Shared Flashcard Set

Details

Corporate Risk Management
Test 3
242
Business
Undergraduate 4
11/17/2009

Additional Business Flashcards

 


 

Cards

Term
liability
Definition
A ________ exposure is a condition that presents the possibility of a legal claim or lawsuit being made against an organization?
Term
law
Definition
Legal liability exposures exist when responsibility is imposed by _____?
Term
22%,54%
Definition

High Cost of the US System

Currently, the system is extremely inefficient, and sometimes it is uncertain who actually benefits from the litigation process

  • ____% of the tort dollar goes to compensate victims for economic losses
  • ____% of teh tort dollar never reaches the victim
Term
2.2%
Definition

Global Competitiveness

Tort costs represent ____% of the US GDP, which puts the US at a significant disadvantage when compared to other countries

Term
litigation
Definition

Global Competitiveness

Emerging markets ahve very low _________ costs?

Term
Increased
Definition

Recent Developments

Increased/Decreased likelihood for tort reform?

Term
Tort
Definition
A wrongful act or omission, independent of a contract?
Term
Intentional Tort
Definition

Tort Liability

____________ torts: torts committed with general/specific intent to commit the tortuous act

Term
Intentional Tort
Definition

Tort Liability

________ Tort?

  • can be against a person, or can involve property or business
  • Include assult & battery, malicious prosecution, defamation (liabel and slander)
  • Intent to cause harm is not necessary
Term
Negligence
Definition
_____________: Failure to exercise degree of care a reasonably prudent person would exercise under similar circumstances
Term
  1. special
  2. General
Definition
What are the two types of compensatory damages?
Term
Compensatory damages
Definition

_________ Damagaes:

payment for actual losses sustained?

Term
special compensatory damages
Definition

Types of Compensatory Damages:

  • actual monetary losses sustained
  • Has a $ amount
Term
general compensatory damages
Definition

Types of compensatory damages:

  • Has no $ amount
  • Injuries are presumed to follow from the type of wrong
Term

Compensatory

Punitive

Definition
What are the two types of damages?
Term
Punitive damages
Definition

__________ Damages:

punishment for especially wrongful act or a deterrent for future pruposes

Term
T
Definition

T/F?

Both frequency and severity of punitive damages have been increasing in recent years

Term
Contributory
Definition

Defenses to Negligence? ____________ Negligence

If the plaintiff is 1% at fault, recovery is completely barred?

Term
Comparative
Definition

Defenses of negligence:

________ Negligence?

Plaintiff's recovery reduced by extent to which at fault

Term
Assumption of the Risk
Definition

Defenses of Negligence:

___________  ___ ___ ________?

Plaintiff knowingly/voluntarily accepted teh possibility of harm

Term
Joint and Several
Definition

______________ ___ ___________ Liability?

Liability of multiple defendants collectively or individually for entire amount of damages

Term
financially
Definition
The "Deep Pocket Concept" is mroe harmful to ___________ sound defendants?
Term
Strict
Definition

__________ Liability?

Liability that is not based on negligence or the intent to cause harm

Term
Strict
Definition

__________ Liability:

  • Very common with products liability, and Workers' Compensation
  • Can be imposed by tort law, or by statutes
  • Tort Law applies to:
    • Abnormally dangerous activities
    • Sale of dangerously defective products
Term
Vicarious
Definition

_____________ Liability:

When one party is held responsible for action of a subordinate/associate becuase of the relationship between the two parties

  • Began with concept of Respondeat Superious
  • Applies to acts of employees, or to joint tortfeasors, and depends on the laws in the state
Term
Assumption
Definition

________ by contract:

Liability that arises b/c of an enforceable agreement between 2+ parties that creates an obligation to do, or not do, somehting

Term
statutory
Definition

____________ Liability:

Responsibilities are prescribed by statutes and regulations (law) rather than by tort law principles, and a breach need to be intentional

  • Prevalent with Workers' Compensation, pollution, and auto
Term
Premises and Operations
Definition

Specific Liability Exposures:

___________ _____ __________

  • Possibility that an organization will be held liable because of bodily injury/property damage caused by either:
    1. An accident occurring on premises owned/rented by the organization, or
    2. An accident occurring away from such premises, but only if it arises out of the organization's ongoing operations
Term
yes
Definition

Specific Liability Exposures:

Does premises and operations include fire legal liability?

