Deck 9: Risk Management Issues

Question 1

According the author, which of the following is a must before you open the doors of your business?

A) at least one Plan B
B) business insurance number (BN)
C) business identity number (BIN)
D) buy-sell agreement

Answer 1

at least one Plan B

Question 2

Which of the following traditionally is NOT covered under a business insurance policy?

A) unintentional losses
B) unforeseen losses
C) everyday business risks
D) death of an owner

Answer 2

everyday business risks

Question 3

Which of the following factors should be included in a shareholders' agreement?

A) statement of due diligence
B) Plan B
C) buy-sell option
D) copyright registration

Answer 3

buy-sell option

Question 4

Which of the following is a type of insurance coverage to ensure that work on a contract is finished as agreed?

A) fidelity bond
B) completion bond
C) public liability bond
D) malpractice

Question 5

Which of the following would most likely be required to sign a completion bond?

A) bookkeeper
B) general contractor
C) shareholder
D) partner

Question 6

Which type of business insurance covers lost earnings and other indirect costs when a business is interrupted because of fire or other catastrophe?

A) fidelity
B) business
C) accidental
D) consequential loss

Question 7

Which type of insurance helps protect a business against employee claims such as wrongful discharge?

A) employment practices liability insurance
B) supplemental employee liability insurance
C) errors and omissions insurance
D) malpractice insurance

Question 8

Which of the following is a major disadvantage of homeowner's insurance when operating a business out of your home?

A) it may be excessively costly
B) it may provide unnecessary coverage
C) it may be inadequate
D) it may cover your normal business risks

Question 9

Which of the following oversees occupational health and safety in Canada?

A) Workers' Compensation Board of Canada
B) Canadian Centre for Occupational Health and Safety
C) Health Canada
D) federal and provincial legislation

Question 10

Which of the following is characteristic of errors and omissions insurance?

A) covers specialized equipment not covered in standard policies
B) covers injury to the public, such as customer use or misuse of products
C) covers against claims from clients who suffer from injury or loss because of errors you made, things you should have done but failed to do, or warnings you failed to supply
D) covers the life, death, dismemberment, or physical disability of owner(s) or key employee(s)

Question 11

Which of the following are responsible for everyday workplace health and safety?

A) employers
B) employers and government
C) everyone
D) federal and provincial governments

Question 12

According to the Canadian Centre for Occupational Health and Safety (CCOHS), how many injuries are reported each year?

A) 50,000
B) 500,000
C) 1,000,000
D) 1,500,000

Question 13

Which of the following represents a way to protect yourself against consequential losses?

A) business interruption insurance
B) in-home business policy
C) business owner's policy
D) homeowner's policy endorsement

Question 14

For which of the following should fidelity bonds be purchased?

A) general contractors
B) shareholders and partners
C) employees who handle cash
D) directors of an incorporated company

Question 15

According to the author, what occurs in "sweethearting"?

A) counterfeit money laundering
B) manipulation of timecard data
C) fraudulent refunds
D) discounts for friends and family

Question 16

Which of the following types of insurance provides coverage against claims from employees for issues such as wrongful discharge and discrimination?

A) consequential liability
B) employment practices liability
C) employee liability
D) owner's liability

Question 17

Which type of insurance provides coverage against claims from clients who suffer damages as a result of your services?

A) consequential liability
B) employment practices liability
C) public liability insurance
D) malpractice insurance

Question 18

Which statement describes due diligence in the context of health and safety in the workplace?

A) it does not require an employer to implement a plan to identify possible workplace hazards
B) it is the level of care an employer would be expected to demonstrate to prevent workplace injuries
C) it is the level of caution an employee would reasonably be expected to exercise
D) it implies that employees must take a major responsibility for workplace safety

Question 19

Which of the following is a resource for advice on inventions?

A) Canada Business website and service centres
B) Canadian Centre for Occupational Health and Safety
C) Health Canada
D) Canadian Innovation Centre

Question 20

Which of the following requirements applies to small businesses?

A) In all cases, you are legally required to form a joint health and safety committee.
B) You must provide information on hazardous materials in the workplace.
C) Your lawyer cannot be part of your occupational health and safety advisory board due to conflict of interest legislation.
D) Your lawyer can be a part of the OHSC.

Question 21

What is Action Step 43?

A) obtain all the required insurance
B) calculate your insurance needs and costs
C) register your OHSC
D) set up anti-theft policies and procedures

Question 22

Which of the following typically is NOT covered with business insurance?

A) everyday business risks
B) continuing expenses after a fire
C) loss or damage of property
D) personal injury

Question 23

According to the textbook, which of the following applies if you operate a home-based business?

A) Your basic homeowner's insurance will not cover your business needs.
B) Malpractice insurance will protect you against bad management decisions.
C) You will not normally require public liability insurance.
D) Your homeowner's insurance will cover all your business needs.

Question 24

Which type of insurance protects the business against claims from clients who suffer damages as a result of services that you, the owner, perform?

A) key man
B) product liability
C) malpractice
D) public liability

Question 25

According to the author, which of the following can be one of the "nastiest" surprises for an entrepreneur?

A) the cost of insurance
B) employee dishonesty
C) the required MSDS
D) the cost of legal fees

Question 26

According to the text, which of the following is relevant to small business?

