Question

1. Among the properties owned by Hagen Company are five buildings constructed from cement blocks. Hagen did not include these buildings for coverage under its property insurance policy because losses to these structures occur so infrequently. When losses do occur, Hagen Company simply pays for the losses through cash flow or current assets. Hagen’s method of dealing with losses to these buildings is called

Select one:

A. Self insurance.

B. Group self insurance.

C. Third-party administered plan.

D. Informal retention.

2. An exculpatory clause is

Select one:

A. A contractual provision that relieves one party from liability resulting from a negligent or wrongful act.

B. The intentional relinquishment of a known right.

C. The surety’s right to seek reimbursement from the principal for the surety’s payments.

D. The substitution of one party for another.

3. A retrospective rating plan

Select one:

A. Is a form of self-insurance.

B. Is insurance that is subject to a rating formula.

C. Is considered to be guaranteed-cost insurance.

D. Bases pricing on past loss experience.

4. Construction contracts typically hold the

Select one:

A. Landowner harmless for certain construction-related claims.

B. Eventual tenant of the premises harmless for construction defects.

C. Contractor harmless for any premises liability claims.

D. Contractor harmless for any negligence.

Please help answer all questions for a like. Thank you.

Answer 1

1.

The answer is option D. Informal Retention

because, they are paying losses out of cashflow or current assets as normal business expenses. this kind of arrangement is called as informal retention.

2.

The answer is Option A.

an exulpatory clause is a contract provision that relieves one party of liablityif damages are occured during the exicution of the contract.

3.

The answer is option c

a retrospecrive rating plan Is considered to be guaranteed-cost insurance becasue, it adjusts the premium, subject to a certain minimum and maximum, to reflect the current loss experience of the insured.

4.

The answer is option C

Construction contracts typically hold the Contractor harmless for any premises liability claims.

because, In some cases, agreements will protect a contractor from claims brought by corporations or companies not forming part of the agreement.