CPCU 500 Practice Exam - Assignment 2 Questions & Answers 100% Correct(SCORED A)

In insurance terminology, trucks, trailers, buses, fire engines, and ambulances designed for road use are examples of which one of the following categories of motor vehicles? - ANSWERAuto Property insurance policies generally refer to the contents of a commercial building as - ANSWERBusiness personal property When a person or business borrows money to buy a home or a building, - ANSWERthe borrower is called a mortgagor Liability entries on an organization's balance sheet are particularly useful to the risk professional for identifying - ANSWERObligations such as mortgage payments To be effective, inspections should be accompanied - ANSWERby discussions with front-line personnel who can identify nonobvious loss exposures. Which one of the following statements is true regarding the use of checklists and questionnaires to identify loss exposures? - ANSWERThe questionnaires developed by insurers, called insurance surveys, relate mainly to loss exposures for which commercial insurance is generally available. . Monitoring and maintaining compliance through compliance reviews can - ANSWERprevent significant losses that the organization would otherwise incur. Property insurance policies use the term "personal property" to refer to the - ANSWERContents of a building. When property is lost or damaged, the value of the property is decreased. In addition to direct damage to the property, there could be indirect losses to the business. This latter type of loss is known as - ANSWERNet income losses. Flowcharts would best help to identify - ANSWERbottlenecks in an organization's operations that might present critical loss exposures A benefit of compliance reviews, if the organization has adequate in-house legal and accounting resources, - ANSWERit can conduct most of the compliance review itself. The financial consequences depend on - ANSWERthe type of loss exposure, the cause of loss, and the loss frequency and severity. Bailees property loss exposures include - ANSWERnot only their owned property, but also the property held for others is correct with respect to the potential financial consequences of a property loss. Because attorneys, physicians, architects, and engineers are considered to be experts in their fields and are expected to perform accordingly, what liability exposure do they face if a client is injured when such an expert fails to exercise the appropriate standard of care? - ANSWERThe liability exposure they face if a client is injured is professional liability. The death of a shareholder in a close corporation is often a significant event for the corporation for which one of the following reasons? - ANSWEROwnership in a close corporation is typically concentrated in just the few major shareholders, most of whom are also managers. The cause of loss that occurs more frequently than death, causing personnel losses,