Question 1

You purchase $250,000 worth of insurance to protect your restaurant with a $10,000 deductible. How much money are you entitled to receive as a payout if a fire destroys your store which is valued at $250,000?

Accepted Answer

The insurance policy will cover the value of the loss, which is $250,000 - the deductible of $10,000 = $240,000. Therefore, the payout will be $240,000.

Question 2

Obtain a trademark in order to ________.

Accepted Answer

A trademark protects a logo, brand name, or other distinctive sign that identifies a product or service.

Question 3

To protect against lawsuits brought by anyone injured by your product, you will need to buy ________.

Accepted Answer

Liability insurance is specifically designed to protect against lawsuits brought by someone who is injured by your product. Business insurance, casualty insurance, and umbrella policies may provide additional protection, but they do not specifically cover product liability.

Question 4

________ insurance is designed to cover you in the event that a business (its employees) fails to do something that causes harm to a customer.

Accepted Answer

Errors and omissions insurance is designed to protect businesses from claims that arise from negligent acts, errors or omissions that result in harm to a customer. This type of insurance is often recommended for businesses that provide professional services, such as doctors, lawyers, consultants, and Realtors. Negligence insurance is a broad type of policy that can cover a wide range of risks, including E&O claims, but also covers other types of claims, such as bodily injury and property damage. Product liability insurance covers claims that arise from defective products, while casualty insurance covers a range of risks, including bodily injury, property damage, and other types of losses.

Question 5

What is used to identify and distinguish the source of a service rather than a product?

Accepted Answer

A service mark is used to identify and distinguish the source of a service rather than a product. A trademark is used to identify and distinguish the source of a product. Sales mark and intellectual property are not specific terms related to identifying the source of services or products.

Question 6

________ insurance compensates employees for loss of income and for medical expenses due to job-related injuries.

Accepted Answer

Worker's compensation insurance is specifically designed to compensate employees for loss of income and medical expenses resulting from job-related injuries. Short-term disability insurance covers only a portion of an employee's income, while disability insurance covers a broad range of disabling conditions, not just job-related injuries. "Injury" is too vague and does not specify that the injury is work-related.

Question 7

Of the three types of bankruptcies, Chapter 7 or Liquidation is the best choice to take.

Accepted Answer

The best type of bankruptcy to take depends on individual circumstances such as the amount and type of debt, assets, income, and goals. Chapter 7 may be the best option for some, but Chapter 13 or Chapter 11 may be preferable for others. It is important to consult with a bankruptcy attorney to determine the best type of bankruptcy for your specific situation.

Question 8

Explain the difference between a copyright and a trademark and how each is useful.

Accepted Answer

The answer of Explain the difference between a copyright and...

Question 9

Explain the three types of insurance most states require business owners to carry.

Accepted Answer

The answer of Explain the three types of insurance most...

Question 10

Federal, state and local ________ may apply to a business and may affect what it can do, how it can do it, and when and where it can operate.

Accepted Answer

Federal, state, and local regulations can dictate various operational aspects of a business, including compliance with laws and standards.

Question 11

________ protects people from having property or wealth stolen, lost or destroyed. There are many kinds and in order to purchase it you pay a monthly, quarterly or annual ________.

Accepted Answer

Insurance is the product that protects people from loss or damage to their property or wealth, and the amount paid to obtain this protection is called the premium. None of the other options accurately describe insurance and its associated cost.

Question 12

A low deductible will yield a ________.

Accepted Answer

A low deductible means that the insurance company will pay out a larger portion of a claim, which means the insurance company is at greater risk. To compensate for this increased risk, the insurance company charges a higher premium. Therefore, a low deductible will yield a higher premium.

Question 13

The form of protection offered under U.S. law to the authors of "original works of authorship" is a(n) ________.

Accepted Answer

The form of protection offered under U.S. law to the authors of "original works of authorship" is copyright. A copyright is a legal right given to the creator of an original work for a certain period of time, during which the creator has exclusive rights to use, copy, and distribute the work. This protection is intended to promote creativity and ensure that creators are rewarded for their work.

Question 14

Permits, licenses, or certificates may be required for your business. Local, county, and state government offices, as well as chambers of commerce, are good places to contact for this information.

Accepted Answer

Permits, licenses, or certificates may indeed be required for some businesses, and local government offices, chambers of commerce, and state offices can provide information on what is necessary.

Question 15

A(n) ________ is an official document that gives you the right to carry out a specific activity, such as an outdoor festival.

Accepted Answer

A permit is the most appropriate choice because it specifically refers to the authorization to carry out a specific activity, such as hosting an outdoor festival. A license and certificate may also be used in certain cases, but they typically refer to more general authorizations or qualifications. Entitlement does not fit the context because it refers to the right to certain benefits or privileges, rather than the authorization to carry out a specific activity.

Question 16

Infringement of intellectual property is ________.

Accepted Answer

Infringement of intellectual property is a crime as it violates laws related to patents, trademarks, and copyrights. It involves the unauthorized use, reproduction, or distribution of someone else's intellectual property without their permission.

Question 17

You do not need a patent unless you ________.

Accepted Answer

A patent is necessary only if you have invented a product that you want to market yourself or sell to a manufacturer, and you believe that someone else could successfully sell the product by copying your invention. Therefore, both options A and B are correct, leading to the choice of C.

Question 18

A ________ is the amount of loss or damage that you agree to cover before any insurance coverage takes over.

Accepted Answer

A deductible is the amount of money a policyholder must pay out-of-pocket before their insurance coverage starts paying for covered losses.

Question 19

A copyright protects a songwriter, author, or visual artist. It keeps someone else from copying or appropriating the work.

Accepted Answer

A copyright is a legal protection that gives the creator of a work exclusive rights to use and distribute that work. This includes the right to prevent others from copying, reproducing, or distributing the work without permission. The protection covers a variety of creative works, including music, literature, and visual art.

Question 20

If you invent something and don't patent it, it falls into the public domain, meaning that ________.

Accepted Answer

If you don't patent your invention, it becomes part of the public domain, which means anyone can manufacture and sell it without paying you any royalties or compensation.

Quiz 11: Addressing Legal Issues and Managing Risk