Term
Products or services
Definition

Specific Liability Exposures:

__________ __ _________

  • Arise out of injuries/damage that results from a defective product or faulty workmanship
Term
Bailee
Definition

Specific Liability Exposures:

___________ liability

  • Bailee only becomes liabile to bailor when the bailee is negligent, and what constitutes negligence depends on teh circumstances of the bailment
Term
Fiduciary
Definition

Specific Liability Exposures:

___________ liability

Exists when a director/officer fails to act in the best interests of the shareholders

  • Frequently involved with D & O claims, and employee benefit claims
Term
Professional Liability
Definition

Specific Liability Exposures:

____________ Liability

Organizations employing professionals face professional liability loss exposures

  • Arises out of the practice of a profession, which has traditionally been associated with medicine, law, education, and clergy
  • Often referred to as malpractice, or E&O
    • tend to have more "long tailed" claims than most other liability expsoures
  • Professionals are held to a higher standard of care than would otherwise be required
Term
Employment Practices Liability
Definition

Specific Liability Exposures:

__________ ___________ Liability

Generally involves discrimination in hiring/firing practices, sexual harassment, and wrongful termination claims

Term
T
Definition

T/F?

The most frequent charges allege some form of discrimination, sexual harassment, or wrongful termination?

Term
insurance
Definition
The most important civil justice reform proposal is reducting ________ cost in Auto and medical malpractice?
Term
Policy trigger
Definition

___________ _________?

An event/activity that activates coverage for a particular policy

Term
Accident
Definition

_________ Policy Trigger:

policy is activated when accident occurs; common for auto?

Term
Occurrence
Definition

__________ Policy Trigger:

  • Policy in force when wrongdoing occurred is activated
  • no limits on length of time
Term
Claims-Made
Definition

_________-_______ Policy Trigger:

  • Policy in force when claim was made is the one that pays
  • Very common for long-tail claims lines of business
Term
Policy
Definition

__________ Limits:

Generally separated by occurrence limits, and annual aggregate limits

 

Term
Defense
Definition

_________ Costs

  • Normally responsiblity of insurer, who has a comparative advantage
  • Can be in addition to the limit, or included in teh limit
Term
Umbrella; Excess
Definition
Both __________ policies and __________ liability policies exist to provide coverage on top of primary coverage
Term
Excess
Definition

_________ Liability:

Coverage on top of a single, specific underlying coverage

Term
Umbrella
Definition

__________ Liability:

Coverage on top of multiple underlying catagories of coverage

Term
Included
Definition

Umbrella Liability Policies:

Included or excluded?

Commercial General Liability

Term
included
Definition

Umbrella Liability Policies:

Included or excluded?

Business Auto coverage

Term
included
Definition

Umbrella Liability Policies:

Included or excluded?

Employers' Liability- for employee injuries in the workplace if not covered by WC

Term
included
Definition

Umbrella Liability Policies:

Included or excluded?

Liquor Liability- liquor provider can be sued if intoxicated patron injures another (dram shop)

Term
excluded
Definition

Umbrella Liability Policies:

Included or excluded?

Workers' Comp

Term
excluded
Definition

Umbrella Liability Policies:

Included or excluded?

Aircraft/Watercraft

Term
excluded
Definition

Umbrella Liability Policies:

Included or excluded?

Pollution

Term
Excluded
Definition

Umbrella Liability Policies:

Included or excluded?

Product Recall

Term
excluded
Definition

Umbrella Liability Policies:

Included or excluded?

Care, Custody, and Control- of property of others

Term
T
Definition

Losses Covered by Umbrella Policies (T/F?)

  • Losses that are above the single (occurrence) or aggregate limits in primary policy
    • loss is covered but limit is exhausted
  • Losses outside of the primary policy, in which case umbrella pays after retention (self-insured retention/SIR)
Term
no, once primary limit is penetrated, umbrella policy is triggered
Definition

Umbrella Policies

Is there a gap between primary policies and umbrella policies?

Term
risk control transfers
Definition

Types of Contractual Liability Transfers?

Risk ________ Transfers:

  • moving activity around
    • incorporation- shifting liability through law
    • leasing
    • subcontracting
    • waivers- effective, but may not always be enforceable
Term
Risk Financing Transfers
Definition

Types of Contractual Liability Transfers?

