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 'captive insurance company' owned by a large fleet organization is BEST described as:
Answer: A wholly-owned subsidiary that insures the parent's risks and retains premiums within the corporate structure
A captive insurer is a subsidiary created to finance the parent organization's retained risks, keeping underwriting profit and investment income in-house.
Which action BEST demonstrates a fleet manager's proactive approach to reducing workers' compensation claims related to vehicle operations?
Answer: Implementing ergonomic vehicle entry/exit protocols and load-handling training
Ergonomic protocols and training address the physical root causes of occupational injuries in fleet operations such as slips, strains, and improper lifting.
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?
Answer: Administrative time, lost productivity, rental costs, and reputational damage
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.
Which fleet risk management practice is MOST effective at preventing accidents caused by driver fatigue?
Answer: Enforcing hours-of-service limits and scheduling adequate rest periods between shifts
Hours-of-service rules and rest scheduling directly address the root cause of fatigue — insufficient sleep and excessive driving time.
What is the key difference between 'risk avoidance' and 'risk reduction' as fleet risk management strategies?
Answer: Risk avoidance eliminates the exposure entirely while risk reduction lowers the frequency or severity of an existing exposure
Avoidance removes the activity (e.g., discontinuing a hazardous delivery route) while reduction modifies it (e.g., requiring speed limiters on that route).
When a fleet vehicle is involved in an accident with a third party who is uninsured, which coverage protects the fleet organization's employees for their bodily injuries?
Answer: Uninsured/underinsured motorist (UM/UIM) coverage
UM/UIM coverage pays for injuries sustained by the insured's occupants when the at-fault driver has no insurance or insufficient insurance.
A fleet manager implements a 'graduated return-to-work' program after driver injuries. From a risk management perspective, this program PRIMARILY achieves:
Answer: Lower workers' compensation costs by reducing claim duration and preventing claim escalation
Modified-duty return-to-work programs reduce the total cost of workers' compensation claims by shortening disability duration and maintaining the employee's connection to the workplace.