Law and Risk Management Pre Test

Question 1

Despite warning signs, danger signs, and verbal information from the worksite foreman that the scaffolding was unsteady, the contractor climbed up on it anyway. The contractor slipped and fell, resulting in severe injuries. In a legal decision, he did not receive compensation for negligence. The full legal defense was:

Answer 1

assumption of risk.

Question 2

In measuring and analyzing their loss exposure, as well as establishing a positive risk management focus, the building owners appropriately focused on the following key loss exposure areas as related to consequences for business operations.

Answer 2

frequency and severity

Question 3

What are you engaged in when comparing insurance services capability proposals?

Answer 3

a conceptual competition that compares their loss exposure, risk management, and insurance needs analyses of your business, as well as their conceptual proposals

Question 4

Under CERCLA, which of the following cannot be held liable for the cost of cleaning up contaminated sites?

Answer 4

a tenant no longer in control of the premises for spills or releases that occur after lease termination

Question 5

Perfect Remediation, Inc., provides both professional services and the actual physical operations for pollution abatement projects. As a result, the company can combine the contractors’ pollution legal liability coverage on an occurrence basis and its professional liability coverage on a(n) _______________ basis.

Answer 5

completed operations

Question 6

National Property Holdings provided a list of its insurable property, loss of income, and extra expense value for each insured location to allow the insurer to calculate a blanket insurance limit. This list was a(n):

Answer 6

statement of values.

Question 7

Henry is reviewing his company’s insurance policy and has just finished the section that lays out the general ground rules for the policy. This section of an insurance policy is referred to as the:

Answer 7

conditions

Question 8

When Gwen, property manager for the Alliance Building, expands the scope of her legal authority beyond what the principal explicitly gave to her as the agent, but in a manner that the principal by his conduct allows, she is exercising:

Answer 8

apparent authority.

Question 9

A key component in risk management is ensuring that the right entities are involved in the loss control process. Four parties that share responsibility in the loss control process are:

Answer 9

individual businesses, property management firms, insurance companies, and government.

Question 10

In a legal action for an intentional tort, Harvey was taken to court for using force to get back property that had been taken from him illegally. He had the right to the property and had previously demanded it be returned. His valid legal defense under common law was:

Answer 10

repossession of property.

Question 11

The lawyer cautioned Jeffrey about naming additional insurees to his general liability policy primarily because adding them might increase premiums for the named insured and _______________.

Answer 11

dilute the available amount of liability coverage

Question 12

Mrs. Palovska, the seller, and Mr. Damas, the buyer, decide to amend their contract. Mr. Damas owes Delphi Lending, Inc., money for purchase of the property. The amendment of the original contract serves to:

Answer 12

address only the terms mentioned in the amendment.

Question 13

Carella was tasked by her property manager to locate their written verification of the type, term, and amount of insurance they were carrying across the board. What type of document was she searching for?

Answer 13

a certificate of insurance

Question 14

For commercial property owners and managers, what is the most likely cause of bodily injury claims?

Answer 14

a condition on the premises relating to safety, maintenance, upkeep, and general management

Question 15

In a net lease, the tenant pays:

Answer 15

a fixed rent plus other costs, taxes, utilities, repair, maintenance, and insurance costs.

Question 16

As the IT manager, Harriett has always kept duplicate digital records at an offsite location distant from her property. This is an example of a(n):

Answer 16

separation of loss exposure.

Question 17

Jennifer insured her $500,000 property under two policies, one for $300,000 and the second for $200,000. When she suffered $100,000 of property damage, each paid a portion that when combined, covered the total loss. This was because of the _______________ in each policy.

Answer 17

other insurance clause

Question 18

Able Accounting abandoned its leased office premises and ceased to pay rent because of continuous elevator breakdowns, lack of heat, and unlit hallways. Jones Leasing, the landlord, fortunately had a clause in the lease that enabled them to convert Able Accounting’s rent obligation into an obligation to pay damages. This type of lease clause is referred to as a:

Answer 18

survival clause.

Question 19

In the third-party liability claim against Rough-House Sports Company, as the insured, which of the following is the duty of Rough-House Sports?

Answer 19

submit a proof-of-loss form

Question 20

Performance in contractual terms reflects which of the following?

Answer 20

doing the acts required in the manner stipulated and time and place required

Question 21

Edward is making coffee in his office for a prospective tenant. He turns to answer his cell phone and knocks over the coffee pot, severely scalding the prospective tenant and ruining her clothes. This is an example of which legal concept?

Answer 21

negligence

Question 22

Fred had a customer who slipped while shopping in his store. What type of loss exposure does this represent to Fred?

Answer 22

liability

Question 23

Mrs. Sanchez’s office was flooded and severely damaged due to a blockage in the building’s drainage system. She is claiming:

Answer 23

compensatory damages.

Question 24

In his commercial general liability insurance policy, Mr. Sanchez’s business is listed as a named insured and designated as a partnership. Who can be covered by the policy besides Mr. Sanchez?

