CPCU 500 - Chapter 3 and 4 Exam Questions
and Answers with Verified Solutions | Latest
Updated 2026
Explain How proactive and proactive - seeks to avoid a loss exposure
reactive before it
avoidance differ in reducing loss exists, ex. choosing not to engage in
frequency of a loss exposure activity
reactive - seeks to eliminate exp that
already exists,
but does not eliminate exp from past
activities
Describe the purpose of the -preloss- applied before a loss occurs.
following loss reduction measures Reduce
in amount of property damage and number of
controlling losses: people injured from single event
-Pre-loss measures -posts - applied after loss. Focus on
-post-loss measures emergency
procedures, salvage ops, rehab activities,
public
relations, or legal defense to halt the
spread or to
count the effects of a loss
, Describe the purpose of a disaster its to ensure that critical resources are
recovery plan available to
facilitate an orgs continuity of operations in
an
emergency.
-typically includes back up procedures,
emergency
response, and post-disaster recovery
Identify circumstances in which -sep- appropriate if the org can operate
each with only
of the following techniques would a portion of the separated assets or
be an effective choice for loss locations left
reduction: intact
-separation -dup - approp. if antire asset or activity is
-duplication so
-diversification important that the consequence of its loss
justifies
the expense and time to duplicate it
-divers- more commonly applied to
business risks
than to hazard risks. Org engage in divers
by
providing a variety of products and
services that
are used by a range of customers
Describe the advantage of using -helps achieve the org's
cash flow analysis for the selection value-maximization goal
of risk control measures by providing a basis of comparison for all
value-
max decisions
-increases efficiency by reducing
unnecessary
expenditures on risk control
and Answers with Verified Solutions | Latest
Updated 2026
Explain How proactive and proactive - seeks to avoid a loss exposure
reactive before it
avoidance differ in reducing loss exists, ex. choosing not to engage in
frequency of a loss exposure activity
reactive - seeks to eliminate exp that
already exists,
but does not eliminate exp from past
activities
Describe the purpose of the -preloss- applied before a loss occurs.
following loss reduction measures Reduce
in amount of property damage and number of
controlling losses: people injured from single event
-Pre-loss measures -posts - applied after loss. Focus on
-post-loss measures emergency
procedures, salvage ops, rehab activities,
public
relations, or legal defense to halt the
spread or to
count the effects of a loss
, Describe the purpose of a disaster its to ensure that critical resources are
recovery plan available to
facilitate an orgs continuity of operations in
an
emergency.
-typically includes back up procedures,
emergency
response, and post-disaster recovery
Identify circumstances in which -sep- appropriate if the org can operate
each with only
of the following techniques would a portion of the separated assets or
be an effective choice for loss locations left
reduction: intact
-separation -dup - approp. if antire asset or activity is
-duplication so
-diversification important that the consequence of its loss
justifies
the expense and time to duplicate it
-divers- more commonly applied to
business risks
than to hazard risks. Org engage in divers
by
providing a variety of products and
services that
are used by a range of customers
Describe the advantage of using -helps achieve the org's
cash flow analysis for the selection value-maximization goal
of risk control measures by providing a basis of comparison for all
value-
max decisions
-increases efficiency by reducing
unnecessary
expenditures on risk control