Risk ________ Transfers:

  • Without the presence of all three, any risk financing measures are doomed.  Insurance provides financial assets in teh event of losses, but insureds cannot control third party's exposures
    •  
      • Insurance- primary method
      • Hold-Harmless Agreements
      • Indemnity Agreements
Term
insurance
Definition
What is the primary method in risk financing transfers?
Term
limited
Definition

Extent of Responsibility Transfered (Contractual Liability Transfers)

<Limited, moderate, or broad>?

  • Restating Law
  • clarifying contract terms
Term
moderate
Definition

Extent of Responsibility Transfered (Contractual Liability Transfers)

<Limited, moderate, or broad>?

  • Shifting Responsibility for Joint Fault
  • Both parties responsible, but only one pays
Term
broad
Definition

Extent of Responsibility Transfered (Contractual Liability Transfers)

<Limited, moderate, or broad>?

  • Shifting all responsibility
  • no responsibility for one party, but still pay
  • If shift is contrary to public policy, courts will normally not uphold
Term
Enforceability
Definition

Management of Contractual Transfers:

Factors Affecting Use

  • ___________- insurance policies are Contracts of Adhesion, which means any ambiguity is construed agaist the writer of the contract
Term
Yes
Definition
Is a comparative advantage in managing risk a factor affecting use in the managemetn of contractual transfers?
Term
T
Definition
T/F, A fundamental guideline for the management of contractual transfers is the ability of the firm to pay?
Term
true
Definition
T/F, A fundamental guideline for the management of Contractual Transfers is requirement of certificates of insurance to prove existence?
Term
Sarbannes-Oxley
Definition

Directors & Officers legal liability

Strongly influenced recently by ______________-________: builds more oversight into corporate governance

  • No fiscal limit on liability
  • Must convince regulators of a backup plan
Term
Functional
Definition

Directors and Officers Legal Liability

Exposures to Loss:

  • Basic __________ Duties:
    • hiring
    • appointing
    • managing firm
Term
derivative suit
Definition

_____________ Suit:

brought by shareholders on behalf of the company for harm to the company

Term
Non-derviative suits
Definition

___-__________ suit:

Can come from a multitude of different parties (class-actions common form)

Term
Claims-Made basis
Definition

Common policy features of D&O insurance

_______-______ Basis:

  • Policy in force when claim is made, regardless of hwen act committed, is teh policy that will pay for losses
Term
12
Definition

D&O insurance

Discovery clause has a ___ month tail?

Term
no
Definition

D&O Insurance (covered?)

dishonest acts

Term
no
Definition

D&O Insurance (covered?)

bodily injury to any person

Term
no
Definition

D&O Insurance (covered?)

pollution

Term
no
Definition

D&O Insurance (covered?)

defamation

Term
yes
Definition
D&O, do shareholders, employees, and customers/clients sue directors and officers?
Term
yes
Definition

D&O

Are some issues:

  • Wrongful termination
  • inadequate/inaccurate disclosures
  • Merger/Acquisition activities?
Term
operation
Definition

Liability Automobile Exposures

What is the most common activity that leads to liability, or ways liability can arise?

Term
SUVs
Definition
What type of automobile is most likely to be damaged because of the size or type of vehicle in question?
Term
no
Definition

Business Auto Coverage (BAC)

Is pollution a covered liability?

Term
no
Definition

Business Auto Coverage (BAC)

Is mobile equipment a covered liability exposure?

Term
an open perils
Definition

Auto Physical Damage Insurance

Comprehensive OTC (other than collision) is usually written on what type of basis?

Term
no
Definition

Auto Physical Damage Insurance (covered)?

 wear and tear or general maintenance

Term
no
Definition

Auto Physical Damage Insurance (covered)?

sound reporducing/recording equipment not permanently installed in a plae where intended

Term
yes
Definition

Auto Physical Damage Insurance (covered)?

Sound reproducing/recording equipment if permanently installed in a place where intended?

Term
no
Definition

Auto Physical Damage Insurance (covered)?

radar detectors

Term
hired
Definition

BAC- Car rental issues

Short term leases, those that are less than 1 year at the inception date are treated as _____ autos?

Term
owned
Definition

BAC

Long-term leases, those over 1 year at inception date, are treated as ____ autos for insurance purposes?

