TECH 436
Chapter 3
1. Identify and briefly explain the four elements of a loss exposure.
2. Loss to property may involve tangible property, intangible property, or both.
(a) Give four examples of tangible property, two involving real property, and two
involving personal property.
(b) Give four examples of intangible property, briefly indicating how the property
involved in each example may suffer loss.
(c) Give one illustration of when damage to tangible property also reduces the value of
intangible property.
3. Give an example in which an undamaged part of a pair or set of related items of property
loses value because another part of that property has been damaged.
4. Briefly describe each of the following property loss potentials relating to building codes.
(a) demolition, (b) contingent liability for building codes, (c) increased cost of construction
5. Describe the way(s), if any, that "pair and set" losses are similar to "loss of going concern
value" losses.
6. If Acme Enterprises is a tenant under a $2,000 per month, 240-month lease and 20 months
into the lease sustains a loss that requires it to move to a location where the rent is $3,000 per
month, calculate the undiscounted leasehold interest loss.
7. Briefly describe the net income loss that could be anticipated in each of the following
situations:
(a) interruption of an organization's activities.
(b) loss of goods ready for sale
(c) damage to accounts receivable
(d) damage to property leased to others
8. Describe two sets of circumstances in which an organization can suffer a net income loss
from interruption of its operations even though neither that organization nor any of its suppliers
or customers suffers any loss to tangible or intangible property.
9. Describe the net income loss exposure facing an organization arising out of damage to each of
the following:
(a) "contributing" (supplier) property
(b) "recipient" (customer) property
10. Distinguish between civil liabilities arising from contract law and tort law.
11. Distinguish between common and statutory law.
12. Identify two types of costs imposed on an organization facing a liability claim.
13. Identify three perils that may cause personnel losses.
