- Which distinct legal characteristic of insurance contracts states that only the insurer’s promise to perform is legally enforceable?
- RST Company has production facilities in Salt Lake City and Cleveland. The probability that in any given year a fire will damage the production facility in Salt Lake City is 5 percent. The probability that in any given year a fire will damage the Cleveland production facility is 4 percent. What is the probability that BOTH production facilities will be damaged by fire in any given year?
- Mid-States Beef is a commercial feedlot business. Currently, the company has over 10,000 cattle in feedlots. Mid-States is concerned that the price of corn, the grain fed to the cattle, will increase significantly. The risk that the price of corn may increase and harm the profitability of Mid-States Beef’s operations is a(n)
- Reasons to adopt an enterprise risk management plan include all of the following EXCEPT
- Mark owns a bar. The bar has a back room where Mark has some slot machines. Mark lets some of his patrons play the machines, and Mark keeps any profits. This type of gambling is illegal where Mark lives. Mark wanted to purchase insurance in case his slot machines were confiscated by the police. Such an insurance contract would not be enforceable. Which requirement needed to form a valid insurance contract is missing?
- All of the following statements about subrogation are true EXCEPT
- Which of the following statements about a warranty in an insurance contract is (are) true?
I. It is part of the insurance contract.
II. Statements made by an insurance applicant are considered warranties rather than representations.
- Uncertainty pertaining to the organization’s goals and objectives and the organization’s strengths, weaknesses, opportunities, and threats is called
- Fundamental purposes of the principle of indemnity include which of the following?
I. To reduce physical hazards.
II. To prevent the insured from profiting from insurance.
- The deductible used for automobile collision losses is an example of a(n)