RISK MANAGEMENT AND INSURANCE (RMIN 4000) BROWN FINAL EXAM STUDY Q&A UNIVERSITY OF GEORGIA.

RISK MANAGEMENT AND INSURANCE
(RMIN 4000) BROWN FINAL EXAM STUDY
Q&A UNIVERSITY OF GEORGIA.
Loss of business income
Correct Answer -If a business has to shut down for a period of time due to
a physical damage loss, it is unable to generate an income - Direct or
Indirect loss?
INDIRECT!!! EXAMPLE: Grease fire in the kitchen causes a restaurant to
close down for 4 weeks while repairs are made. The restaurant has no
income while closed
risk control
Correct Answer -Techniques to reduce the frequency or severity of losses.
Loss Prevention, Reduces frequency.
EXAMPLES: Airport security, safety training programs
loss reduction
Correct Answer -Reduces severity. EXAMPLE: fire sprinklers
Can occur pre-loss or post-loss. Duplication, Separation & Diversification
avoidance
Correct Answer -Technique in which a certain loss exposure is never
acquired (proactive). EXAMPLE: Heard roommates can be bad & avoided it
altogether.... OR an existing loss exposure is abandoned (reactive).
EXAMPLE: Had a bad roommate and left to avoid the situation