CPCU 551 - Chapter 1 Exam Questions and Answers Solved Correctly
Exposure avoidance - Answers abandons or avoids the loss situation, thus eliminating all possibility of
loss
Proactive avoidance - Answers occurs when a firm avoids ever incurring a particular loss exposure
Abandonment - Answers occurs when a firm eliminates an existing loss exposure
Loss prevention - Answers reduces loss frequency
Loss reduction - Answers reduces loss severity
Separation - Answers disperses resources over two or more locations
Duplication - Answers creates copies or spares of important items and stores them at separate locations
Diversification - Answers spreads loss exposures over several projects, products, markets, and/or regions
Retention - Answers generates funds from within the firm to pay for losses; compare transfer
Transfer - Answers generates funds from outside the firm to pay for losses, through either insurance or
noninsurance transfer; compare retention
Burglary - Answers theft with forcible entry
Robbery - Answers theft by threat or use of bodily violence
Employee theft - Answers theft committed by an employee against his employer.
Commercial property insurance - Answers covers property loss exposures for businesses and nonprofit
organizations
Multiline policy - Answers covers two or more lines of business
Package policy - Answers another term for multiline policy
Monoline policy - Answers covers one line of business
Standard form - Answers developed by the Insurance Services Office, Inc., the American Association of
Insurance Services, or another insurance advisory organization
Nonstandard form - Answers developed independently by insurers or brokers
Commercial package policy (CPP) - Answers a multiline policy with two or more ISO commercial lines
coverage parts
CPP - Answers abbreviates commercial package policy
Exposure avoidance - Answers abandons or avoids the loss situation, thus eliminating all possibility of
loss
Proactive avoidance - Answers occurs when a firm avoids ever incurring a particular loss exposure
Abandonment - Answers occurs when a firm eliminates an existing loss exposure
Loss prevention - Answers reduces loss frequency
Loss reduction - Answers reduces loss severity
Separation - Answers disperses resources over two or more locations
Duplication - Answers creates copies or spares of important items and stores them at separate locations
Diversification - Answers spreads loss exposures over several projects, products, markets, and/or regions
Retention - Answers generates funds from within the firm to pay for losses; compare transfer
Transfer - Answers generates funds from outside the firm to pay for losses, through either insurance or
noninsurance transfer; compare retention
Burglary - Answers theft with forcible entry
Robbery - Answers theft by threat or use of bodily violence
Employee theft - Answers theft committed by an employee against his employer.
Commercial property insurance - Answers covers property loss exposures for businesses and nonprofit
organizations
Multiline policy - Answers covers two or more lines of business
Package policy - Answers another term for multiline policy
Monoline policy - Answers covers one line of business
Standard form - Answers developed by the Insurance Services Office, Inc., the American Association of
Insurance Services, or another insurance advisory organization
Nonstandard form - Answers developed independently by insurers or brokers
Commercial package policy (CPP) - Answers a multiline policy with two or more ISO commercial lines
coverage parts
CPP - Answers abbreviates commercial package policy
