ICDC College-BMA-256_Unit 03
Unlock all answers in this set
Unlock answersquestion
Risk Loss Exposure
answer
A category of factors that can cause a business to lose money and its financial stability. The losses are caused by an array of factors, including property exposures, liability exposures, and business income exposures.
question
Active Retention
answer
The practice of protecting against a loss by the designation of specific funds to pay for the expected amount of the loss.
question
Passive Retention
answer
The practice of protecting against a loss in which no money is set aside to cover expected losses.
question
Property Loss Exposure
answer
Any condition or situation that presents the possibility that a property loss will happen.
question
Real Property
answer
Immobile fixed assets such as land, buildings, and other structures attached to the land or embedded in it.
question
Personal Property
answer
Consists of all tangible or intangible property that is not real property, such as furniture, fixtures, fittings, plant and machinery, money, copyright, trademarks, and patents.
question
Net Income
answer
A part of personal property, this refers to a person's or business's income or revenue minus expenses during a given period.
question
Direct Loss
answer
Occurs when there is damage to property.
question
Indirect Loss
answer
Occurs when a direct loss causes expenses to increase or revenues to decline.
question
Liability Loss Exposure
answer
Presents the possibility of a claim alleging legal responsibility of a person or business for injury or damage suffered by another party.
question
Property Owner-Tenant Liability
answer
A sub-category of liability loss exposure, the tenant or owner owes a certain degree of care to those who enter the premises. There are three types of people who enter into this type of liability agreement: invitees, licensees, trespassers.
question
Invitees
answer
These are individuals who are invited on the premises for their own benefit as well as for that of the landlord or tenant.
question
Licensees
answer
These are individuals who are on the premises for legitimate purpose with the permission of the occupier. These people include meter readers, water delivery drivers, and police officers.
question
Trespassers
answer
These are all the other people other than invitees and licensees who enter on the premises.
