Legal Liability and Risk Management Quiz

Legal liability encompasses various types, but financial liability is not considered one of them.

Risk management aims to mitigate and reduce the adverse effects of foreseeable risks on business operations.

While risk appreciation is important, it is not a formal risk management technique used to mitigate or manage risks.

A waiver is used to secure voluntary agreement from participants in potentially hazardous activities, absolving the organizer of liability for any resulting harm.

An indemnification clause shifts the financial burden of certain risks from one party to another, limiting potential liability.

Respondeat superior holds employers accountable for the actions of their employees performed within the scope of their job duties.

Product liability laws aim to ensure that manufacturers bear responsibility for any defects or hazards in their products.

Fidelity bond insurance protects businesses from losses resulting from dishonest or fraudulent acts committed by employees.

The statute of limitations establishes the timeframe within which legal action must be initiated, beyond which claims may be barred.

Mediation focuses on negotiation and communication facilitated by a neutral mediator, whereas arbitration involves a third-party arbitrator rendering a binding decision after hearing arguments from both parties.

Comparative negligence allows plaintiffs to recover damages proportionate to the defendant's fault, even if the plaintiff shares some responsibility.

Directors and officers (D&O) liability insurance typically covers claims related to management decisions and actions, but not product defects.

The 'prudent person' rule mandates individuals to exercise the level of care, diligence, and skill that a reasonable person would under similar circumstances to avoid negligence.

Libel involves defamatory statements communicated through writing or other permanent forms, whereas slander involves spoken defamatory remarks.

The SEC oversees and regulates securities markets, ensuring fair and transparent practices to protect investors and maintain the integrity of the financial system.