RMIN 5100s Exam 3 – CH. 5 questions with correct
answers 2026 latest update
What is the difference between property risk and liability risk? – Correct Answer Property
risk involves your own stuff, while liability risk involves potential responsibility for damage
to someone else’s property or bodily injury.
What are the three components of commercial liability? – Correct Answer Commercial
liability includes loss/risk exposures, loss/risk control, and legal liability.
What is the definition of legal liability? – Correct Answer Legal liability is the responsibility
for injury or damages to another party.
What are the two types of legal liability? – Correct Answer Criminal liability (punishable by
imprisonment and fines) and civil liability (punishable by money and injunctions).
What does ‘casualty’ refer to in the context of liability? – Correct Answer Casualty refers to
liability.
What does BI stand for in liability terms? – Correct Answer BI stands for Bodily Injury.
What does PD stand for in liability terms? – Correct Answer PD stands for Property
Damage.
What was the outcome of the 2008/2009 Salmonella outbreak? – Correct Answer It
resulted in 9 deaths, over 700 illnesses, a major recall, and civil lawsuits against the Peanut
Corporation of America.
What are the three bases for legal liability? – Correct Answer Negligence, intentional torts,
and strict liability.
,What are the four elements of negligence? – Correct Answer Duty of care, breach of duty,
injury/damage, and proximate cause.
What does ‘proximate cause’ refer to in negligence? – Correct Answer Proximate cause is
the causal connection between the duty, breach, and injury/damage.
What is the ‘reasonably prudent person standard’? – Correct Answer It is a standard used
to determine if a party acted with the care that a reasonably prudent person would have
exercised in similar circumstances.
What is an intentional tort? – Correct Answer An intentional tort involves an act performed
with the intent to cause harm.
What is strict liability? – Correct Answer Strict liability is liability that exists without the
need to prove negligence or intent.
What does ‘Res Ipsa Loquitur’ mean? – Correct Answer ‘Res Ipsa Loquitur’ means ‘the thing
speaks for itself’ and indicates that negligence can be inferred from the nature of the
accident.
What constitutes a breach of contract? – Correct Answer A breach of contract occurs when
a seller fails to fulfill its promise regarding a product or service.
What are hold harmless and indemnification agreements? – Correct Answer They are
agreements where one party assumes legal liability for another’s liability.
What is the purpose of workers’ compensation insurance? – Correct Answer Workers’
compensation insurance pays for medical costs and lost wages for employees injured on
the job.
, What are dram shop laws? – Correct Answer Dram shop laws hold establishments liable for
serving alcohol to minors or visibly intoxicated persons who then cause harm.
What is contributory negligence? – Correct Answer Contributory negligence is a defense
that prevents a plaintiff from recovering damages if they contributed to their own injury.
What is comparative negligence? – Correct Answer Comparative negligence reduces the
amount of damages a plaintiff can recover based on their percentage of fault.
What is an ‘Act of God’ in liability terms? – Correct Answer An Act of God refers to events
beyond the insured’s control that can lead to liability.
What is the statute of limitations for filing a lawsuit? – Correct Answer In most jurisdictions,
the plaintiff has 2 years to bring a suit, or 2 years after reaching the age of majority if a
minor.
What is the significance of the Peanut Corporation of America case? – Correct Answer It
highlights the consequences of negligence leading to widespread harm and legal
repercussions for corporate leadership.
What are common defenses against liability claims? – Correct Answer Common defenses
include contributory negligence, comparative negligence, intervening cause, and statutes
of limitations.
What is the role of insurance in liability claims? – Correct Answer Insurance can cover the
costs associated with bodily injury and property damage resulting from liability claims.
answers 2026 latest update
What is the difference between property risk and liability risk? – Correct Answer Property
risk involves your own stuff, while liability risk involves potential responsibility for damage
to someone else’s property or bodily injury.
What are the three components of commercial liability? – Correct Answer Commercial
liability includes loss/risk exposures, loss/risk control, and legal liability.
What is the definition of legal liability? – Correct Answer Legal liability is the responsibility
for injury or damages to another party.
What are the two types of legal liability? – Correct Answer Criminal liability (punishable by
imprisonment and fines) and civil liability (punishable by money and injunctions).
What does ‘casualty’ refer to in the context of liability? – Correct Answer Casualty refers to
liability.
What does BI stand for in liability terms? – Correct Answer BI stands for Bodily Injury.
What does PD stand for in liability terms? – Correct Answer PD stands for Property
Damage.
What was the outcome of the 2008/2009 Salmonella outbreak? – Correct Answer It
resulted in 9 deaths, over 700 illnesses, a major recall, and civil lawsuits against the Peanut
Corporation of America.
What are the three bases for legal liability? – Correct Answer Negligence, intentional torts,
and strict liability.
,What are the four elements of negligence? – Correct Answer Duty of care, breach of duty,
injury/damage, and proximate cause.
What does ‘proximate cause’ refer to in negligence? – Correct Answer Proximate cause is
the causal connection between the duty, breach, and injury/damage.
What is the ‘reasonably prudent person standard’? – Correct Answer It is a standard used
to determine if a party acted with the care that a reasonably prudent person would have
exercised in similar circumstances.
What is an intentional tort? – Correct Answer An intentional tort involves an act performed
with the intent to cause harm.
What is strict liability? – Correct Answer Strict liability is liability that exists without the
need to prove negligence or intent.
What does ‘Res Ipsa Loquitur’ mean? – Correct Answer ‘Res Ipsa Loquitur’ means ‘the thing
speaks for itself’ and indicates that negligence can be inferred from the nature of the
accident.
What constitutes a breach of contract? – Correct Answer A breach of contract occurs when
a seller fails to fulfill its promise regarding a product or service.
What are hold harmless and indemnification agreements? – Correct Answer They are
agreements where one party assumes legal liability for another’s liability.
What is the purpose of workers’ compensation insurance? – Correct Answer Workers’
compensation insurance pays for medical costs and lost wages for employees injured on
the job.
, What are dram shop laws? – Correct Answer Dram shop laws hold establishments liable for
serving alcohol to minors or visibly intoxicated persons who then cause harm.
What is contributory negligence? – Correct Answer Contributory negligence is a defense
that prevents a plaintiff from recovering damages if they contributed to their own injury.
What is comparative negligence? – Correct Answer Comparative negligence reduces the
amount of damages a plaintiff can recover based on their percentage of fault.
What is an ‘Act of God’ in liability terms? – Correct Answer An Act of God refers to events
beyond the insured’s control that can lead to liability.
What is the statute of limitations for filing a lawsuit? – Correct Answer In most jurisdictions,
the plaintiff has 2 years to bring a suit, or 2 years after reaching the age of majority if a
minor.
What is the significance of the Peanut Corporation of America case? – Correct Answer It
highlights the consequences of negligence leading to widespread harm and legal
repercussions for corporate leadership.
What are common defenses against liability claims? – Correct Answer Common defenses
include contributory negligence, comparative negligence, intervening cause, and statutes
of limitations.
What is the role of insurance in liability claims? – Correct Answer Insurance can cover the
costs associated with bodily injury and property damage resulting from liability claims.