Term
liability coverage
Definition

Garage Coverage Forms

_______ coverage

  • general liability and auto liability combined?
Term
garagekeepers coverage
Definition

Garage Coverage Forms

______________ coverage?

  • for property in care, custody, and control of the named insured?
Term
physical damage protection
Definition

Garage Coverage Forms

_________ _________ Protection

  • collision and comprehonsive available?
Term
Truckers
Definition

____________ Coverage Form

  • For insureds in teh business of transporting property of others
Term
Any auto
Definition

BAC

Classifications of Covered Autos

What is the most comprehensive and most expensive type of coverage?

Term
state
Definition

BAC

Classifications of Covered Autos

  • Classifications 3-7 exist so organizations can target only the coverage that the ______ may mandate?
Term
no
Definition

BAC

Classifications of Covered Autos

  • Does owned autos only cover temporaty rentals?
Term
no
Definition

BAC

Classifications of Covered?

  • Does "Hired Autos only" include vehicles owned by employees?
Term
service
Definition

4 Classifications of the Truckers Coverage Form

(service, retail, commercial, mobile equipment?)

  • transporting the insrued's personnel, tools, equipment, and individual supplies to or from a job location?

 

Term
retail
Definition

4 Classifications of the Truckers Coverage Form

(service, retail, commercial, mobile equipment?)

  • Pick up property from, or deliver to, individual households
Term
commercial
Definition

4 Classifications of the Truckers Coverage Form

(service, retail, commercial, mobile equipment?)

  • Uses other than service or retail
Term
mobile equipment
Definition

4 Classifications of the Truckers Coverage Form

(service, retail, commercial, mobile equipment?)

  • Covered by CGL
  • Inland marine equipment floaters are also available
Term
broad, loading
Definition

Fleet Loss Control

  • Fleet Safety Program needs to be ______, many claims/losses stem from improper _________?
Term
Insurance
Definition
_________ Fraud is the second largest economic crime?
Term
states
Definition
Workers' Compensation Laws are generally left to the _______?
Term
Investment Gains
Definition

Workers' Compensation

What is the reason for recent profitability in the industry?

Term
3
Definition

Workers' Compensation Laws

  • In most states, any employer with over ___ employees must purchase WC insurance
Term
medical, compensation
Definition

Workers' Compensation Laws

Types of benefits?

Normally consist of ________ bills and ____________ for lost wages

Term
Disability
Definition

Workers' Compensation: Types of Benefits?

  • Cash payments to injured workers to replace income lost because of worker's inability to return to work ot inability to return to the position he/she had before injury occurred?
Term
Disability
Definition

Workers' Compensation: Types of Benefits?

  • Basically,they are indemnity payments
  • Benefits are not payable immediately after injury, must wait specified number of days
Term
partial
Definition

Workers' Compensation: Types of Benefits?

(Partial vs. Total)

  • Injured worker can work in some capacity despite injury
Term
total
Definition

Workers' Compensation: Types of Benefits?

(Partial vs. Total)

  • Until recovery (if possible) injured worker is not able to work
Term
temporary
Definition

Workers' Compensation: Types of Benefits?

(Temporary V. Permanent)

  • is expected to recover

 

Term
permanent
Definition

Workers' Compensation: Types of Benefits?

(Temporary vs. Permanent)

  • Will never be the same as before the injury occurred
Term
2/3
Definition

Workers' Compensation: Types of Benefits?

(Benefit levels)

  • Usually expressed as a % of pre-injury wages, normally ___, but mandated by states
Term
Death
Definition

Workers' Compensation: Types of Benefits?

Compensation for _________

  • to surviving spouses adn dependents; also vary by state
  • Normally limited in time, and some states provide for a burial allowance
Term
Medical
Definition

Workers' Compensation: Types of Benefits?

________ Benefits

  • covered by almost all states
  • Scope of covered medical care is broad, and coverage begins immediately after injury
Term
Rehabilitation Services
Definition

Workers' Compensation: Types of Benefits?

____________ Services

  • Means to reduce seriousness, and cost of disabling injuries
  • Provide vocational/physical assistance to injured workers
  • Often reduce ultimate losses; available even if state does not include specific provision for them
Term
Occupational
Definition

Workers' Compensation: Accidents Covered?

 

  • Provides benefits only for _________ injuries- those that arise from worker's employment
Term
accident
Definition
A situation that is an "undersigned, sudden and unexpected event"
Term
injury
Definition

Workers' Compensation

  • What is normally required to be an accident?
Term
yes
Definition

Workers' Compensation: Accidents Covered?

