In designing an addition to his successful nursing home, Steve realized that water sprinklers and smoke detectors were now required by state regulations. His existing structure already had sprinklers and detectors because he felt that this was an effective strategy to:
A) self-insure against the risk of fire loss.
B) minimize the speculative risk of a fire.
C) reduce the risk of a fire loss.
D) avoid the risk of a fire loss.

Question

Quizplus · Accepted Answer

Steve felt that having sprinklers and detectors was an effective strategy to reduce the risk of a fire loss in his nursing home. With the new state regulations requiring them, it shows that the state also recognizes the importance of these safety measures in reducing the risk of fire. Option A is incorrect because self-insuring only involves taking on the financial risk of a loss, but does not mitigate or reduce the risk of a loss. Option B is incorrect because having sprinklers and detectors is not speculative but rather a proven risk reduction strategy. Option D is incorrect because avoiding the risk of a fire loss would mean not having the building at all, which is not the case here.

In Designing an Addition to His Successful Nursing Home, Steve