A) You should not start your business until you have checked out your health and safety responsibilities with Health Canada.
B) Theft and fraud are major issues for small firms.
C) If you practise due diligence, you can eliminate theft and fraud.
D) An advisory board will not help you to reduce the impact of costly mistakes.

Question 27

Which of the following is required by law in Canadian workplaces?

A) MSDS
B) EPL insurance
C) succession plan
D) fidelity bond

Question 28

As described in the opening vignette, which of the following should Patty Fisher have had?

A) a business interruption plan
B) a Plan B
C) a succession plan
D) a business plan

Question 29

According to the author, which of the following is most likely to be used as a last resort in reducing risk?

A) fidelity insurance
B) Plan B
C) insurance
D) business plan

Question 30

How often is a worker injured at work in Canada?

A) every 5 seconds
B) every 9 seconds
C) every 13 seconds
D) every 18 seconds

Question 31

Which level of government oversees WHMIS?

A) municipal
B) provincial/territorial
C) federal
D) the courts

Question 32

According to the author, how many times should an employee's application, résumé, and references be verified to minimize your risk for theft and fraud?

A) one
B) two
C) three
D) four

Question 33

If you run a home-based business, in most cases your homeowner's insurance will cover your business equipment and materials.

Question 34

Loss of income resulting from an electrical blackout can be covered by business insurance.

Question 35

You can never be insured for bad management decisions and that is why you need a Plan B.

Question 36

For most small businesses, federal law governs due diligence.

Question 37

In most cases, occupational health and safety are the responsibility of the jurisdictional Workers' Compensation Board.

Question 38

You can protect yourself against consequential or indirect losses by obtaining business interruption insurance.

Question 39

A basic guiding principle is that if a worker is injured in the course of performing work for the employer, the employer may be held responsible.

Question 40

With a proper business plan, you can eliminate risk.

Question 41

There are four basic levels of occupational health and safety legislation.

Question 42

Workplace health and safety are the sole responsibility of the employer.

Question 43

A completion bond provides insurance coverage to ensure that work on a contract is completed as agreed.

Question 44

A Joint Health and Safety Committee (JHSC) is a group consisting of labour and management representatives who meet regularly to deal with health and safety issues.

Question 45

Many financial institutions will require you to have life and disability insurance as a condition of your business loan.

Question 46

By federal law, a Joint Health and Safety Committee is required for all businesses operating in Canada.

Question 47

According to law, all businesses operating in Canada must provide information on hazardous materials.

Question 48

As an employer, you are responsible only for those situations addressed in the occupational health and safety legislation.

Question 49

Due diligence requires businesses to implement a plan to identify possible workplace hazards.

Question 50

A fidelity bond is a type of insurance that protects shareholders against legal action.

Question 51

If you develop strict guidelines and procedures, you can eliminate theft and fraud.

Question 52

Employee dishonesty is not a major issue with smaller firms.

Question 53

A business can be liable for injuries caused by employees operating their own vehicles while on company business.

Question 54

Enforcement of health and safety is done by the RCMP.

Question 55

A "Plan B" should always be prepared in case you don't have any customers.

Question 56

You can protect yourself against consequential losses by obtaining business interruption insurance.

Question 57

Insurance is the only option to reduce risk.

Question 58

Being proactive means that you should prepare at least one Plan B.

Question 59

CCOHS stands for the Canadian Centre for Occupational Health and Safety.

Question 60

Each province has a health and safety ministry or Workers' Compensation Board, which normally governs health and safety issues.

Question 61

Completion bonds protect an employer against employee dishonesty.

Question 62

Key employee insurance covers against claims from employees for employment practices:sexual harassment, wrongful discharge, discrimination, breach of contract, libel.

Question 63

Insurance coverage to ensure that work on a contract is completed as agreed is known as ____________ ______________.

Question 64

You can protect yourself from a dishonest bookkeeper by purchasing a(n) __________ ________.

Question 65

A group consisting of labour and management representatives who meet on a regular basis to deal with health and safety issues is known as a ___________________ _____________________ ____ ___________________ _________________________.

Question 66

Insurance that covers injury to the public, such as customer use or misuse of products, is known as ____________________ ___________________.

Question 67

An alternative strategy for bailing a business out of a tight spot created by some unforeseen or unfortunate situation is called a __________ __________.

Question 68

In a small business, health and safety is the responsibility of _________________.

Question 69

The acronym for the comprehensive national plan for providing information on the safe use of hazardous materials used in Canadian workplaces is _________.

Question 70

Insurance is only one of the options to reduce ________________.

Question 71

List 10 business start-up concerns that could help you to reduce or eliminate potential surprises.

Question 72

Briefly explain the following types of business insurance:
consequential loss insurance
public liability insurance
business interruption insurance
errors and omissions insurance
employment practices liability insurance
fidelity bonding
completion bonding

Question 73

As a small business, are you required to have a joint health and safety committee? Briefly explain your

Question 74

With respect to health and safety in the workplace, briefly explain the meaning and purpose of the Workplace Hazardous Materials Information System (WHMIS).

Question 75

Explain the meaning of the term due diligence in relation to health and safety issues.

Question 76

Briefly describe the differences between employment practices liability insurance, key employee insurance, and product liability insurance.

Question 77

If you are planning to operate your business out of your home, you can choose from three basic types of home protection insurance policies. Briefly explain each of these types of policies.