Risk Management - CMCA Test
Preparation
TRUE correct answersTRUE or FALSE
Risk management is the process of making and carrying out decisions that
will minimize the adverse effects of accidental losses upon the community
association.
c. income exposure to loss correct answersWhat type of Exposure to Loss
for a community association is characterized by net losses that may
involve a reduction in income or an increase in operating expenses or
both?
a. property exposure to loss
b. liability exposure to loss
c. income exposure to loss
d. personnel exposure to loss
d. personnel exposure to loss correct answersWhat type of Exposure to
Loss for a community association is characterized by claims by
employees regarding discrimination in hiring or firing, harassment, or
other allegation.
e. property exposure to loss
f. liability exposure to loss
g. income exposure to loss
h. personnel exposure to loss
b. liability exposure to loss correct answersWhat type of Exposure to Loss for
a community association is characterized by damage to non-association
property or to a person, arising when a person or entity threatens or actually
brings a legal claim against the community association, its members, or
others whom it must indemnify by contract?
i. property exposure to loss
j. liability exposure to loss
k. income exposure to loss
l. personnel exposure to loss
m.property exposure to loss correct answersWhat type of Exposure to
Loss for a community association is characterized by tangible losses to
association property such
,as buildings and their contents or Intangible, such as the loss of information
or someone hacking into the community website.
a. property exposure to loss
b. liability exposure to loss
c. income exposure to loss
d. personnel exposure to loss
TRUE
Surveys and questionnaires
Financial Reports - Asset entries detail property exposures and liability
entries explain continuing obligations.
Records, files and documents
Flowcharts detail association paper flow and
critical tasks. Personal Inspections
Hire experts, including Reserve Specialists,
insurance risk managers and qualified
general contractors correct answersTRUE OR
FALSE:
The following resources can help identify exposures
to loss: Surveys and questionnaires
Financial Reports
Records, files and
documents Flowcharts
Personal
Inspections
Experts
b. Frequency correct answersTests of Significance: Loss refers to
the number of times a financially adverse event occurs or is expected to
occur.
e. Severity
f. Frequency
g.Severity correct answersTests of Significance: Loss refers to
the expected dollar loss when a financially adverse event occurs.
h. Severity
i. Frequency
1. c. Loss reduction
2. b. Loss prevention
3. d. Segregation of exposures
4. e. Contractual transfer
, 5.a. Exposure Avoidance correct answersRisk Control is a one way to treat
the primary exposures to loss.
Match the terms:
1. Minimize the severity of the loss if something does happen.
2. Take steps to reduce the likelihood of a potential loss.
3. Separating and duplicating activities and personnel performing them.
4. Moving the legal and fiscal responsibility to another party.
5. Eliminating the chance of loss by stopping or never starting an activity.
a. Exposure Avoidance
b. Loss prevention
c. Loss reduction
d. Segregation of exposures
e. Contractual transfer
1. (b) Income
2. (d) Liability
3. (c) Personnel
4. (a) Property correct answersMatch the Types of Insurance Coverages:
1. Covers losses from a reduction in revenue and/or an increase in expense
2.Covers damage to non-association property or to a person when a
legal claim is brought against the association
3. Covers losses from claims of an employee against the association
4. Covers losses to tangible or intangible community association
property
a. Property
b. Income
c. Personnel
d. Liability
TRUE correct answersTRUE OR FALSE
Liability insurance helps with situations in which a civil legal claim is brought
against the association because of a legal wrong it is alleged to have directly
committed or for which it is supposedly responsible.
1. (a) Commercial General Liability (CGL)
2. (c) Commercial Umbrella
3.(b) Directors & Officers insurance (D&O) correct answersMatch the
three types of Liability Insurance Coverages and Endorsements:
1. Covers property damage, bodily injury, medical payments, personal
injury, advertising injury. Hired and non-owned automobile liability covers
claims arising out of
Preparation
TRUE correct answersTRUE or FALSE
Risk management is the process of making and carrying out decisions that
will minimize the adverse effects of accidental losses upon the community
association.
c. income exposure to loss correct answersWhat type of Exposure to Loss
for a community association is characterized by net losses that may
involve a reduction in income or an increase in operating expenses or
both?
a. property exposure to loss
b. liability exposure to loss
c. income exposure to loss
d. personnel exposure to loss
d. personnel exposure to loss correct answersWhat type of Exposure to
Loss for a community association is characterized by claims by
employees regarding discrimination in hiring or firing, harassment, or
other allegation.
e. property exposure to loss
f. liability exposure to loss
g. income exposure to loss
h. personnel exposure to loss
b. liability exposure to loss correct answersWhat type of Exposure to Loss for
a community association is characterized by damage to non-association
property or to a person, arising when a person or entity threatens or actually
brings a legal claim against the community association, its members, or
others whom it must indemnify by contract?
i. property exposure to loss
j. liability exposure to loss
k. income exposure to loss
l. personnel exposure to loss
m.property exposure to loss correct answersWhat type of Exposure to
Loss for a community association is characterized by tangible losses to
association property such
,as buildings and their contents or Intangible, such as the loss of information
or someone hacking into the community website.
a. property exposure to loss
b. liability exposure to loss
c. income exposure to loss
d. personnel exposure to loss
TRUE
Surveys and questionnaires
Financial Reports - Asset entries detail property exposures and liability
entries explain continuing obligations.
Records, files and documents
Flowcharts detail association paper flow and
critical tasks. Personal Inspections
Hire experts, including Reserve Specialists,
insurance risk managers and qualified
general contractors correct answersTRUE OR
FALSE:
The following resources can help identify exposures
to loss: Surveys and questionnaires
Financial Reports
Records, files and
documents Flowcharts
Personal
Inspections
Experts
b. Frequency correct answersTests of Significance: Loss refers to
the number of times a financially adverse event occurs or is expected to
occur.
e. Severity
f. Frequency
g.Severity correct answersTests of Significance: Loss refers to
the expected dollar loss when a financially adverse event occurs.
h. Severity
i. Frequency
1. c. Loss reduction
2. b. Loss prevention
3. d. Segregation of exposures
4. e. Contractual transfer
, 5.a. Exposure Avoidance correct answersRisk Control is a one way to treat
the primary exposures to loss.
Match the terms:
1. Minimize the severity of the loss if something does happen.
2. Take steps to reduce the likelihood of a potential loss.
3. Separating and duplicating activities and personnel performing them.
4. Moving the legal and fiscal responsibility to another party.
5. Eliminating the chance of loss by stopping or never starting an activity.
a. Exposure Avoidance
b. Loss prevention
c. Loss reduction
d. Segregation of exposures
e. Contractual transfer
1. (b) Income
2. (d) Liability
3. (c) Personnel
4. (a) Property correct answersMatch the Types of Insurance Coverages:
1. Covers losses from a reduction in revenue and/or an increase in expense
2.Covers damage to non-association property or to a person when a
legal claim is brought against the association
3. Covers losses from claims of an employee against the association
4. Covers losses to tangible or intangible community association
property
a. Property
b. Income
c. Personnel
d. Liability
TRUE correct answersTRUE OR FALSE
Liability insurance helps with situations in which a civil legal claim is brought
against the association because of a legal wrong it is alleged to have directly
committed or for which it is supposedly responsible.
1. (a) Commercial General Liability (CGL)
2. (c) Commercial Umbrella
3.(b) Directors & Officers insurance (D&O) correct answersMatch the
three types of Liability Insurance Coverages and Endorsements:
1. Covers property damage, bodily injury, medical payments, personal
injury, advertising injury. Hired and non-owned automobile liability covers
claims arising out of
