

Match the term with its definition. Some terms may not be used. -Laws that obligate an employer to pay employees for injury or illness related to employment, regardless of fault

Since Melissa is starting a day care center in her home, what business risks should be insured? How can an insurance agent assist in the insurance evaluation process?

Match the term with its definition. Some terms may not be used. -A form of punishment beyond compensatory damages that intends to punish wrongdoers for gross negligence or callous disregard and to have a deterrent effect.

Match the term with its definition. Some terms may not be used. -A program that designates part of a firm's earnings to fund a portion of employee medical coverage

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?

Discuss the differences between pure risk, business risk and market risk.

After discussing the risk management process, list specific areas of concern for each step.

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. -Coverage that provides benefits to employees injured at work

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

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

Match the term with its definition. Some terms may not be used. -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 defect resulting from a problem that occurs during the manufacturing process, causing the product to subsequently not be made according to specifications

Match the term with its definition. Some terms may not be used. -Coverage designed to provide liability and physical damage protection for a vehicle