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Free L5M2 Exam Braindumps (page: 9)

Page 8 of 31
PDF with 120 Questions

Which of the following insurances would provide cover in the eventuality that your supplier's place of business flooded and this affected your deliveries?

  1. business interruption insurance
  2. contingent business interruption insurance
  3. public liability insurance
  4. property insurance

Answer(s): B

Explanation:

This is 'contingent business interruption' insurance. This protects you if anything were to happen to your suppliers' premises. Business Interruption Insurance would cover you if something were to happen to your premises. See p.99



Which of the following legal principles means that a person can only claim the value of a loss once, regardless of if they have multiple insurance policies?

  1. utmost good faith
  2. insurable interest
  3. contribution
  4. subrogation

Answer(s): C

Explanation:

This is contribution. An example of this is if you have two insurance policies and are going on a business trip that is cancelled last minute. You can claim on the insurance the value of the trip- but only once. So you can either use one policy and not the other, or you can claim half the value of the trip on both policies. This stops people taking out multiple policies and then claiming on them all to make a profit. Legal Principles of Insurance is a known exam topic - this is from p.100-101 of the study guide



In an emergency situation, put the following phases into chronological order as to when they would be activated 1) disaster recover plan 2) incident response 3) business continuity plan

  1. 1, 2, 3
  2. 1, 3, 2
  3. 2, 1, 3
  4. 3, 1, 2

Answer(s): C

Explanation:

The correct order is 2, 1, 3 - this is from p.108 of the study guide: 'The Components of a Business Continuity and Disaster Recovery Plan'.



Which of the following is not an internal risk for a business who imports raw materials from abroad?

  1. technology malfunction
  2. procurement fraud
  3. loss of customer data
  4. changes to import levies

Answer(s): D

Explanation:

changes to import levies is an external risk. Not internal. See p.118-119 for more information on internal risks - this is a popular exam topic. Internal risks are stuff that happens inside a company, external risks are risks from the external environment (whether this is political, economical, weather etc)






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