ARM 402 UPDATED QUESTIONS AND ANSWERS
SET A+
✔✔Driver behavior can be monitored by using which one of the following technological
advances in fleet safety?
A. Police radar equipment
B. Cell phones
C. Vehicle inspection reports
D. Onboard computers - ✔✔D
✔✔One way to control the loss exposures associated with the vehicle component in a
fleet safety system is through
A. Proper loading.
B. Vehicle selection.
C. Operator orientation.
D. Operator supervision. - ✔✔B
✔✔Which one of the following is a motor fleet vehicle system component that can likely
lead to losses?
A. Contracts
B. Routes
C. Financing
D. Premises - ✔✔B
✔✔Which one of the following is a consequence that would likely result from legal
liability arising from a breach of contract?
A. Indirect loss
B. Specific performance
C. Ordered restriction
D. Sanction - ✔✔B
✔✔Punitive damages are intended to
A. Punish the defendant.
,B. Compensate the defendant for medical expenses.
C. Compensate the injured party for pain and suffering.
D. Punish the plaintiff. - ✔✔A
✔✔Loss reduction of statutory liability
A. Uses techniques similar to those for contractual liability.
B. Often uses the assumption-of-risk defense.
C. Is generally ineffective.
D. Relies on valuation provisions. - ✔✔C
✔✔A retail gun shop loaned a gun to a customer with a history of armed robbery for a
trial period. A bank teller is injured when the gun is used in a bank robbery. The gun
shop owner might be liable based on
A. Vicarious liability.
B. Assault and battery.
C. Res ipsa loquitur.
D. Negligence. - ✔✔D
✔✔A contract whose terms and intentions are explicitly stated defines
A. An implied contract.
B. A void contract.
C. A valid contract.
D. An express contract. - ✔✔D
✔✔One of the requirements for a contract to be enforceable is
A. Imposed responsibility.
B. Written confirmation.
C. Legal purpose.
D. Reciprocity. - ✔✔C
✔✔Hazard control of the loss exposures of premises and operations, products, and
completed operations is a key aspect of risk control for
A. Contractual liability.
B. Statutory liability.
C. Vicarious liability.
D. Tort liability. - ✔✔D
✔✔The liability loss exposure that exists when an organization is legally responsible for
bodily injury or property damage caused by an accident that occurs on an organization's
owned, leased, or rented property is
A. Operations liability.
B. Premises and operations liability.
C. Property liability.
D. Professional liability. - ✔✔B
, ✔✔Which one of the following most accurately describes the value of precedent in the
common law system?
A. Precedents may influence a magistrate's decision, but ultimately the outcome of a
case will be determined by the opinion of appointed experts.
B. Precedent strictly defines the outcome of most cases, and the analyses of senior
courts is binding on lower courts.
C. Precedent has little utility in the common law system, which instead relies heavily on
a detailed code of statutes.
D. Precedents are guides that judges use to aid analysis of the facts in particular cases,
but they are not rigid frameworks for all decisions. - ✔✔D
✔✔Few defenses are available to an organization to reduce the fine or penalty it faces
when it violates
A. Vicarious liability laws.
B. Legal interests by torts.
C. Products liability laws.
D. Statutes. - ✔✔D
✔✔The lease for a tenant's occupancy of an office space states that the tenant will
maintain the property in reasonable condition. The tenant fails to clear ice and snow
from the property and a passerby falls and is injured. On what basis might the tenant
most likely be liable for the passerby's injuries?
A. Strict liability
B. Negligence
C. Breach of contract
D. Tort - ✔✔C
✔✔One example of an indirect cost incurred as a result of an underlying liability loss is
A. Verdicts in lawsuits.
B. Expenses of complying with an injunction.
C. Loss of reputation.
D. Legal expenses. - ✔✔C
✔✔Danforth Grocery Store specializes in fresh produce and is open 24 hours year
round. The store has contracts with suppliers to deliver produce and foods by 5:00 AM
daily, so the parking area at the rear of the store is congested from 4:30 AM to 5:30 AM.
Customer traffic is heaviest from 7:00 AM to 9:00 AM and again from 3:00 PM to 6:00
PM. The store has had six slip-and-fall claims from customers in the past year. To which
one of the following types of liability loss is Danforth Grocery Store most exposed?
