Chapter 23: Risk Management quiz (Passed!)

Of the following risk management strategies, the one that aims at minimizing both the severity and the likelihood of loss is correct answers reduction Insurance is a method of correct answers risk outsourcing How does disclosure manage risk? correct answers A. It deflects and reduces risk by preventing others from claiming they were misled. Which of the following statements about a company procedures manual as a risk management device is true? correct answers It can be a guide to compliance with the law. In what sense is the use of standardized forms a risk management procedure? correct answers It reduces the risk of committing an unauthorized practice of law. Keeping thorough records of every transaction is not only a risk management technique, it is correct answers legal requirement Which of the following communications records must (as opposed to should) be kept? correct answers Copies of required communications to principals. The standard E & O policy covers damages resulting from correct answers negligence, error or omission in carrying out professional services. Which of the following is a common risk relating to the agency relationship? correct answers Failing to inform and disclose properly. Even after giving buyer and seller the required information about property condition disclosures, the licensee may still be subject to legal action for correct answers failing to disclose known adverse facts. In performing a comparative market analysis, a licensee must be careful to correct answers avoid creating a false impression that the licensee is a certified appraiser. In fulfilling a listing agreement, one of the major risk areas is correct answers exceeding the authority of the agreement. A simple way of reducing the risk of committing an error or omission in the contracting process is correct answers Use a checklist of all items, contingencies, dates and responsibilities that must be met. Regarding contracts and forms, correct answers the principals may make changes as long as they sign or initial each change.