AU 62 EXPLORE 115 ESSENTIAL QUESTIONS AND ANSWERS

AU 62 EXPLORE 115 ESSENTIAL QUESTIONS AND ANSWERS which one of the following is a loss prevention technique? - Answer-indicators on glass doors to warn of potential breakage an organization's liability loss control activities can usually be classified as either loss prevention activities or loss reduction activities. which one of the following is best described as a loss reduction activity? - Answer-installation of smoke detectors in warehouses which one of the following statements concerning commercial liability risk control practices is most accurate? - Answer-employees should be given a sense of ownership in the liability risk control program because human behavior is the cause for the vast majority of accidents which one of the following statements about considerations that need to be evaluated in the development of risk control techniques is true? - Answer-legal requirements must be considered in developing all risk control techniques loss reduction techniques are intended to reduce the - Answer-severity of losses davis wholesale's installation of pressure-pad activated warning alerts at corners and entrance/exit areas of a warehouse that utilizes forklifts is an example of what type of risk control technique? - Answer-loss prevention which one of the following is a risk control technique that reduces the severity of a particular loss? - Answer-loss reduction Lee construction company is building a manufacturing plant. as the plan resides next to a residential neighborhood, the company places barriers around the construction site and employs round-the-clock security patrols to prevent unauthorized persons from entering the construction site. the risk control technique employed by the construction company is - Answer-loss prevention the alpha corporation recently explored several new business opportunities. one of these opportunities involved the use of dangerous chemicals that had the potential to seriously injure employees. despite the potential for profit, the corporation decided not to undertake this opportunity because of the liability exposure. this action is an example of - Answer-avoidance which one of the following statements regarding the extent of damages in liability claims is true? - Answer-a claimant in a bodily injury or property damage liability claim has a duty to mitigate loss after an accident. the united states common law system requires the amount of damages awarded to a claimant in a liability claim to compensate the claimant for loss incurred as of the - Answer-trial date under which one of the following types of insurance policies are the insurer's payments for defense costs and supplemental payments typically applied to reduce the policy limits? - Answer-pollution liability Generally, in a liability claim, the burden of proof regarding what bodily injury or property damage losses were proximately caused by the insured belongs to the - Answer-claimant regarding the valuation and settlement of liability claims, which one of the following statements is true? - Answer-with liability claims, both the claimant and the insurer have an incentive to reach an out of court settlement because of the uncertainty, time, and expense involved in a formal trial if a liability claim goes to trial, although the policy limits restrict the insurer's liability, the jury and judge are not bound to confine an award to the amount of such policy limits. if the court awards a judgement that exceeds policy limits, which one of the following parties is responsible for paying the excess award? - Answer-the insured which one of the following would be considered supplementary payments under liability insurance policies? - Answer-cost of surety bonds Company T has a liability policy with Insurer A with a $1 million policy limit. Company T was found liable for a $700,000 judgment. Defense costs amounted to $400,000. Assuming the insurer's payments for defense costs are applied to reduce the policy limit, how much would Insurer A pay toward the $700,000 judgment? - Answer-600,000 Shelton manufacturing has a pollution liability policy with a $1 million policy limit. under this policy, defense costs and supplementary payments reduce the policy limits. after spending 250,000 in defense costs, shelton manufacturing is found liable for a 900000 judgement under the policy. how much of the judgement will be paid by shelton manufacturing's insurer? - Answer-750000 For general liability insurance purposes, in addition to salaries and wages, the ISO Commercial Lines Manual's definition of "payroll" includes which one of the following? - Answer-Overtime, holiday, and vacation pay. Lawyers professional liability underwriting considerations include which one of the following? - Answer-The size of the lawyer's professional liability insurance deductible is a function of the number of lawyers in the firm and areas of practice. A patient at a hospital suffered brain damage and permanent paralysis after a nurse employed by the hospital administered a medication at one hundred times the prescribed strength. The patient filed a negligence suit for damages against both the individual nurse and the hospital. Which one of the following statements is correct regarding a basic rule governing negligence actions that would apply to the hospital in this situation? - Answer-The hospital can be held vicariously liable for the negligence of a nurse employed by the hospital. The Business Auto Declarations and Coverage Form would be appropriate for which one of the following businesses? - Answer-A heating and air-conditioning contractor Joe's Cleaning Service is having a very good year, with close to a 30 percent increase in sales. Joe is wondering if this growth will affect his general liability premium at the end of the policy period. Which one of the following sections of the general liability coverage form will provide this information? - Answer-Declarations Form Robin is a large account underwriter with ABC Insurance Company. She is trying to underwrite a complex manufacturing account. Twelve different products are produced at the factory using sixteen production lines. Raw materials are delivered at four receiving points, there are two packaging areas, and five storage facilities for finished goods. To better understand the production process, Robin drew a diagram showing the movement of raw materials, goods in process, and finished goods through the factory. This diagram, which helped Robin identify various loss exposures, is called a - Answer-Flow chart.