Deck 5: Insurance

Question 1

The four general categories of insurance are property, liability, earnings, and health/disability/life.

Answer 1

True

Question 2

Risks that can be insured are known as controllable risks.

Answer 2

True

Question 3

Controllable risks can be prevented.

Answer 3

False

Question 4

Workers' compensation provides income and payments for medical expenses to workers who are injured in job-related accidents.

Question 5

The amount a company must pay for workers' compensation insurance depends primarily on the age of the worker.

Question 6

Vehicle insurance is a type of property insurance.

Question 7

Employee liability insurance covers claims resulting from employee lawsuits charging discrimination or sexual harassment.

Question 8

Property insurance covers the loss of assets and the loss of profits.

Question 9

Business interruption insurance covers the financial loss resulting from the temporary closure of the business.

Question 10

Bad-debt insurance and business interruption insurance are types of earnings insurance.

Question 11

Controllable risks are those that are

A) preventable.
B) insurable.
C) easy to identify.
D) not likely to happen.

Question 12

Workers' compensation provides income and payments for medical expenses to workers who

A) are injured in job-related accidents.
B) develop terminal illnesses.
C) have families.
D) do not have their own medical insurance.

Question 13

Workers' compensation insurance is

A) required for all companies with one or more employees.
B) required for all companies with more than five employees.
C) not required by law.
D) governed by state laws and benefits vary greatly.

Question 14

The amount a company must pay for workers' compensation insurance depends primarily on the

A) age of the worker.
B) health of the worker.
C) risk level of the job.
D) age of the entrepreneur.

Question 15

Workers' compensation rates are determined by

A) the risk level of the job.
B) the level of the payroll.
C) the safety record of the company.
D) all of the above.

Question 16

Companies may find that they are unable to purchase insurance from private insurance firms if

A) they are very small.
B) they have a high accident rate.
C) they are in a high-risk industry.
D) all of the above.

Question 17

Companies that are unable to purchase workers' compensation from private insurance firms

A) will go out of business.
B) are often assigned to state-funded insurance plans.
C) must buy insurance from foreign insurance firms.
D) must pay for all claims out of company funds.

Question 18

Which of the following is not one of the four general categories of insurance?

A) Property
B) Comprehensive
C) Liability
D) Health/disability/life

Question 19

Damage to vehicles caused by fire and storms is covered by

A) collision vehicle insurance.
B) liability vehicle insurance.
C) comprehensive vehicle insurance.
D) uninsured motorist insurance.

Question 20

If a company vehicle hits and damages a home, this loss is covered if the company has

A) collision vehicle insurance.
B) liability vehicle insurance.
C) comprehensive vehicle insurance.
D) uninsured motorist insurance.

Question 21

Suppose an employee for XYZ Company causes a traffic accident while driving the company van. XYZ's van sustains $3,000 in damages. The repair costs would be covered if XYZ had

A) collision vehicle insurance.
B) liability vehicle insurance.
C) comprehensive vehicle insurance.
D) uninsured motorist insurance.

Question 22

Fire, flood, and earthquake insurance are types of ___ insurance.

A) property
B) liability
C) earnings
D) fidelity

Question 23

Theft insurance covers financial loss resulting from

A) any illegal taking of property.
B) theft with forcible entry.
C) theft with the threat of bodily harm.
D) none of the above.

Question 24

Burglary insurance covers financial loss resulting from

A) any illegal taking of property.
B) theft only with forcible entry.
C) theft only with the threat of bodily harm.
D) none of the above.

Question 25

Robbery insurance covers financial loss resulting from

A) any illegal taking of property.
B) theft only with forcible entry.
C) theft only with the threat of bodily harm.
D) none of the above.

Question 26

Employee theft is covered by

A) workers' compensation.
B) bad-debt insurance.
C) fidelity bonds.
D) business-interruption.

Question 27

If inventory is damaged while being transported by ship, this is covered by

A) bad-debt insurance.
B) product liability insurance.
C) ocean marine insurance.
D) comprehensive vehicle insurance.

Question 28

If inventory is damaged while being transported by truck, plane, or train, this is covered by

A) inland marine insurance.
B) product liability insurance.
C) ocean marine insurance.
D) comprehensive vehicle insurance.

Question 29

Losses resulting from employee lawsuits charging discrimination or sexual harassment are covered by

A) employee liability insurance.
B) key executive insurance.
C) workers' compensation.
D) officers' and directors' insurance.

Question 30

Which of the following is FALSE concerning officers and directors of corporations?

A) They may be sued for negligent decision making.
B) They may purchase officers and directors insurance.
C) Officers and directors insurance is a type of liability insurance.
D) They do not need insurance because they have limited liability.

Question 31

If job contracts are not completed properly or on time, this may be covered through

A) fidelity bonds.
B) surety bonds.
C) completed operations insurance.
D) bad-debt insurance.

Question 32

If a landscaping company damages a home while planting bushes and trees, the damage would be covered if the landscaping company had

A) fidelity bonds.
B) product liability insurance.
C) completed operations insurance.
D) professional liability.

Question 33

If a customer slips on a wet floor in a grocery store and then sues the store, this claim would be covered by

A) fidelity bonds.
B) product liability insurance.
C) completed operations insurance.
D) premises and operations insurance.

Question 34

Suppose someone is injured using a lawn mower and sues the manufacturer. Any claims would be covered if the manufacturer had

A) surety bonds.
B) product liability insurance.
C) premises and operations insurance.
D) disability insurance.

Question 35

If a company is temporarily closed, the financial losses would be covered by

A) bad-debt insurance.
B) premises and operations insurance.
C) completed operations insurance.
D) business-interruption insurance.