Client Advisory & Consultation Flashcards
7 cards from real RIMS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Client Advisory & Consultation flashcards as text
A client is considering a Risk Retention Group (RRG) to address difficult-to-place liability coverage. What is a defining characteristic of an RRG under U.S. law?
Answer: An RRG is a member-owned liability insurer chartered under the Liability Risk Retention Act that can operate in all states once licensed in one
Under the federal Liability Risk Retention Act of 1986, an RRG is a member-owned insurer licensed in one state that may provide liability coverage to its members in all U.S. states without separate state licensing.
When advising a client on supply chain risk, which approach provides both financial protection and operational resilience guidance?
Answer: Combining contingent business interruption (CBI) insurance with supplier diversification and business continuity planning
Effective supply chain risk advisory integrates CBI insurance to fund financial losses with operational strategies (supplier diversification, BCP) to reduce the likelihood and duration of disruptions.
A client's legal counsel and risk advisor disagree on whether a contract clause creates an insurable additional insured obligation. What is the BEST next step for the risk advisor?
Answer: Escalate to the underwriter for a coverage opinion and coordinate with legal counsel to resolve the ambiguity before binding coverage
When contractual and coverage interpretations conflict, the risk advisor should engage the underwriter for a formal coverage position and work collaboratively with legal counsel to align the contract language with the insurance program.
A client operating in a high-crime urban area wants to address employee dishonesty risk. Which coverage is specifically designed to protect against losses caused by fraudulent acts of employees?
Answer: Commercial Crime / Fidelity Bond coverage
Commercial crime/fidelity coverage (including employee dishonesty bonds) is specifically designed to indemnify an employer for direct financial losses caused by dishonest or fraudulent acts of employees.
During a risk advisory engagement, a client requests that the advisor keep certain sensitive financial data confidential from their own board of directors. How should the advisor respond?
Answer: Decline to withhold material risk information from governance bodies, as this conflicts with professional ethics and fiduciary responsibility
A risk advisor must maintain professional integrity and cannot suppress material risk information from oversight bodies; doing so would breach ethical standards and potentially enable harm to the organization.
A client wants to benchmark their insurance program against industry peers. Which data source is MOST useful for obtaining industry-specific loss cost and rate benchmarking information?
Answer: Industry benchmarking databases such as RIMS Benchmark Survey, Advisen, or insurance market analytics platforms
Professional benchmarking databases (RIMS Benchmark Survey, Advisen) provide industry-segmented premium rates, coverage structures, and loss cost data that enable meaningful peer comparison for a client's risk program.
A client is concerned about reputational risk following a product recall. Which advisory action MOST directly addresses both the financial and reputational dimensions of this exposure?
Answer: Implementing a product recall insurance program combined with a pre-planned crisis communications protocol
Product recall insurance funds the direct recall costs while a pre-planned crisis communications protocol manages the reputational damage — together they address both the financial and brand dimensions of a recall event.