Answer 24

his members, his partners, and his partners’ spouses while working for the company

Question 25

Coverage provided by its employer’s liability insurance protected Alpha Construction from:

Answer 25

suits brought against the company by relatives of an employee injured on the job.

Question 26

When a tenant at Bright Manor defaulted on rent, the landlord did not terminate the lease, but instead invoked the right of _______________ in the lease. This enabled him to enter the tenant’s property, seize its goods, and hold them for sale to offset unpaid rent.

Answer 26

distraint and distress common law right

Question 27

Jose is reviewing a document containing a legal description of his property and notices that the description is done in the form of a survey that offers a sequence of compass directions and distances corresponding to the property’s boundaries. This type of legal property description is referred to as:

Answer 27

a metes and bounds description.

Question 28

Georgina’s 401(k) plan is a type of:

Answer 28

group thrift or savings plan.

Question 29

Randy is searching to identify all causes of loss that are covered in his insurance policy. So he is looking to locate a specific form referred to as:

Answer 29

Causes of Loss - Special Form.

Question 30

Mae is considering becoming a legal tenant at Playa Estates. In clarifying liability concerns with her legal advisor, she discovered that unless otherwise agreed, _______________ is/are obliged to ensure that the use of her premises does not cause injury to others.

Answer 30

the tenant

Question 31

Harry is hoping to finalize the purchase of a new building in his market to enhance his company’s portfolio. As a buyer, prior to closing, which of the following does not reflect the purpose of the pre-purchase due diligence process?

Answer 31

determining if the asking price is reasonable and fair

Question 32

Tri-Towers Complex has 23 owners. As a result, the recommendation to ownership for the most effective governance method focused on:

Answer 32

centralized management.

Question 33

Joe is a property manager at the Tariff Building in a major urban market. He is in the process of determining whether or not a real estate contract he is negotiating needs to be in writing. He recalls that a written contract is required for:

Answer 33

conveyance or sale of land or land interests.

Question 34

McHale Construction estimated the payroll for each type of employee it had for the policy period of its insurance. The classification of insurance premium McHale elected to use is referred to as a(n):

Answer 34

deposit premium.

Question 35

George knew this was a criminal prosecution because:

Answer 35

the defendant’s guilt had to be proven beyond a reasonable doubt.

Question 36

Being a bona fide purchaser of a property at fair market value means that:

Answer 36

you, as a buyer, have no reason to doubt that the seller has good title.

Question 37

Trustworthy Tires stopped paying rent to the landlord who had defaulted on the mortgage and instead began paying the lender according to the lease’s:

Answer 37

attornment clause.

Question 38

The state was awarded _______________ damages based on damages that were too speculative to calculate for contract breaches agreed to by the bridge construction company.

Answer 38

nominal

Question 39

When reviewing the legalities of discharging an employee in her role as a property manager, Sara discovered that the relationship between employers and employees allows either party to change or end the terms of employment. From a legal perspective, this relationship is referred to as:

Answer 39

at-will employment.

Question 40

Joe’s landlord refused to provide adequate heat or hot water during the cold winter. For health reasons, Joe abandoned the apartment and was not obligated to pay rent. This was an example of _______________ as it pertained to his lease.

Answer 40

constructive eviction

Question 41

Joseph, a property owner for the Hilton Building, found an antique clock that a former tenant had placed in the building basement two years earlier. He wants to keep it, as it is a very nice clock. Legally, what is Joseph’s obligation under common law practices?

Answer 41

view the clock as having been placed in his custody where it was found and return it to the original owner

Question 42

Veiled Properties selected an insurer that operates out of its home state of New York to be its provider. According to classifications of private insurers, this would define the insurer of Veiled Properties as a _______________ insurer.

Answer 42

domestic

Question 43

Your insurance agent has draft authority, meaning that she can:

Answer 43

make payments on small claims.

Question 44

Which of the following is the least likely to be a reliable tool for identifying loss exposure?

Answer 44

advice from close family members and friends

Question 45

The residents of Valley View Homes sued the nearby refinery for a recent exposure to toxic fumes based on an accidental release coming from its facility. The refinery turned to its _______________ insurance for protection.

Answer 45

pollution legal liability

Question 46

The fact that you exercise control over the house you live in means that you have:

Answer 46

possession of the property.

Question 47

Excelsior Insurance is working on a claim payment for property losses and can elect to choose all but one of the following options for payment. Select the one that they cannot use.

Answer 47

pay for new property that exceeds the previous property replacement value by up to 2 percent

Question 48

To cover damage or theft loss of construction equipment that is often moved from one location to another, Mr. O’Malley added _______________ insurance to his insurance policy.

Answer 48

equipment

Question 49

Property Management, Inc., wants to be sure it has insurance to cover itself against accidents involving hit-and-run drivers. Which of the following types of insurance meets this need?

Answer 49

uninsured/underinsured motorist insurance

Question 50

Which elements of a contract result in mutual assent, which is often referred to as “a meeting of the minds?”

Answer 50

offer and acceptance