AU 62: CHAPTER 1 QUIZ UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Question:
1. Can a business experience a liability loss even if it is
found not to be legally liable for a civil wrong?
Answer:
Even if found not legally liable, a business can have a liability loss resulting from
the costs of defending itself against a liability lawsuit.
Question:
2. A building lease, or lease of premises, may obligate the
tenant to indemnify the landlord for any liability claims
made against the landlord by any person injured on the
tenant's leased premises. What is the tenant, in this case,
agreeing by contract to pay?
Answer:
In this case, the tenant is agreeing by contract to pay claims for which the tenant
would not otherwise have been legally liable.
Question:
3. A commercial truck driver substantially deviates from his
assigned route to visit a friend. Along the way, he loses
control of the wheel and causes an accident that injures
another driver. Is the truck driver's employer liable for this
accident?
Answer:
No. Because the driver substantially deviated from his instruction under the scope
of employment, his employer would likely not be liable.
Question:
4. A customer was shopping at a clothing store when a coat
rack fell on her, breaking several bones in her arm. Under
which category of commercial liability loss exposure
does her injury fall for insurance purposes?
Answer:
Premises and Operations Liability.
This exposure can arise from bodily injury caused by an accident that occurs on
an organization's premises.
, Question:
5. Which machine shop requirement is an example of loss
prevention?
Answer:
Safety glasses being worn by employees.
Question:
6. Which machine shop requirement is an example of loss
reduction?
Answer:
The installation of smoke detectors.
Question:
7. What is the role of claims management in a risk control
program?
Answer:
The effective management of an incident and any resulting claims, which can
reduce financial losses.
Question:
8. A software tech company, has a fleet of cars for its
employees to use for business purposes. The tech
company has an insurance program with its insurer,
Malvern Insurance, that includes general liability, workers
compensation and auto liability coverages. If an
employee were to negligently hit a pedestrian while
driving one of the company cars to visit a customer,
which one of the following would best describe the
coverages applicable to in this situation?
Answer:
The insurer will respond under the automobile liability coverage.
Question:
9. While working for AutoFix, a car repair service, Lisa
completed a brake repair job on a customer's car. A week
later, the customer was involved in an accident due to
brake failure. Which one of the following types of liability
is AutoFix potentially facing in this situation?
Answer:
Completed operations liability.
QUESTIONS AND CORRECT ANSWERS
Question:
1. Can a business experience a liability loss even if it is
found not to be legally liable for a civil wrong?
Answer:
Even if found not legally liable, a business can have a liability loss resulting from
the costs of defending itself against a liability lawsuit.
Question:
2. A building lease, or lease of premises, may obligate the
tenant to indemnify the landlord for any liability claims
made against the landlord by any person injured on the
tenant's leased premises. What is the tenant, in this case,
agreeing by contract to pay?
Answer:
In this case, the tenant is agreeing by contract to pay claims for which the tenant
would not otherwise have been legally liable.
Question:
3. A commercial truck driver substantially deviates from his
assigned route to visit a friend. Along the way, he loses
control of the wheel and causes an accident that injures
another driver. Is the truck driver's employer liable for this
accident?
Answer:
No. Because the driver substantially deviated from his instruction under the scope
of employment, his employer would likely not be liable.
Question:
4. A customer was shopping at a clothing store when a coat
rack fell on her, breaking several bones in her arm. Under
which category of commercial liability loss exposure
does her injury fall for insurance purposes?
Answer:
Premises and Operations Liability.
This exposure can arise from bodily injury caused by an accident that occurs on
an organization's premises.
, Question:
5. Which machine shop requirement is an example of loss
prevention?
Answer:
Safety glasses being worn by employees.
Question:
6. Which machine shop requirement is an example of loss
reduction?
Answer:
The installation of smoke detectors.
Question:
7. What is the role of claims management in a risk control
program?
Answer:
The effective management of an incident and any resulting claims, which can
reduce financial losses.
Question:
8. A software tech company, has a fleet of cars for its
employees to use for business purposes. The tech
company has an insurance program with its insurer,
Malvern Insurance, that includes general liability, workers
compensation and auto liability coverages. If an
employee were to negligently hit a pedestrian while
driving one of the company cars to visit a customer,
which one of the following would best describe the
coverages applicable to in this situation?
Answer:
The insurer will respond under the automobile liability coverage.
Question:
9. While working for AutoFix, a car repair service, Lisa
completed a brake repair job on a customer's car. A week
later, the customer was involved in an accident due to
brake failure. Which one of the following types of liability
is AutoFix potentially facing in this situation?
Answer:
Completed operations liability.
