Question 1

Match the term with its definition. Some terms may not be used.
-Coverage that designates part of a firm's earnings as a cushion against possible future losses

Accepted Answer

The answer of Match the term with its definition. Some...

Question 2

Match the term with its definition. Some terms may not be used.
-Coverage that reimburses a business for the loss of anticipated income following the interruption of business operations

Accepted Answer

Business interruption insurance provides coverage for loss of income due to the interruption of business operations.

Answer: B
 Business owner's policy is a package policy that combines property and liability insurance for small businesses.

Answer: C
 Commercial general liability insurance provides coverage for bodily injury, property damage, and personal and advertising injury liability.

Answer: D 
 Disability insurance provides coverage for a person's loss of income due to a disability.

Answer: F 
 Key-person life insurance provides coverage in the event of the death of a key employee who is vital to the business.

Answer: G 
 A package policy is a type of insurance policy that combines several coverages into one policy.

Answer: H 
 Personnel risks are risks associated with employees, such as the risk of employee theft, fraud, or injury.

Answer: I 
 Proximate cause is the primary cause of an event, which may be used to determine liability in an insurance claim.

Answer: K 
 Workers' compensation insurance provides coverage for employees who are injured or become ill as a result of their job duties.

Question 3

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

Personnel risks are risks that directly affect individual employees but may have an indirect impact on a business as well.

Question 4

Match the term with its definition. Some terms may not be used.
-A negligent act that is the clear cause of damages sustained

Accepted Answer

Proximate cause is a negligent act that is the clear cause of damages sustained.

Answer: J
 Reasonable standard is a legal concept that refers to a level of care that is considered reasonable or appropriate under the circumstances.

Answer: A
 Business interruption insurance is a type of insurance that provides coverage for lost income and extra expenses in the event that a business is unable to operate as usual due to a covered event.

Answer: C
 Commercial general liability insurance is a type of insurance that provides coverage for a variety of liability risks that businesses may face.

Answer: F
 Key-person life insurance is a type of insurance that provides coverage in the event that a key employee or executive of a business passes away.

Answer: G
 Package policy is a type of insurance policy that combines several different types of coverage into one policy.

Answer: H
 Personnel risks refers to the risks associated with employees or other people associated with a business, such as discrimination or harassment claims.

Answer: D and K
 Disability insurance provides coverage for individuals who are unable to work due to a disability, while workers' compensation insurance provides coverage for employees who are injured or become ill as a result of their job.

Answer: E
 An indemnification clause is a contractual provision that requires one party to compensate the other party for losses or damages that may occur as a result of the contract.

Question 5

Match the term with its definition. Some terms may not be used.
-The typical standard of care, based on what a reasonable or prudent person would have done under similar circumstances

Accepted Answer

The term "reasonable standard" refers to the typical standard of care, based on what a reasonable or prudent person would have done under similar circumstances.

Answer: E
 An indemnification clause is a provision in a contract that requires one party to compensate the other party for losses or damages that result from the first party's actions or omissions.

Answer: I
 Proximate cause is a legal concept referring to the cause-and-effect relationship between an act or event and the resulting harm or damage. It is a key factor in determining liability in tort cases.

Answer: B
 A business owner's policy (BOP) is a type of insurance that combines general liability coverage with property insurance, typically at a lower cost than purchasing each type of coverage separately.

Answer: F
 Key-person life insurance is a type of insurance that companies can purchase on the lives of crucial employees or executives. If the key person dies, the company receives a payout to help cover lost income or other costs.

Answer: K
 Workers' compensation insurance is a type of insurance that provides benefits to employees who are injured or become ill as a result of their work. It typically covers medical expenses, lost wages, and other costs related to the injury or illness.

The following terms were not used in the explanations:
A)Business interruption insurance
C)Commercial general liability insurance
D)Disability insurance
G)Package policy
H)Personnel risks

Question 6

Match the term with its definition. Some terms may not be used.
-Any property other than land and anything physically attached to the land, such as buildings

Accepted Answer

The answer of Match the term with its definition. Some...

Question 7

Match the term with its definition. Some terms may not be used.
-Land and anything physically attached to the land, such as buildings

Accepted Answer

Real property refers to land and anything attached to it, such as buildings or other structures.

Question 8

Match the term with its definition. Some terms may not be used.
-Financing loss intentionally through a firm's cash flows

Accepted Answer

The answer of Match the term with its definition. Some...

Question 9

Match the term with its definition. Some terms may not be used.
-Buying insurance or making contractual arrangements that transfer risk to others

Accepted Answer

Risk transfer involves buying insurance or making contractual arrangements that transfer risk to others.

Question 10

Match the term with its definition. Some terms may not be used.
-Making funds available to cover losses that cannot be eliminated by risk control

Accepted Answer

Risk financing refers to the methods used to fund losses that cannot be eliminated by risk control.

Question 11

Match the term with its definition. Some terms may not be used.
-Wrongful acts or omissions for which an injured party can take legal action against the wrongdoer for monetary damages

Accepted Answer

Torts are wrongful acts or omissions for which an injured party can take legal action against the wrongdoer for monetary damages.

Answer: H
 Workers' compensation insurance provides benefits to employees who are injured or become ill as a direct result of their job.

