If on Paying an Insurance Claim the Insurer Assumes All

question 16

Multiple Choice

If on paying an insurance claim the insurer assumes all of the insured's rights in relation to the subject of matter of the insurance:

• A)The insurer is exercising its right of subrogation.
• B)The insurer is likely to be related to the insured or is the insured's employee.
• C)The insurer cannot sue a third party who caused the loss.
• D)The insured person's admission of liability will not prejudice the insured's claim.

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Definitions:

Direct Labor

The labor costs associated with employees who are directly involved in the manufacturing of products or provision of services.

Fixed Overhead

Refers to the regular, recurring costs associated with running a business that are not affected by production volume, including rent and insurance.

Property, Plant, and Equipment

These are long-term assets a company uses in the production of its goods and services, such as buildings, machinery, and vehicles.

Fixed Manufacturing Overhead

The set of production costs that do not change with the level of production, including salaries, rent, and insurance of the factory.