A. Premises liability
B. Automobile liability
C. Completed operations liability
D. Professional liability - ✔✔A
SET A+
✔✔Driver behavior can be monitored by using which one of the following technological
advances in fleet safety?
A. Police radar equipment
B. Cell phones
C. Vehicle inspection reports
D. Onboard computers - ✔✔D
✔✔One way to control the loss exposures associated with the vehicle component in a
fleet safety system is through
A. Proper loading.
B. Vehicle selection.
C. Operator orientation.
D. Operator supervision. - ✔✔B
✔✔Which one of the following is a motor fleet vehicle system component that can likely
lead to losses?
A. Contracts
B. Routes
C. Financing
D. Premises - ✔✔B
✔✔Which one of the following is a consequence that would likely result from legal
liability arising from a breach of contract?
A. Indirect loss
B. Specific performance
C. Ordered restriction
D. Sanction - ✔✔B
✔✔Punitive damages are intended to
A. Punish the defendant.
,B. Compensate the defendant for medical expenses.
C. Compensate the injured party for pain and suffering.
D. Punish the plaintiff. - ✔✔A
✔✔Loss reduction of statutory liability
A. Uses techniques similar to those for contractual liability.
B. Often uses the assumption-of-risk defense.
C. Is generally ineffective.
D. Relies on valuation provisions. - ✔✔C
✔✔A retail gun shop loaned a gun to a customer with a history of armed robbery for a
trial period. A bank teller is injured when the gun is used in a bank robbery. The gun
shop owner might be liable based on
A. Vicarious liability.
B. Assault and battery.
C. Res ipsa loquitur.
D. Negligence. - ✔✔D
✔✔A contract whose terms and intentions are explicitly stated defines
A. An implied contract.
B. A void contract.
C. A valid contract.
D. An express contract. - ✔✔D
✔✔One of the requirements for a contract to be enforceable is
A. Imposed responsibility.
B. Written confirmation.
C. Legal purpose.
D. Reciprocity. - ✔✔C
✔✔Hazard control of the loss exposures of premises and operations, products, and
completed operations is a key aspect of risk control for
A. Contractual liability.
B. Statutory liability.
C. Vicarious liability.
D. Tort liability. - ✔✔D
✔✔The liability loss exposure that exists when an organization is legally responsible for
bodily injury or property damage caused by an accident that occurs on an organization's
owned, leased, or rented property is
A. Operations liability.
B. Premises and operations liability.
C. Property liability.
D. Professional liability. - ✔✔B
, ✔✔Which one of the following most accurately describes the value of precedent in the
common law system?
A. Precedents may influence a magistrate's decision, but ultimately the outcome of a
case will be determined by the opinion of appointed experts.
B. Precedent strictly defines the outcome of most cases, and the analyses of senior
courts is binding on lower courts.
C. Precedent has little utility in the common law system, which instead relies heavily on
a detailed code of statutes.
D. Precedents are guides that judges use to aid analysis of the facts in particular cases,
but they are not rigid frameworks for all decisions. - ✔✔D
✔✔Few defenses are available to an organization to reduce the fine or penalty it faces
when it violates
A. Vicarious liability laws.
B. Legal interests by torts.
C. Products liability laws.
D. Statutes. - ✔✔D
✔✔The lease for a tenant's occupancy of an office space states that the tenant will
maintain the property in reasonable condition. The tenant fails to clear ice and snow
from the property and a passerby falls and is injured. On what basis might the tenant
most likely be liable for the passerby's injuries?
A. Strict liability
B. Negligence
C. Breach of contract
D. Tort - ✔✔C
✔✔One example of an indirect cost incurred as a result of an underlying liability loss is
A. Verdicts in lawsuits.
B. Expenses of complying with an injunction.
C. Loss of reputation.
D. Legal expenses. - ✔✔C
✔✔Danforth Grocery Store specializes in fresh produce and is open 24 hours year
round. The store has contracts with suppliers to deliver produce and foods by 5:00 AM
daily, so the parking area at the rear of the store is congested from 4:30 AM to 5:30 AM.
Customer traffic is heaviest from 7:00 AM to 9:00 AM and again from 3:00 PM to 6:00
PM. The store has had six slip-and-fall claims from customers in the past year. To which
one of the following types of liability loss is Danforth Grocery Store most exposed?
A. Premises liability
B. Automobile liability
C. Completed operations liability
D. Professional liability - ✔✔A