Answer: I
 Workers' compensation legislation establishes the requirements and procedures for providing benefits to employees who are injured or become ill as a direct result of their job.

Question 12

Match the term with its definition. Some terms may not be used.
-Coverage that provides benefits upon the disability of a firm's partner or other key employee

Accepted Answer

The answer of Match the term with its definition. Some...

Question 13

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

Accepted Answer

Risk control refers to minimizing potential losses by preventing, avoiding, and/or reducing risk.

Question 14

Match the term with its definition. Some terms may not be used.
-A contractual clause that requires one party to assume the financial consequences of another party's legal liabilities

Accepted Answer

An indemnification clause is a contractual clause that requires one party to assume the financial consequences of another party's legal liabilities.

Answer: C
 Commercial general liability insurance provides coverage for third-party bodily injury and property damage that the insured is legally responsible for.

Answer: B
 A business owner's policy (BOP) is a package policy that combines general liability insurance and property insurance into one policy.

Answer: D
 Disability insurance provides income replacement in the event of a disability that prevents the insured from working.

Answer: F
 Key-person life insurance is a life insurance policy that covers the life of a key employee, and provides death benefits to the business in the event that the key employee dies.

Answer: G
 A package policy is an insurance policy that combines multiple coverages into one policy.

Answer: H
 Personnel risks are risks associated with employees, including employment practices liability, workers' compensation, and employee benefits liability.

Answer: I
 Proximate cause is a legal term used to determine liability, and refers to the event that directly caused the loss or damage.

Answer: J
 A reasonable standard is a standard of care that is considered reasonable under the circumstances, and is used to determine liability in a legal decision.

Answer: K
 Workers' compensation insurance provides benefits to employees who are injured or become ill as a result of their employment.

Question 15

Match the term with its definition. Some terms may not be used.
-Coverage for general liability loss exposure

Accepted Answer

Commercial general liability insurance provides coverage for a business's general liability loss exposure.

Question 16

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

Package policy is a policy for small businesses that do not qualify for a BOP that combines property insurance, commercial general liability insurance, and crime insurance.

Answer: C
 Commercial general liability insurance provides coverage for third-party bodily injury, property damage, and personal injury claims against the business.

Answer: F
 Key-person life insurance is a type of life insurance that a business purchases on the life of a key employee to protect against financial loss in case of that employee's death.

Answer: I
 Proximate cause refers to the direct cause of an event or loss, without which the loss would not have occurred.

Answer: J
 Reasonable standard refers to a standard of care that is reasonable for a particular situation, activity, or industry.

Answer: K
 Workers' compensation insurance provides benefits to employees who are injured or become ill as a result of their employment.

The terms not used in the definitions above are: Business interruption insurance, Disability insurance, Indemnification clause, Personnel risks.

Question 17

Match the term with its definition. Some terms may not be used.
-A business version of a homeowner's policy designed to meet the property and general liability insurance needs of some small business owners

Accepted Answer

A Business owner's policy is a business version of a homeowner's policy designed to meet the property and general liability insurance needs of some small business owners.

Question 18

Match the 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

The answer of Match the term with its definition. Some...

Question 19

Match the term with its definition. Some terms may not be used.
-A managed-care network providing health insurance that is more expensive but offers a broader choice of medical providers

Accepted Answer

The answer of Match the term with its definition. Some...

Question 20

Match the term with its definition. Some terms may not be used.
-Coverage that provides benefits to a firm upon the death of key personnel

Accepted Answer

Key-person life insurance provides benefits to a firm upon the death of key personnel. The other terms do not match this definition.

Quiz 23: Managing Risk in the Small Business

Match the term with its definition. Some terms may not be used. -Coverage that designates part of a firm's earnings as a cushion against possible future losses

Match the term with its definition. Some terms may not be used. -Coverage that reimburses a business for the loss of anticipated income following the interruption of business operations

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. -A negligent act that is the clear cause of damages sustained

Match the term with its definition. Some terms may not be used. -The typical standard of care, based on what a reasonable or prudent person would have done under similar circumstances

Match the term with its definition. Some terms may not be used. -Any property other than land and anything physically attached to the land, such as buildings

Match the term with its definition. Some terms may not be used. -Land and anything physically attached to the land, such as buildings

Match the term with its definition. Some terms may not be used. -Financing loss intentionally through a firm's cash flows

Match the term with its definition. Some terms may not be used. -Buying insurance or making contractual arrangements that transfer risk to others

Match the term with its definition. Some terms may not be used. -Making funds available to cover losses that cannot be eliminated by risk control

Match the term with its definition. Some terms may not be used. -Wrongful acts or omissions for which an injured party can take legal action against the wrongdoer for monetary damages

Match the term with its definition. Some terms may not be used. -Coverage that provides benefits upon the disability of a firm's partner or other key employee

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

Match the term with its definition. Some terms may not be used. -A contractual clause that requires one party to assume the financial consequences of another party's legal liabilities

Match the term with its definition. Some terms may not be used. -Coverage for general liability loss exposure

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 business version of a homeowner's policy designed to meet the property and general liability insurance needs of some small business owners

Match the 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

Match the term with its definition. Some terms may not be used. -A managed-care network providing health insurance that is more expensive but offers a broader choice of medical providers

Match the term with its definition. Some terms may not be used. -Coverage that provides benefits to a firm upon the death of key personnel