Risk Management Flashcards
7 cards from real CAFM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Risk Management flashcards as text
A telematics system flags a driver with a hard-braking score in the bottom 10% of the fleet. From a risk management perspective, the FIRST step should be:
Answer: Conduct a coaching session using the telematics data as evidence
Coaching with objective data addresses the root behavior and documents the intervention, forming a defensible risk-management record.
Which risk transfer mechanism allows a fleet to share large, unpredictable losses with other organizations in the same industry?
Answer: Risk retention group
A risk retention group (RRG) is a member-owned liability insurer that allows businesses in the same industry to pool and share liability risks.
What is the purpose of an 'experience modification rate' (EMR or X-Mod) in fleet risk management?
Answer: It adjusts workers' compensation premiums based on actual loss history versus expected losses
The EMR compares a company's actual claims history to the industry average; an EMR above 1.0 increases premiums and signals higher-than-average risk.
A fleet manager is evaluating whether to implement a dash cam program. Which risk management benefit is MOST directly achieved?
Answer: Faster and more accurate claims resolution with visual evidence
Dash cam footage provides objective evidence that speeds up claims processing and can exonerate innocent drivers, reducing fraudulent claims.
Under a fleet safety program, what does 'near-miss reporting' primarily help the organization accomplish?
Answer: Identify hazards and correct conditions before they result in an actual loss
Near-miss reporting is a proactive risk tool that surfaces hazardous conditions or behaviors before they cause injury or property damage.
Which factor most directly causes an organization's auto liability insurance premium to increase at renewal?
Answer: An adverse loss ratio from the prior policy period
An adverse loss ratio (claims paid versus premiums collected) signals higher risk to the insurer and typically drives premium increases at renewal.
A driver is involved in a preventable accident while making a personal stop during a business trip. The fleet manager's liability exposure is BEST described as:
Answer: Potentially full liability under the 'coming and going' rule if the detour was minor
Under 'respondeat superior' and 'frolic and detour' doctrines, minor personal detours may still expose the employer to vicarious liability if they are incidental to the business trip.