Must arise out of and in the course of employement?

Term
no
Definition

Workers' Compensation: Accidents Covered?

  • Injuries that occur while commuting to/from work?
Term
yes
Definition

Workers' Compensation: Accidents Covered?

  • Delivery injuries?
Term
Motor vehicles
Definition
What is the leading cause of workplace death?
Term
strains
Definition
What is #1 in Workers' Compensation claims by nature of injury?
Term
Lower back
Definition
What is #1 in workers' compensation claims made by body parts?
Term
Monopolistic
Definition

Workers' Compensation Exposures

(Funding of Obligation)

  • ___________ State Fund- must purchase WC insurance from a state-approved fund?
Term
Competitive
Definition

Workers' Compensation Exposures

(Funding of Obligation)

  • ___________ State Fund- state fund competes with private insurers?
Term
Private
Definition

Workers' Compensation Exposures

(Funding of Obligation)

  • __________ Insurance- purchase insurance from private insurers
Term
qualified
Definition

Workers' Compensation Exposures

(Funding of Obligation)

Retention is also known as _______ self insurance?

Term
retention
Definition

Workers' Compensation Exposures

(Funding of Obligation)

What is the lowest cost option?

Term
Assigned
Definition

Workers' Compensation Exposures

(Funding of Obligation)

_________ Risk Plans- residual markets

Term
Longshore and Harbor Workers Act
Definition

Workers' Compensation Laws

______________ ___ _________ _________ Act?

  • Applies to longshoremen, harbor workers, and other maritime workers who are injured during course of employment, or suffer diseases caused/worsened by conditions of employement
  • Provides medical benefits, compensation for lost wages, and rehab services
  • Has been extended by Defense Base Act, Other Continental Shelf Lands Act, and Nonappropriated Fund Act
Term
Federal Employers Liability Act (Interstate Railroad Workers)
Definition

Workers' Compensation Laws

___________ ___________ ____________ Act?

  • Enables injured railroad employees to sue employer for occupational injuries resulting from negligence, and prevents employer from asserting common-law defenses
Term
Comparative
Definition

Workers' Compensation Laws

Federal Employers Liability Act:

  • Tort based Act, involves ___________ negligence on part of employer
Term
Jones Act (Maritime Employement)
Definition

Workers' Compensation Laws

________ Act

  • For sailors on US vellels
  • Allows negligence suits against the employer
Term
Dual Capacity
Definition

Employers' Liability Exposures

Suits by Employees

  • Employees can sue the employer based on the _________ _________ Doctrine, which asserts employer is serving a capacity other than an employer when teh injury occurs.
Term
yes
Definition

Employers' Liability Exposures

Suits by third parties

  • Can suits be brought by spouses?
Term
yes
Definition

Employers' Liability Exposures

Suits by third parties

  • Can suits be made against from consequential injuries, such as a mother pregnant with a child?
Term
yes
Definition

Employers' Liability Exposures

Suits by third parties

  • Can suits be made by Third-Party-Over Injuries
  • i.e. Employee sues employer and manufacturer, manufacturer then files EL suit on employer to recover damages?
Term
A, 1
Definition

WC/EL Insurance

Workers' Compensation Coverage is referred to as Coverage __ or part __?

Term
B, 2
Definition

WC/EL Insurance

  • Employers' Liability Coverage is often referred as Coverage __ or part __?
Term
no
Definition

WC/EL Insurance:

Workers' Compensation Coverage?

  • Are there policy limits

 

Term
Suborgation
Definition

WC/EL Insurance:

Workers' Compensation Coverage?

  • What is the huge benefits of this type of coverage?
Term
yes
Definition

WC/EL Insurance:

Employers' Liability Coverage?

  • Includes Dual Capacity Doctrine, i.e. allows tort suits by employees and families?
Term
no
Definition

WC/EL Insurance:

Employers' Liability Coverage?

