RM Chapter 11

Software applications running automated tasks (scripts) used to perform repetitive tasks.

Bot

Homeowners insurance policy endorsement that automatically increases the value of coverage on a home to keep up with inflation

Inflation guard endorsement

Give some examples of economic risks

fiscal crisis banking failures asset bubbles severe inflation/deflation trade barriers

Access to the company computer network, and the knowledge of how to use it, gives this group the potential to cause the most damage to a business. Identify the vandals in discussion.

Insiders

Conflict risks related to --- --- ----

man-mad conflict such as war, terrorism, and weapons of mass destruction

Straight deductible

one that requires payment for all losses less than a specified dollar amount

Global risks can affect a business whether they ------- or not. Global risks include all the ------- which exist outside the influence of any single country's ------ Global risks are all the------- ---- ---- which could damage a company ------ Global risks are risks that------and have the potential to affect -----

operate internationally political, economic, cultural, technological, and environmental government external, uncontrollable risks financially cross borders everyone

Real property

permanent structures (realty) that if removed would alter the functioning of the property

Personal property

physical property that is mobile (not permanent attached to something else)

Geopolitical risks include ---- and ----- risks as well as ----, ---- and -----

political economic war terrorists attacks weapons of mass destruction

Replacement cost new

indemnification for a property loss with no deduction for depreciation

A franchise deductible is appropriate when the insured is unable to

influence or control the amount of loss

Malicious software intended to damage a computer or network.

malware

In January Jennifer purchased a $400,000 policy for a building with an actual cash value of $500,000. The policy has an 80 percent coinsurance clause, which requires at least 80 percent of the value to be covered in order to receive the actual loss. By the time the building suffers a $50,000 loss in November, its actual cash value has increased to $600,000.

41, 667

Under the coinsurance clause, a property is considered fully covered if coverage is at least ------ of the value of the property.

80%

Which of the following statements about global political risk management is incorrect? A. Political risk coverage is available against a variety of perils, including expropriation of property by a government and political violence B. Political risk policies are not standardized C. Insurance is the only way firms can protect themselves against loss from global political risks D. Some types of political risk insurance are available through international government agencies. E. Private insurers in the political risk insurance market are concentrated mostly in the UK, USA and Bermuda

C

Coinsurance clause

Clause that requires one to carry an amount of insurnace equal to a specified percentage of the value of property in order to be paid in the full amount of loss incurred that stipulates a proportional payment of loss for failure to carry sufficient insurance

The deployment of nuclear, chemical, biological and radiological technologies and materials, creating international crises and potential for significant destruction is an example of:

Conflict Risk

Physical property

Consists of real or personal property

Admitted insurance

Contracts written by companies authorized to write insurance in the country where a risk exposure is located

Vandals who want to break in to a company's security network and steal proprietary information for personal gain.

Crackers

any risk of loss related to physical or virtual failure of the use of a technology or technological system

Cyber risk

In risk management, the distinction between real and personal property is relevant because:

Dissimilar properties are exposed to perils with different likelihoods

Allows the sender of an email to scramble the contents of the document.

Encryption

Because security may be breached by people within the company, Internet access is generally available only to authorized internal and external users via the use of passwords. One of the best ways to protect emails is through __________

Encryption

According to the World Economic Forum's Global Risk Report 2020 what are the most frequent and severe types of risks facing the world?

Extreme weather and climate action failure

Device that protects a network from intrusion by preventing access unless certain criteria are met.

Firewall

Virtual vandals who try to poke holes in a company's security network.

Hackers

Which of the following words best describes global risks.

Interconnected

These types of risks are similar to political risks, in that they often result from political changes, but these risks also exist independently.

Legal risk

Franchise deductible

One that pays the entire amount in full once the amount of loss equals the deductible

Disappearing deductible

One whose amount decreases as the amount of loss decreases

Programs that covertly record online activities.

Spyware

The generally accepted method of insuring against property loss due to fire until being replaced by homeowners policies and commercial insurance options

Standard Fire policy

What are the three types of deductibles?

Straight Franchise Disappearing

When a business expands abroad, one of the first actions is __________

Study local culture and markets learn their way of doing business

Political risk

The risk that political evens in another country could disrupt the earning or profit making ability of an enterprise

Global economic risk

The risk that economic events in one country or region could disrupt the economy in another country or even worldwide

Geopolitical risk

The risk that events or actions in one country (or region) could influence political or social policy or events in another country or region

If an insurer has offered coverage of property on a replacement cost new (RCN) basis, and the property is lost or destroyed,

The value of the property is estimated as if it were bought new or rebuilt on the day of the loss

Malicious, non-self replicating software, disguised to look legitimate in order to trick users into downloading and running it on their systems.

Trojan

Network that connects satellite offices with a central location and allows remote users to gain secure access to a corporate network

Virtual private network

Unauthorized changing of a website's registration or otherwise taking over a domain name or website to deceive users.

Website hijacking

Program or code that replicates copies of itself to cause damage in a computer or network and spreads by exploiting vulnerabilities in the systems they target.

Worm

What are the benefits of nonadmitted coverage?

Written in english use U.S. dollars for premiums and claims avoiding exchange rate risk utilize terms and conditions familiar to US risk managers provides flexibility in underwriting.

Infected computers in a botnet.

Zombies

What is the coinsurance equation?

amount of insurance carried/ amount you agreed to carry * loss

A network of bot-compromised computers used to carry out malicious cyber attacks.

botnet

Nonadmitted coverages

contracts issued by a company not authorized to write insurance in the country where risk exposure is located

Seeking compensation for the use of a registered domain name from the rightful trademark holder.

cybersquatting

When an individual or a business reserves a domain name that uses the trademark of a competitor.

domain name hijacking

A host nation takes away property of a private business firm according to the host country's laws, this inherent power of the state is known as:

expropriation

For each of the following events which might occur in a foreign country, identify the type(s) of global risk it represents Military coup Democratic election Terrorism Severe inflation

political & conflict Political Political & Conflict Economic

the hazards and perils of cyber risk exposure to an individual or business as a first party

property cyber risks

Malicious software that holds data on a computer or network hostage, making it inaccessible unless a ransom is paid.

ransomware

Deductibles help maintain ---- ----- because they eliminate ---- ---- of the low-value common losses A deductible requires the insured to --- --- --- --- before the insurer is obligated to make a payment

reasonable premiums administrative expenses bear some portion of the loss

The determination of payments for property coverage relies on....

valuation clause deductibles coinsurance

A program or code that replicates itself inside a computer or network with the intent to damage, destroy, or hijack an operating system or control program.

virus