CAFM Risk Management 4 — Questions and Answers
Question 1: When developing a fleet risk management program, which step should occur BEFORE purchasing insurance?
- Selecting an insurance broker
- Identifying, analyzing, and evaluating all fleet exposures (Correct answer)
- Negotiating deductible levels with underwriters
- Reviewing prior-year premium invoices
Correct answer: Identifying, analyzing, and evaluating all fleet exposures
Risk identification and analysis must precede any risk financing decision so that coverage is properly structured to match actual exposures.
Question 2: A fleet vehicle is stolen and later recovered with significant damage. Which coverage would pay for repairs to the organization's vehicle?
- Liability coverage
- Collision coverage
- Comprehensive coverage (Correct answer)
- Uninsured motorist property damage
Correct answer: Comprehensive coverage
Comprehensive coverage pays for non-collision losses including theft, vandalism, fire, and weather damage to the insured vehicle.
Question 3: Which metric is MOST useful for benchmarking fleet safety performance against industry peers?
- Total fuel cost per vehicle
- Accident rate per million miles driven (Correct answer)
- Average vehicle age in the fleet
- Preventive maintenance compliance percentage
Correct answer: Accident rate per million miles driven
Accidents per million miles normalizes for fleet size and utilization, enabling valid comparisons across organizations of different sizes.
Question 4: What is the primary purpose of an indemnification clause in a fleet vendor contract?
- To specify payment terms for fleet services
- To allocate responsibility for losses and legal costs between the fleet and the vendor (Correct answer)
- To define the vehicle maintenance schedule
- To establish fuel reimbursement rates
Correct answer: To allocate responsibility for losses and legal costs between the fleet and the vendor
Indemnification clauses contractually assign financial responsibility for claims, losses, and legal expenses to the appropriate party.
Question 5: A fleet manager notices that rear-end collisions represent 40% of all accidents in the fleet. The risk control tactic MOST likely to reduce this specific type of loss is:
- Implementing a no-personal-use vehicle policy
- Mandating following-distance training and monitoring via telematics (Correct answer)
- Increasing comprehensive insurance deductibles
- Restricting vehicle access to drivers over age 25
Correct answer: Mandating following-distance training and monitoring via telematics
Rear-end collisions are primarily caused by following too closely or inattention, both directly addressed by following-distance training and telematics monitoring.
Question 6: Which document should a fleet manager require from every contractor who operates company vehicles on behalf of the organization?
- Personal auto insurance declarations page
- Certificate of liability insurance naming the company as an additional insured (Correct answer)
- Vehicle registration copy
- DMV driving record printout
Correct answer: Certificate of liability insurance naming the company as an additional insured
A certificate of insurance with the company named as an additional insured confirms the contractor has coverage and that the company is protected under that policy.
Question 7: Under the Americans with Disabilities Act (ADA), what obligation does a fleet manager have when a driver requests an accommodation due to a medical condition?
- No obligation if the driver cannot meet all essential job functions
- Engage in an interactive process to determine whether a reasonable accommodation exists that allows the driver to safely perform essential functions (Correct answer)
- Immediately reassign the driver to administrative duties
- Require the driver to obtain private disability insurance before returning to duty
Correct answer: Engage in an interactive process to determine whether a reasonable accommodation exists that allows the driver to safely perform essential functions
The ADA requires employers to engage in a good-faith interactive process with the employee to explore reasonable accommodations before making any adverse employment decision.
CAFM Risk Management 4
When developing a fleet risk management program, which step should occur BEFORE purchasing insurance?