  • Covers retailiation/discharge by employer

 

Term
Employers' Liability
Definition

WC/EL Insurance:

_________ _______ Coverage?

  • There are limits of liability
  • Limits can be based on bodily injury per accident or per disease
  • Per accident, per employee, and aggregate limits can apply
Term
3A
Definition

Other States Insurance:

(3A vs. 3C)

  • States with known Operations?
Term
3C
Definition

Other States Insurance:

(3A vs. 3C)

  • States where operations could arise?
Term
no
Definition

Other States Insurance:

  • Can monopolistic states be listed such as Ohio?
Term
Workers' Compensation, Employers' Liability
Definition

Other States Insurance:

  • Monopolistic states only sell ___________ ___________ coverage, not ____________ ____________ coverage?
Term
Voluntary Compensation Endorsement
Definition

Other WC/EL Coverages:

_____________ _____________ Endorsement?

  • Cannot force employee to collect, but takes place of WC in states without statues
  • Employees can still sue if they choose to
  • Often builds goodwill for employer
Term
Stopgap cover
Definition

Other WC/EL Coverages:

________ _______

  • EL exposure still exists in monopolistic states, so this coverage covers EL exposures in those states
Term
Federal
Definition

Other WC/EL Coverages:

Endorsements for __________ Acts?

  • Provides coverage for other, additional employees
Term
Foreign Voluntary Comp Coverage
Definition

Other WC/EL Coverages:

_________ _________ ________ Coverage?

  • 30+ day overseas employees not covered under standard policy, but can use this endorsement to provide coverage
  • Normally must also meed local requirements
Term
transfer
Definition

Workers' Compensation Loss Financing

General Financing Issues:

  • Predictability-loss development patterns dictate when damages are paid out
    • As they become more predictable, _____ is less valuable
Term
discount rate
Definition

Workers' Compensation Loss Financing

General Financing Issues:

IRR determines the ________ rate?

Term
friction
Definition

Workers' Compensation Loss Financing-

General Financing Issues:

Firms want to decrease _______ costs?

Term
Residual Market
Definition

Workers' Compensation Loss Financing-

General Financing Issues:

________ __________ Loads?

  • Option for organizations that cannot obtain coverag ethrough voluntary market
  • Charge on voluntary premiums to subsidize residuals
Term
Prospective Insurance
Definition

Workers' Compensation Loss Financing:

____________ __________ Rating Plans?

  • Cost this year is what insurer believes to be expected cost of losses based on prior experience, normally an average of the past 3 years 
Term
current
Definition

Workers' Compensation Loss Financing

Manual rate- applieas only to ______ policy year?

Term
Dividend
Definition

Workers' Compensation Loss Financing:

______ Plans?

  • provide a refund of premiums for good (low) loss experience

 

Term
participating
Definition

Workers' Compensation Loss Financing:

Dividend Plans?

(Participating vs. Sliding Scale)

  • overall experience of insured
Term
sliding scale
Definition

Workers' Compensation Loss Financing:

Dividend Plans?

(Participating vs. Sliding Scale)

  • somewhat loss-sensitive
Term
Deductible
Definition

Workers' Compensation Loss Financing:

________ Plans?

  • More retention is build into the program

 

Term
Retrospective Rating Plans
Definition

Workers' Compensation Loss Financing:

______________ _______ Plans?

  • Rates based on actual losses in current year, which impact current premiums

 

Term
HR, WC
Definition

Workers' Compensation Loss Financing:

Employee Leasing?

  • Leasing firms responsible for ___ and ___ of leased employees
Term
Monday and Friday
Definition

Controlling WC Costs:

  • What are the two most common days for WC claims?
Term
clerical
Definition

Controlling WC Costs:

________ errors are very common, need accurate data?

Term
70%
Definition

Controlling WC Costs:

Fraudulent claims- ____% of fraudulent claims are from providers, not employees

Term
workstyle
Definition

Controlling WC Costs:

Most recommendations for workplace injuries involve changes to ________?

Term
Job Safety
Definition

Controlling WC Costs:

_____ ______ Analysis?

  • Selection of critical list
  • Materials handling and storage
  • Repetive motion injuries
Term
Engineering
Definition

Controlling WC Costs:

Safety?

___________ Controls

  • Machine guards
  • Health hazards
Term
Post-accident
Definition

Controlling WC Costs:

_______-_________ Control?

  • EMT
  • Rehab
Term
the insurer
Definition

Controlling WC Costs:

Whose responsibility is it to asses reserving practices?

Term
closed
Definition

Controlling WC Costs:

Assessing Reserving Practices?

  • Inactivity- if a claim is open for acertain period of time, it can probably be _______?
Term
open
Definition

Controlling WC Costs:

Assessing Reserving Practices?

