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Risk Management - CMCA Test Preparation
- TRUE: TRUE or FALSE Risk management is the process of making and carrying out decisions that will minimize the adverse effects of accidental losses upon the community association.
- c. income exposure to loss: What type of Exposure to Loss for a community association is characterized by net losses that may involve a reduction in income or an increase in operating expenses or both? a. property exposure to loss b.liability exposure to loss c. income exposure to loss
d. personnel exposure to loss
- d. personnel exposure to loss: What type of Exposure to Loss for a community association is characterized by claims by employees regarding discrimination in hiring or firing, harassment, or other allegation. a. property exposure to loss b.liability exposure to loss c. income exposure to loss d. personnel exposure to loss
- b. liability exposure to loss: What type of Exposure to Loss for a community association is characterized by damage to non-association property or to a person, arising when a person or entity threatens or
a. property exposure to loss b.liability exposure to loss c. income exposure to loss d. personnel exposure to loss
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6. TRUE Surveys and questionnaires Financial Reports - Asset entries detail property exposures and liability en- tries explain continuing obligations. Records, files and documents Flowcharts detail association paper flow and critical tasks. Personal Inspections Hire experts, including Reserve Specialists, insurance risk managers and qualified general contractors: TRUE OR FALSE: The following resources can help identify exposures to loss: Surveys and questionnaires
Preparation dollar loss when a financially adverse event occurs. a. Severity b.Frequency
**9. 1. c. Loss reduction
- b. Loss prevention
- d. Segregation of exposures
- e. Contractual transfer
- a. Exposure Avoidance:** Risk Control is a one way to treat the primary exposures to loss. Match the terms:
Preparation 1.Minimize the severity of the loss if something does happen. 2.Take steps to reduce the likelihood of a potential loss. 3.Separating and duplicating activities and personnel performing them. 4.Moving the legal and fiscal responsibility to another party. 5.Eliminating the chance of loss by stopping or never starting an activity. a. Exposure Avoidance b.Loss prevention c. Loss reduction d. Segregation of exposures e. Contractual transfer
- 1. (b) Income
Preparation c. Personnel d. Liability
- TRUE: TRUE OR FALSE Liability insurance helps with situations in which a civil legal claim is brought against the association because of a legal wrong it is alleged to have directly committed or for which it is supposedly responsible. **12. 1. (a) Commercial General Liability (CGL)
- (c) Commercial Umbrella
- (b) Directors & Officers insurance (D&O):** Match the three types of Liability Insurance Coverages and Endorsements: 1.Covers property damage, bodily injury, medical payments, personal
Preparation injury, adver- tising injury. Hired and non-owned automobile liability covers claims arising out of the use of automobiles that are not owned by the community association, but that
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13. FALSE Income insurance protects against loss of income as well as from an IN- CREASE in expenses.: TRUE OR FALSE Income insurance protects against loss of income as well as from a loss in expenses. **14. 1. (d.) Extra Expense Insurance
- (a.) Fidelity Insurance
- (b.) Business Income Insurance
- (c.) Assessments Receivable Insurance:** What are the four types of Income Insurance Coverages and Endorsements?
Preparation 1.Applies when a covered loss either increases operating expenses or diminishes the income produced by normal operations. 2.Protects against employee dishonesty which may lead to the theft of money, securities, or property. 3.Covers the loss of certain types of business income. 4.Applies to situations in which a covered loss happens to the property and the community association is unable to collect assessments from the owner. a. Fidelity Insurance b.Business Income Insurance c. Assessments Receivable Insurance d. Extra Expense Insurance
Preparation separate and distinct from claims for workers' comp benefits. They go hand-in-had.: What 2 types of insurance coverage (personnel insurance coverages and endorsements) pays for the medical bills, lost wages, and certain other benefits due to injured employees? a.Vehicle Coverage b.Workers' Compensation Insurance c. Employers' Liability Insurance d. Master Policy
17. e. Admit negligence for liability claims.
Preparation NEVER admit negligence for liability claims.: Which of the following is NOT a rule for insurance claims? a. Always meet specific requirements for filing claims. b.Notify the insurer of claims with a potentially adverse financial impact. c. Present proof of loss. d. Minimize further loss. e. Admit negligence for liability claims. 18. 1. HO-
**2. HO-1, HO-2, HO-3, and HO-
- HO-4:** Match the different type of Homeowner (HO) policies. Same may be used more than once.
Preparation 2.Policies for owner-occupied single-family homes. 3.Tenant's policy. a. HO- b.HO- c. HO- d. HO- e. HO- f.HO-
19. a. a community association rule prohibiting the use of alcohol in the clubhouse - Exposure Avoidance is eliminating the chance of loss by stopping or never starting an activity. In this case it is not allowing alcohol to be used in the clubhouse.
Preparation INCORRECT: b. conducting weekly fire safety inspections where flammables are stored - Is an example of Loss Prevention, taking steps to reduce the likelihood of a potential loss. c. contracting for landscape services - Is an example of Contractual Transfer d. backing up all computer files and storing the backup files in a separate place
- Is an example of Loss Prevention.: Which of the following
