CAFM Risk Management 5

Question 1

A 'captive insurance company' owned by a large fleet organization is BEST described as:

Accepted Answer

A wholly-owned subsidiary that insures the parent's risks and retains premiums within the corporate structure

Answer

A captive insurer is a subsidiary created to finance the parent organization's retained risks, keeping underwriting profit and investment income in-house.

Question 2

Which action BEST demonstrates a fleet manager's proactive approach to reducing workers' compensation claims related to vehicle operations?

Accepted Answer

Implementing ergonomic vehicle entry/exit protocols and load-handling training

Answer

Ergonomic protocols and training address the physical root causes of occupational injuries in fleet operations such as slips, strains, and improper lifting.

Question 3

A fleet manager is asked to quantify the total cost of a fleet accident. Which costs are typically EXCLUDED from insurance claims but should be included in a total-cost analysis?

Accepted Answer

Administrative time, lost productivity, rental costs, and reputational damage

Answer

Uninsured indirect costs such as management time, lost productivity, and reputational harm often exceed the direct insured losses but are invisible without a total-cost analysis.

Question 4

Which fleet risk management practice is MOST effective at preventing accidents caused by driver fatigue?

Accepted Answer

Enforcing hours-of-service limits and scheduling adequate rest periods between shifts

Answer

Hours-of-service rules and rest scheduling directly address the root cause of fatigue — insufficient sleep and excessive driving time.

Question 5

What is the key difference between 'risk avoidance' and 'risk reduction' as fleet risk management strategies?

Accepted Answer

Risk avoidance eliminates the exposure entirely while risk reduction lowers the frequency or severity of an existing exposure

Answer

Avoidance removes the activity (e.g., discontinuing a hazardous delivery route) while reduction modifies it (e.g., requiring speed limiters on that route).

CAFM - Certified Automotive Fleet Manager Practice Test

CAFM - Certified Automotive Fleet Manager Practice Test

CAFM Risk Management 5