  • Reserving Accuracy (open vs. closed)- compare accuracy of reserves while claims are ______?
Term
Mean+ 3*standard deviation
Definition

Controlling WC Costs:

Abnormal reserves?

  • Norm= ?
Term
OSHA
Definition
Who is the Inspection/ Enforcemetn agency of the Department of Labor?
Term
cleanliness and safety
Definition
OSHA Standards mostly involve _________ and ________?
Term
De minimis
Definition

OSHA Penalties:

___ _________?

  • No immediate threat, but acts as a warning
Term
Serious
Definition

OSHA Penalties:

________

  • Firm has immediate threats to health
  • Fines
  • Prison is possible

 

Term
recordkeeping and compliance
Definition

OSHA Penalties:

____________ and ____________ are the most significant part?

Term
closely
Definition
Business continuity is especially crucial for ______ held businesses?
Term
prior
Definition

Business Continuity

  • Ideal solution for most businesses is to make prior arrangements for the sale fo an individual's interest ______ to the death/disability through a buy and sell agreement?
Term
sole proprietorship
Definition

Business Continuity:

(sole proprietorship vs. partnership vs. corporations)

  • is the most vulerable?
Term
partnership
Definition

Business Continuity:

(sole proprietorship vs. partnership vs. corporations)

  • usually dissolved immediately at the death of a partner, unless express agreemetn in place beforehand
Term
corporation
Definition

Business Continuity:

(sole proprietorship vs. partnership vs. corporations)

  • Are not immune from continuity issues
  • A big problem is when the entity in question is a one-person enterprise
Term
no
Definition

Key Person Exposures:

  • Do Key persons have to be owners of the company?
Term
business
Definition

Business Continuation Plans:

________ Form

  • Most appropriate plan depends on this form?
Term
buy-sell agreements
Definition

Business Continuation Plans:

______-_____ Agreements

  • Other owners can purchase interests of deceased partner at time of death?
Term
Entity
Definition

Business Continuation Plans: Funding Approaches

________ Plan?

  • Controlled though the business
  • better when the firm has many owners
  • Organization purchases life insurance on each key person
Term
Cross Purchase Plan
Definition

Business Continuation Plans: Funding Approaches

________ _________ Plan?

  • One owner purchases life insurance for each of partners, other than himself
  • Becomes complicated as # of owners increase?
Term
Boards
Definition

 

_______serve as one mechanism for balancing the potential conflicts between owners and managers?
Term
Declarations
Definition

Property Risks and Coverages: Policy Organization

  • At the beginning of the policy and dictate the following:
    • insurance interest
    • coinsurance %
    • causes of loss forms
    • valuation
Term
loss
Definition

Property Risks and Coverages: Policy Organization

  • An Insurable Interest must exist at the time of the ______?
Term
underinsurance
Definition

Property Risks and Coverages: Policy Organization

  • Coinsurance %- an _____________ penalty encourages insurance to value
Term
RC-depreciation
Definition

Property Risks and Coverages: Valuation

  • Actual Cash Value formula?
Term
replacement cost
Definition

Property Risks and Coverages: Valuation

  • Most attractive b/c of tax laws?
Term
Functional
Definition

Property Risks and Coverages: Valuation

___________ Valuation?

  • When MV exceeds RC, good for old buildings
  • replaces with functional equivalent
Term
Agreed
Definition

Property Risks and Coverages: Valuation

__________ Value

  • Suspends the coinsurance condition
Term
cancellation
Definition

Property Risks and Coverages: Policy Conditions

_____________?

  • can sometimes extend the cancellation period
Term
Transfer of rights of Recovery
Definition

Property Risks and Coverages: Policy Conditions

_____________ of ___________ of Recovery?

  • also called suborgation
Term
yes
Definition

Property Risks and Coverages: Covered Property (covered)?

  • Business Personal Property- leased property considered owned?
Term
insured
Definition

Property Risks and Coverages: Controlling Costs

Valuation?

  • You should include only values of ______ property
  • Excluded property should not be included 

 

 

Term
date
Definition

Property Risks and Coverages: Controlling Costs

Valuation

  • For correct valuations, make sure your keep up to ______?
Term
fluctuating
Definition

Property Risks and Coverages: Controlling Costs

Ratings?

  • Reporting forms are used for ________ values
Term
credits
Definition

Property Risks and Coverages: Controlling Costs

Ratings

  • Duplicate records- ______ provided if maintian backups
Term
DIC
Definition

_________ Insurance:

Function:

  • converts named-perils or all risks policy to even broader all-risks policy
  • not intended to be "excess" insurance
  • Manuscripted coverage
Term
yes
Definition

DIC Insurance (covered?):

flood and earthquake

Term
yes
Definition

DIC Insurance (covered?):

Indirect loss or loss in transit

Term
yes
Definition

DIC Insurance (covered?):

identified and unidentified perils

Term
less
Definition
DIC Insurance is more/less costly than separate insurance?
Term
no
Definition
Does DIC Insurance have a coinsurance provision?
Term
fewer
Definition
DIC insurance has more/fewer policies?
Term
DIC
Definition

_______ Insurance:

Disadvantages:

  • market is mroe volatile- may not always be available
  • policy interpertation can be difficult
Term
Ordinance or law
Definition

____________ __ _______ Coverage:

  • Ordinances/laws increase the probability of a total loss because of requirement to meet new codes?
Term
A
Definition

Ordinance or Law Coverage

(A vs. B vs. C)?

  • covers reduction in value of undamaged portion that must be demolished
Term
B
Definition

Ordinance or Law Coverage

(A vs. B vs. C)?

  • Covers cost to demolish undamaged portion of structure and remove debris
Term
C
Definition

Ordinance or Law Coverage

(A vs. B vs. C)?

  • Covers increased cost to repair/replace in accordance with codes?
Term
property
Definition

Inland Marine Expsoures: Accounts Recievable

  • Information on documetns is valuable, not acutal ______ itself?
Term
Business Income Insurance
Definition

_____________ __________ Insurance:

  • normal difference between revenues and expenses (net income + most continuing expenses)
  • losses can occur due to suspension of operations
Term
Extra Expense
Definition

________ _________ Coverage

  • For organizations that need to continue operations, even if it comes with high costs
  • ex. hospitals and banks
  • common limits are 40-80-100
    • % available for 30 day periods
Term
payment
Definition

Transit Exposures:

  • CIF (Cost of Insurance & Freight) incorporates ________ for transit coverage?
Term
fixed
Definition
Generally, the BPP targets _______ location perils
Term
Common
Definition

Liability by type of Carrier:

_________ Carriers

  • Includes companies that are in teh busienss to transfer property
  • ex. UPS, FedEx
Term
Contract
Definition

Liability by type of Carrier:

_________ Carriers

  • negotiated with organization to transfer, not necessarily open to public use
Term
Private
Definition

Liability by type of Carrier:

_________ Carriers

  • Transport goods for own business
Term
Annual
Definition

Types of Transit Insurance:

__________ Transit Policy

  • Allows for multiple shipments
Term
Trip
Definition

Types of Transit Insurance:

_____ Transit Policy

  • Single occurrence arrangement
Term
Motor Truck
Definition

Types of Transit Insurance:

__________ _______ Cargo Policy

  • More likely for a private Carrier
Term
Checks and Balances
Definition

___________ and _________:

  • The most critical component of crime loss control, and can prevent many problems
  • ex. use with money handling
Term
yes
Definition

Crime Coverage Forms:

  • Does Employee Dishonesty cover all property including money and securities?
Term
Any employee
Definition

Crime Coverage Forms:

  • Who is covered by Employee Dishonesty?
Term
yes
Definition

Crime Coverage Forms:

Forgery-Alteration

  • Does it cover checks/drafts issued by insured
  • Credit cards by endorsement?
Term
Anyone except an employee
Definition

Crime Coverage Forms:

Forgery-Alteration

  • Who is covered by this coverage form?
Term
no
Definition

Crime Coverage Forms:

Theft, Disappearance, Destruction

  • Does it cover other items besides money and securities?
Term
yes
Definition

Crime Coverage Forms:

Robbery & Safe Burglary

  • Does it cover any property other than money and securities?
Term
yes
Definition

Crime Coverage Forms:

Burglary and Robbery of a watchman

  • Does it cover any property other than money and securities
Term
All property including money and secutities
Definition

Crime Coverage Forms:

Computer Fraud

  • What type of property is covered?
Term
yes
Definition

Crime Coverage Forms:

Extortion

  • Are property other than money and securities covered?
Term
yes
Definition

Crime Coverage Forms:

Theft (inside premises) and Robbery of a Messenger (outside)

  • Does it cover any property other than money and securities?
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